Public Private Partnership Act, 2014
Download FeedBackDepartment: | Planning and Development Department | |||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Main Category: | Acts | |||||||||||||||||||||||||||||||||
Specific Category Name: | Public Private | |||||||||||||||||||||||||||||||||
Year | 2014 | |||||||||||||||||||||||||||||||||
Promulgation Date: | 07-04-2014 | |||||||||||||||||||||||||||||||||
Details: | THE
KHYBER PAKHTUNKHWA PUBLIC
PRIVATE PARTNERSHIP ACT, 2014. (KHYBER
PAKHTUNKHWA ACT NO. XX OF 2014) CONTENTS PREAMBLE SECTIONS CHAPTER I PRELIMINARY 1. Short title, extent and commencement. 2. Definition. CHAPTER-II INSTITUTIONAL
ARRANGEMENTS 3. Establishment of the Public Private
Partnership Committee. 4. Functions of the Committee. 5. Public Private Partnerships Unit. 6. Functions of the PPP Unit. 7. Establishment of a PPP Node. CHAPTER III PRIVATE
PARTICIPATION IN PUBLIC INFRASTRUCTURE 8. Private sector participation. 9. Applicability. 10. Basis for Public Private Partnership. 11. Project identification and preparation. 12. Project prioritization and approval. 13. Approval of Government support. 14. Consideration by the Committee. CHAPTER - IV SELECTION OF THE
CONCESSIONAIRE 15. Rules governing the selection
proceedings. 16. Purpose and procedure of pre-selection. 17. Pre-selection criteria. 18. Participation of consortia. 19. Decision on pre-selection. 20. Single-stage and two-stage procedures for
requesting proposals. 21. Content of the request for proposals. 22. Bid securities. 23. Clarifications and modifications. 24. Evaluation criteria. 25. Comparison and evaluation of proposals. 26. Further demonstration of fulfillment of
qualification criteria. 27. Final negotiations. CHAPTER - V NEGOTIATION OF
CONCESSION CONTRACTS WITHOUT
COMPETITIVE PROCEDURES 28. Circumstances authorizing award without
competitive procedures. 29. Procedures for negotiation of a
Concession Contract. CHAPTER - VI UNSOLICITED
PROPOSALS 30. Admissibility of unsolicited proposals. 31. Procedures for determining
the admissibility of unsolicited proposals. 32. Unsolicited proposals that
do not involve intellectual property, trade secrets or other exclusive rights. 33. Unsolicited proposals
involving intellectual property, trade secrets or other exclusive rights. CHAPTER - VII MISCELLANEOUS
PROVISIONS 34. Confidentiality. 35. Notice of contract award. 36. Record of selection and
award proceedings. 37. Review procedures. CHAPTER - VIII CONTENTS AND
IMPLEMENTATION OF THE
CONCESSION CONTRACT 38. Contents and
implementation of the Concession Contract. 39. Governing laws. 40. Organization of the
Concessionaire. 41. Ownership of assets. 42. Acquisition of rights
related to the Project site. 43. Easements. 44. Financial arrangements. 45. Security interests. 46. Assignment of the
Concession Contract. 47. Transfer of controlling
interest in Concessionaire. 48. Operation of
infrastructure. 49. Compensation for specific
changes in legislation. 50. Revision of the Concession
Contract. 51. Takeover of an
infrastructure Project by the Contracting Authority. 52. Substitution of the
Concessionaire. CHAPTER - IX DURATION,
EXTENSION AND TERMINATION OF THE CONCESSION
CONTRACT 53. Duration and extension of
the Concession Contract. 54. Termination of the
Concession Contract by the Contracting Authority. 55. Termination of the
Concession Contract by the Concessionaire. 56. Termination of the
Concession Contract by either party. 57. Compensation upon
termination of the Concession Contract. 58. Wind-up and transfer
measures. CHAPTER - X SETTLEMENT OF
DISPUTES 59. Disputes between the
Contracting Authority and the Concessionaire. 60. Disputes involving
customers or users of the infrastructure facility. 61. Other disputes. CHAPTER - XI INCIDENTAL
PROVISION 62. Viability Gap Fund. 63. User fee. 64. Reports and audits. 65. Public disclosure. 66. Prescribing and enforcing
standards. 67. Indemnity by the
Concessionaire. 68. Recovery of costs, dues
and fees. 69. Protection of action taken
in good faith. 70. Overriding effect. 71. Power to make rules. 72. Power to frame regulations
and guidelines. SCHEDULE
THE
KHYBER PAKHTUNKHWA PUBLIC
PRIVATE PARTNERSHIP ACT, 2014. (KHYBER
PAKHTUNKHWA ACT NO. XX OF 2014) [First published
after having received the assent of the Governor of the Khyber Pakhtunkhwa in the Gazette of Khyber Pakhtunkhwa (Extraordinary),dated
the 7th April,2014]. AN ACT to provide for the
participation of the private sector in the financing, construction,
development, operation, or maintenance of infrastructure or development
Projects or other related services of the Government through Concession
Contracts in Public Private Partnership mode and the establishment of
institutions to regulate, monitor and supervise the implementation of Public
Private Partnership contracts. WHEREAS it
is expedient to establish a favorable legislative framework to promote and
facilitate the implementation of privately financed infrastructure Projects in
form of Public Private Partnership by enhancing transparency, fairness and
long-term sustainability and removing undesirable restrictions on private
sector participation in shape of partnership with public sector in
infrastructure development and operation; AND WHEREAS it
is also deemed necessary to further develop the general principles of
transparency, economy and fairness in the award of contracts in public-private
partnership through the establishment of related institutions and specific procedures to award such contracts, and to regulate, monitor and supervise
such Projects and to provide for the
matters ancillary there to and
connected therewith; It
is hereby enacted as follows: CHAPTER
I PRELIMINARY 1. Short title, extent and commencement.---(1)
This Act may be called the Khyber Pakhtunkhwa Public Private Partnership Act,
2014. (2) It extends to the whole of the Province
of the Khyber Pakhtunkhwa. (3) It shall come into force at once. 2. Definition.--- In this Act, unless the context otherwise requires,- [1][(a) “Bidder” or “bidders” means a person,
including a group or associations of persons or company as defined in section
80 of the Income Tax Ordinance, 2001 thereof, that participate in selection
proceedings concerning any project;] (i)
“Committee” means the Public Private Partnership
Committee established under section 3 of this Act; (ii)
“Contracting Authority”
means a department, attached department, a body corporate, autonomous body of the Government,
local government, or
any organization
or corporation
owned
or controlled
by the
Government or local government; (iii)
“Concessionaire” includes a private party or person that carries
out an infrastructure Project under a Concession
Contract entered into with a Contracting
Authority; (iv)
“Concession Contract” means the
mutually binding public-private partnership agreement or agreements between the
Contracting Authority and the Concessionaire that set forth the terms and
conditions for the implementation of an infrastructure Project in the form of Build Operate Transfer (BOT), Build Own Operate Transfer (BOOT), Design Build Finance Operate
(DBFO) or any other variant of
Public Private Partnership; (v)
“development Project” means a
program, activity or a scheme, meant to ensure, improve or consolidate service
delivery in any social or development sector, whether or not reflected in the
annual development program of the Province and shall include interventions such
as research, modernization of processes, addressing lags in service delivery or
improvements in the general standards of living [2][Deleted]; (vi)
“feasibility study" means a
study undertaken to explore the technical, financial, legal, social,
environmental and gender mainstreaming feasibility of undertaking an
infrastructure or development facility as a Public Private Partnership; (vii)
“Government” means the Government
of the Khyber Pakhtunkhwa; (viii)
“Infrastructure facility” means physical
facilities and systems
that directly or indirectly provide services to the general
public; (ix)
“Infrastructure Project” means the
design, construction, development and operation of new infrastructure
facilities or the rehabilitation, modernization, expansion, maintenance or operation
of existing infrastructure facilities; (x)
“Lender" means a financial
institution, bank, or establishment providing financial support with
or without security; [3][(l) “Person”
means a company, an entity, a consortium, a firm, an association, a body of
individuals, or a sole proprietor other than a Contracting Authority and
includes an entity, agency, corporation, company, a consortium or other body or
institution owned or controlled by the Federal Government or a Provincial
Government;] (m)
“PPP Node” means the Public
Private Partnership Node, established under section 7 of this Act; (n)
"PPP Unit" means the
Public Private Partnerships Unit established under section 5 of this Act; (o)
“Project” includes the
developmental Project or the infrastructure Project, as the case may be; (p)
“Public Private Partnership” means an arrangement between a Contracting Authority
and a Concessionaire under which the Concessionaire- (i)
undertakes
to perform a public function or provide a service on behalf of the Contracting
Authority; (ii)
receives
a benefit for performing a public function by way of- (a)
compensation from a public fund,
if so permitted by the relevant law; (b)
charges or user fees collected by
the Concessionaire from users or consumers of a service provided to them; or (c)
a combination of such
compensation and such charges or fees; and (iii)
is generally liable for risks
arising from the performance of the function in accordance with the terms of
the Concession Contract; (q)
“Public Procurement Rules” means the Khyber
Pakhtunkhwa Public Procurement Rules, as may be framed
by the Government from time to time,
in accordance with the provisions of the Khyber Pakhtunkhwa Public Procurement
Regulatory Authority Act, 2012; (r)
“Regulatory Agency” means a public authority that is entrusted
with the power to issue and enforce rules and regulations governing the
infrastructure facility or the provision
of the relevant services; [4][Deleted] (t)
“unsolicited proposal” means any proposal
relating to the implementation of an infrastructure Project that is not submitted
in response to a request or solicitation issued by the
Contracting Authority within the context of a selection procedure; (u)
"user fee" means the
rate, toll, fee, or other charge imposed for the use of all or part of an
infrastructure or development facility or service; and (v)
"value for money" means
that the undertaking of a public function of the Contracting Authority by a
Concessionaire under a Public Private Partnership results in a net benefit
accruing to that Contracting Authority defined in terms of cost, price,
quality, quantity, timeliness or risk transfer. Chapter-II Institutional Arrangements 3. Establishment
of the Public Private Partnership Committee.---(1) As soon as may be after the commencement of this Act, the Government
shall establish a Committee to be known as the Public Private Partnership Committee with a mandate
to promote, facilitate, coordinate and oversee private investment in
infrastructure or development Projects using the public-private partnership
approach. (2) The Committee shall comprise of –
(3) The
Chairman of the Committee may co-opt such number of Sectoral Experts, as he may
deem fit. (4) The members mentioned at clause (viii) of sub-section (2)
shall be nominated for a period of two years and shall be
eligible for re-nomination for two terms only. They shall be selected after careful consideration of any actual or potential conflicts of interest. If any
conflict of interest arises during the tenure of any member, such
person shall be removed from
the Committee and replaced with an eligible person by the majority votes of the
members of the Public Private Partnership Committee. (5)
The meetings
of the Committee
shall be presided over by the Chairman and in his absence
by the Vice-Chairman. (6) The
quorum of the Committee shall be nine members including Chairman. (7) The decisions of the Committee
shall be taken by the majority of its members present. In case of a tie, the presiding member shall have the casting vote. (8)
All orders, determinations, and decisions of the Committee
shall be rendered
in writing and signed
by the Secretary of the Committee, subject to approval
of Chairman
or
Vice Chairman, as the case may be. 4. Functions
of the Committee.---(1) The
functions of the Committee shall be to- (a)
ensure that each draft Concession
Contract is consistent with the provisions of this Act; (b)
formulate policy guidelines on
Public Private Partnerships; (c)
ensure that all Projects are
consistent with the provincial priorities specified in the relevant sector
policy and strategies; (d)
approve a Project proposal
submitted to it by a Contracting Authority of any amount: provided that no further approval
shall be required from any other forum for the said project; (e)
approve award of Concession Contracts
and all other supplemental Public Private Partnership agreements; (f)
authorize allocations from the
Fund establish under this Act; (g)
formulate or approve standards,
guidelines and procedures for awarding Concession Contracts and standardized
bid documents; (h)
review the legal, institutional
and regulatory framework of Public Private Partnerships; (i)
approve additions to the
organizational structure of the PPP Unit by giving solid reasons for addition; (j)
oversee the monitoring and
evaluation by contracting authorities, of a Public Private Partnership from the
commencement to the post completion stage; (k)
ensure approval of, and fiscal
accountability in the management of, financial and any other form of support
granted by Government in the implementation of Projects under this Act; (l)
ensure the efficient
implementation of any Concession Contract entered into by a Contracting
Authority; and (m)
perform such other functions as
may be conferred on it under this Act or under any other law for the time being
in force. (2) The Committee shall have all the powers
necessary for the proper discharge of its functions under this Act and without
prejudice to the generality of the foregoing, shall have the power to- (a)
oversee the implementation of
policies formulated under clause (b) of sub-section(1) of section 4; (b)
require any information from any
party to a Project on any matter relating to a Public Private Partnership; and (c)
take custody of a Concession
Contract made under this Act and monitor compliance with the terms and conditions
of the Concession Contract. (3) The Committee with the
prior approval of Provincial
Development Working Party (PDWP) may
authorize utilization of an amount from the fund established under the Khyber Pakhtunkhwa Hydel Development Fund
Ordinance, 2001(Ord. No. XXVI of 2001), for Energy and Power Development Projects. (4) The Committee shall meet
once in two months and may meet earlier if so required. The Secretary of the
Committee may take approval of any decision through circulation from members of
the Committee; (5) The Committee
may establish such sub-committees as it may consider necessary for the better
performance of its functions and the exercise of its powers under this Act. (6) The Committee may co-opt into the
membership of a sub-committee established under sub-section (5), such persons
whose knowledge and skills are found necessary for the performance of the
functions of the sub-committee. (7) The Committee may, by resolution either
generally or in any particular case, delegate to any sub-committee or to any
member, officer, employee or agent of the Committee, the exercise of any of the
powers or the performance of any of the functions of the Committee under this
Act or under any law. 5. Public
Private Partnerships Unit.--- (1)
There shall be established a Unit to be known as the Public Private
Partnership Unit, under the chairmanship of the Secretary to Government
Planning and Development Department, with permanent members not below the rank
of Additional Secretary, nominated from the Finance Department and Law,
Parliamentary Affairs and Human Rights Department and such other co-opted
members as the Committee deems appropriate. (2) Committee shall be at liberty to add
other members in the composition of PPP Unit. 6. Functions of the PPP Unit.---(1) The
functions of the PPP Unit shall be to- (a)
serve as the secretariat and
technical arm of the Committee;
and (b)
provide technical, financial and
legal expertise to the Committee and any PPP Node established under this Act. (2) In the performance of its functions under
sub-section (1), the PPP Unit shall- (a)
serve as a resource centre on
matters relating to Public Private Partnerships; (b)
conduct civic education to
promote the awareness and understanding of the Public Private Partnerships
process amongst stakeholders; (c)
provide capacity building to, and
advise contracting authorities or other parties involved in the planning,
coordinating, undertaking or monitoring of Projects under this Act; (d)
rate, compile and maintain an
inventory of Public Private Partnership Projects that are highly rated and
which are likely to attract private sector investment; (e)
develop an open, transparent,
efficient and equitable process based on principles of social justice, equity
and maintenance of Ecological balance for ensured sustainability through
holistic approach for managing the identification, screening, prioritization,
development, procurement, implementation and monitoring of Projects, and ensure
that the process is applied consistently to all Projects; (f)
conduct research and gap analysis
to ensure continuous performance improvement in the implementation of Public
Private Partnerships; (g)
collate,
analyze and disseminate information including
data on the liabilities of the Government in relation to a Project; (h)
make
recommendations on the approval or rejection of a Project, prior to submission
to the Committee for approval; (i)
assist
contracting authorities, where it considers it necessary, to design, identify,
select, prioritize, appraise, evaluate and negotiate infrastructure and
development Projects; (j)
maintain
a record of all Project documentation; (k)
review
and assess requests for Government support in relation to a Project and advise
the Committee on the support that should be accorded in relation to a Project; (l)
assist
the Committee in formulating guidelines and standard documentation required
under this Act; (m)
liaise
and supervise the contracting authorities in their roles in the various stages
of a Project cycle; (n)
ensure
that the tendering process relating to a Project conforms with this Act and to
procurement best practices; (o)
put in place measures to eliminate constraints
limiting the realization of benefits expected from a Public Private Partnership; (p)
monitor
contingent liabilities and accounting and budgetary issues related to Public
Private Partnerships with the relevant
offices within the Department responsible for finance; and (q)
carry
out such other functions as may be conferred on it by the Committee from time
to time under this Act. (3) The PPP Unit shall
prepare financial accounts and an inventory of any monies allocated to any fund
under this Act, any financial support received by and any success fees received
by it from a Concessionaire as the case may be, under this Act. 7.
Establishment of a PPP Node.---(1) A
Contracting Authority that intends to enter into a Public Private Partnership
arrangement in form of a Concession Contract with a Concessionaire shall
establish a Public Private Partnership Node. (2) A PPP Node established under sub-section
(1) shall be headed by the principal accounting officer of the Contracting
Authority and shall consist of such other financial, technical, procurement and
legal personnel as that authority shall, in consultation with the unit,
consider necessary for the performance of its functions in relation to a
Project under this Act. (3) A
PPP Node shall, on behalf of the Contracting Authority – (a)
identify, screen and prioritize
Projects based on guidelines issued by the Committee; (b)
prepare and appraise each
Concession Contract to ensure its legal, regulatory, social, economic and
commercial viability; (c)
ensure that the parties to a
Concession Contract comply with the provisions of this Act; (d)
undertake the tendering process
in accordance with this Act; (e)
monitor the implementation of a
Concession Contract entered into with
the contacting authority; (f)
liaise
with all key stakeholders during a Project cycle; (g)
oversee
the management of a infrastructure or development Project in accordance with
the Concession Contract entered into by the Contracting Authority; (h)
submit
to the PPP unit, annual or such other period reports on Concession Contracts
altered into by the Contracting Authority relating to a Project under this Act;
(i)
maintain
a record of all documentation and Concession Contract entered into by the
Contracting Authority relating to an infrastructure or development Project
under this Act; (j)
prepare
Projects in accordance with guidelines and standard documents issued by the
Committee under this Act; (k)
ensure
that the transfer of assets at the expiry or early termination of a Concession
Contract is, consistent with the terms and conditions of
the Concession Contract, where the Concession Contract involves a transfer of assets; and (l)
carry out such other
functions as may be assigned to it by the Contracting Authority. (4) In performing its
functions under sub-section (1), a PPP Node shall report to the PPP Unit and
shall- (a)
implement
the recommendations and guidelines issued by the PPP Unit; and (b)
submit
such information as shall be required by the PPP Unit or the Committee. Chapter
III PRIVATE PARTICIPATION IN PUBLIC INFRASTRUCTURE 8. Private sector participation.---(1) Notwithstanding anything to the contrary in any other law for the time being in
force, Government, its contracting
authorities and local bodies will be authorized to seek participation from the
private sector in appropriate
Projects, subject to the provisions of this Act. (2) Subject
to the provisions and the procedures
outlined in this Act, Government and its
contracting authorities shall be fully
empowered to enter into Concession
Contract and arrangements
with Concessionaires under mutually
agreed terms and conditions in one or several
Project planning and management functions such as designing, financing, building, constructing, owning,
operating and maintaining different infrastructure Projects or
development programs. (3) Government and its contracting authorities with the approval of the Committee may enter Concession Contract to vest public property in Concessionaire for
development and other appropriate purposes. The relevant contracting authorities may transfer title in Public Properties to Concessionaire
on appropriate terms and conditions
as the Committee may deem fit. (4) Government and its contracting authorities
subject to the general or special approval of the Committee, shall be competent to pay any
fees for services performed by private
parties under duly authorized Concession Contracts including
but not restricted to user fees,
subsidies, revenue shortfall
guarantees and may appropriate monies
for such purposes. 9.
Applicability.---(1) Subject
to the provisions contained hereinafter and the overall control of the
Committee, Concession Contracts in nature of Public Private Partnership may be
entered into by the relevant contracting authorities [8][Deleted]. [9][(2) The Contracting Authority, in case of
projects, costing more than rupees five hundred (500) million, shall obtain the
approval of the Chief Minister regarding the application of the provisions of
this Act to the projects or otherwise and in case of projects, costing upto
rupees five hundred (500) million, the Contracting Authority shall decide
itself the mode of its implementation under this Act or otherwise, as the case
may be.] [10][(3) Notwithstanding anything contained in
sub-section (2), irrespective of the cost, the projects in which leasing of
only state land is involved, shall be dealt with in accordance with the lease
policy of Government, issued from time to time.] 10.
Basis for Public Private
Partnership.---(1) The Committee, with the assistance of
the PPP Unit, shall devise sector specific methodologies, establishing the
general criterion for selection of infrastructure Projects for Concessionaire
contracts. (2) Each of such sector specific
methodologies shall require a preliminary needs assessment, conducted by the
relevant Contracting Authority, which shall among other things, states the
economic, financial, legal and administrative grounds of the decision to launch
an award procedure for such a Concession Contract. (3) This assessment shall include a
comparative analysis of the various options, particularly in terms of best
value for money, sharing of risks and performance, as well as sustainable
development issues, if in response to an unforeseeable situation, this
assessment may be succinct. (4) Concessions Contracts may only be
signed in situations where the preliminary needs assessment conclusively shows
that: (a)
given the degree
of complexity of the infrastructure Project, the Contracting Authority is not
objectively in a position to define unaided and in advance the technical means
to meet its needs or to make the financial or legal arrangements for the
Project; or (b)
the infrastructure Project is a
matter of urgency, involving making up for a delay, detrimental to the general
interest, affecting the completion of public facilities or the performance of a
public service mission, irrespective of the causes of the delay, or responding
to an unforeseeable situation; or (c)
given the Project
characteristics, the requirements of the public service for which the
Contracting Authority is responsible, or the inadequacies and difficulties
observed in carrying out comparable Projects, resorting to such a contract
presents a more favorable balance of advantages versus disadvantages compared
to other kinds of public procurement contracts.
The criterion of deferred payment shall not alone constitute an
advantage. 11.
Project identification and
preparation.---(1)
Subject to the provisions of [11][sections 9 and 10]
of this Act, any Contracting Authority may identify and prepare any
infrastructure or development Project for its implementation through Public
Private Partnership and shall submit an advance report to this effect, to the
Committee. (2) The Contracting Authority, with the
assistance of its relevant PPP Node, shall identify and conceptualize potential
Projects from its master plans and other planning documents. (3) The Contracting Authority shall
prioritize the Projects within its sector or geographical area, using criteria
such as supply and demand gaps, social and economic benefits, focusing on
Gender equity, financial attractiveness, risks and uncertainties involved, and
readiness for implementation having Gender equity and sustainability as cross
cutting themes. (4) Preparation of a high-priority Project
shall consist of a feasibility study, initial environmental examination or
environmental impact assessment, risk analysis, analysis of the need for
Government support, stakeholder consultations, determination of the PPP Node,
and preparation of bid documents including a draft PPP Concession Contract. (5) The Contracting Authority shall submit a
viable Project proposal through the PPP Unit to the Committee. 12. Project
prioritization and approval.---(1) The PPP Unit shall exercise quality
control by reviewing the viability of a Project proposal and its completeness
in terms of documentation. (2) The PPP Unit shall prioritize the
Projects across sectors and the Province that pass the criteria, by taking into
account provincial development objectives, and submit them to the Committee for
approval. (3) The PPP Unit shall include approved
Projects in a priority list of the Province and widely publicize them. 13. Approval
of Government support.– (1) When a proposal for Public Private
Partnership has been finalized, the Contracting Authority shall, submit the
proposal to the PPP Unit under intimation to the Committee. The proposal
amongst other particulars shall include any requests for Government support
which are integral to the Project proposal. (2) The PPP Unit, shall review the
justification and eligibility of the infrastructure or the development Project
for public-private partnership, and analyze the fiscal impact of the related
direct and contingent liabilities. (3) The PPP Unit shall, on the basis of
review and analysis, make a recommendation to the Committee for approval,
rejection or reconsideration of the requested Government support. (4) If approved by the Committee, the
Finance Department shall make the necessary arrangements for including such
support in the annual budget of the Province. 14. Consideration by the
Committee.– (1) The Committee
shall, by taking into account the recommendations of the PPP Unit, consider a Project proposal submitted by a Contracting
Authority and may approve the proposal
with or without modification, reject it or return it to the Contracting
Authority for reconsideration. (2) In case a Project
proposal is returned for reconsideration, the Contracting Authority shall take suitable action on the decision
taken by the Committee and may resubmit the proposal for approval by the
Committee. CHAPTER - IV SELECTION OF THE CONCESSIONAIRE 15. Rules
governing the selection proceedings.---Subject
to overall supervision and control of the Committee, once a Project is approved
in terms of preceding Chapter, the selection of the Concessionaire shall
be conducted in accordance with section 26 to 47 of this Act and, for matters
not provided herein, in accordance with
the Khyber Pakhtunkhwa Public Procurement Rules. 16. Purpose and procedure of pre-selection.---(1) The Contracting Authority,
with the approval of the Committee, shall engage in pre-selection proceedings
with a view to identifying bidders that are suitably qualified to implement the
envisaged infrastructure Project. (2)
The invitation to participate in the
pre-selection proceedings shall be published in accordance with the Khyber Pakhtunkhwa Public Procurement Rules. (3) To the extent not already
required by the Khyber Pakhtunkhwa Public Procurement
Rules, the invitation
to participate in the pre-selection proceedings shall include
at least the following: (a)
a description of the infrastructure facility or development program; (b)
an indication of other essential elements of the Project, such as the services to be delivered by the
Concessionaire, the financial arrangements envisaged by the Contracting Authority, for example, whether the Project will be
entirely financed by user fees or tariffs
or whether public
funds such as direct payments, loans or guarantees may be provided
to the Concessionaire; (c)
where already known, a summary of
the main required terms of the Concession Contract to be entered
into; (d)
the manner and place for the submission of applications for pre-
selection and the deadline for the submission, expressed as a specific date and time, allowing sufficient time
for bidders to prepare and submit their applications; (e)
the manner and place for solicitation of the pre-selection documents; and (f)
the share of debt equity to be
specified in publication. (4)
To
the extent not already required
by the Khyber Pakhtunkhwa
Public Procurement Rules, the pre- selection documents shall include at least the following information: (a)
the pre-selection criteria in accordance with section 17 of this Act; (b)
whether the Contracting Authority
intends to waive the limitations on the participation of consortia set forth in section 18 of this Act; (c)
whether the Contracting
Authority intends to request only a limited number of pre-selected bidders to submit proposals upon completion of the
pre-selection proceedings in accordance with sub-section (2) of section 19 of
this Act, and, if applicable, the manner in which this selection will be carried
out; and (d)
whether the Contracting
Authority intends to require the successful
bidder to establish an independent legal entity established and incorporated
under the Company laws of Pakistan in accordance with section 30
of this Act. (5)
For
matters not provided
for in this section,
the pre-selection proceedings
shall be conducted
in accordance with
the Khyber Pakhtunkhwa Public Procurement Rules. 17. Pre-selection criteria.—In order to
qualify for the selection proceedings, interested bidders must meet objectively justifiable criteria that
the Contracting Authority in
light of recommendations of the PPP Unit considers
appropriate in the particular proceedings, as stated in the pre-selection
documents. These criteria
shall include at least the following: (a)
adequate professional and
technical qualifications, human resources, equipment and other physical facilities as necessary to carry out all the phases
of the Project, including design,
construction, operation and maintenance; (b)
sufficient ability to manage the financial
aspects of the Project and capability to sustain its financing requirements; and (c)
appropriate managerial and
organizational capability, reliability and experience, including previous
experience in operating similar infrastructure facilities. 18. Participation of consortia.—(1) The
contracting authority, when
first inviting the
participation of bidders in the
selection proceedings, shall allow them to form bidding consortia. The
information required from members of bidding consortia to demonstrate their
qualifications in accordance with section 17 of this Act, shall relate to the consortium as a whole as well as to its individual participants. (2) Unless
otherwise authorized by the
Committee and stated in the pre-selection documents, each member of a consortium may participate, either
directly or indirectly, in only one consortium, at the same time. A violation of this rule shall cause the disqualification of the consortium and of the individual members. (3)
When considering the qualifications
of bidding consortia, the Contracting Authority shall consider the capabilities
of each of the consortium members and assess whether the combined qualifications
of the consortium members are adequate
to meet the needs of all phases of the Project. 19. Decision on pre-selection.—(1) The Contracting
Authority shall make a decision with respect to the qualifications of
each bidder that
has submitted an
application for pre- selection. In reaching that decision, the Contracting
Authority shall apply only
the criteria that are set forth in the pre-selection documents. All
pre-selected bidders shall thereafter be invited by the Contracting Authority
to submit proposals in accordance with sections 20 to 27
of this Act. (2)
Notwithstanding anything contained in sub-section(1), the
contracting authority may,
provided that it has made an appropriate statement in the pre-selection documents to that effect, reserve the
right to request proposals upon completion of the pre- selection proceedings only from a short-listed
bidders that best meet the pre-selection criteria; provided that there are at least 3 short listed
bidders. For this purpose, the Contracting
Authority shall rate the
bidders that meet
the pre-selection criteria
on the basis
of the criteria applied to assess their qualifications and draw up the list of bidders
that will be invited to submit
proposals upon completion of the pre-selection proceedings. In drawing up the list, the Contracting Authority shall apply only the
manner of rating for
short-listing that is set forth in the pre-selection documents. 20.
Single-stage and two-stage
procedures for requesting proposals.—(1) The contracting
authority shall provide
a set of
the request for proposals and related documents issued in
accordance with section 21 of this Act, to each pre-selected bidder that pays
the price, if any, charged for those documents. (2) Notwithstanding
the above, the Contracting Authority may use a two- stage procedure to request
proposals from pre-selected bidders when the Contracting Authority does not
deem it to be feasible to describe in the request for proposals the
characteristics of the Project such as Project specifications, performance
indicators, financial arrangements or contractual terms in a manner
sufficiently detailed and precise to permit final
proposals to be formulated. (3)
Where a two-stage procedure is used, the following provisions shall apply: (a)
the initial
request for proposals shall call upon the bidders to submit, in the first stage
of the procedure, initial proposals relating to Project specifications,
performance indicators, financing requirements or other characteristics of the
Project as well as to the main contractual terms proposed by the Contracting
Authority; (b)
the Contracting Authority may convene meetings
and hold discussions with any of the bidders to
clarify questions concerning the initial request for proposals or the initial proposals and accompanying documents submitted by the bidders. The Contracting Authority shall
prepare minutes of any such meeting or discussion containing the questions
raised and the clarifications provided by the Contracting
Authority; (c)
following
examination of the proposals received, the Contracting Authority may review
and, as appropriate, revise the initial request for proposals by deleting or
modifying any aspect of the initial Project specifications, performance
indicators, financing requirements or other characteristics of the Project,
including the main contractual terms, and any criterion for evaluating and
comparing proposals and for ascertaining the successful bidder, as set forth in the initial request
for proposals, as well as by adding
characteristics or criteria to it. The Contracting Authority shall
indicate in the record of the selection proceedings to be kept pursuant to
section 36 of this Act, the justification for any revision to the request for
proposals. Any such deletion, modification or addition shall be communicated in the invitation to submit final
proposals; and (d)
in the second stage of the
proceedings, the Contracting Authority shall invite the bidders to submit final
proposals with respect
to a single set of Project specifications, performance
indicators or contractual terms in accordance
with section 21 to 27 of this
Act. 21. Content of the request
for proposals.— To
the extent not already required by the Khyber Pakhtunkhwa Public Procurement
Rules, the request for proposals shall include at least the following information: (a)
general information as may be required
by the bidders in order to
prepare and submit their proposals; (b)
Project specifications and
performance indicators, as appropriate, including the
contracting authority’s requirements regarding
safety and security standards and environmental protection; (c)
the contractual terms proposed by
the Contracting Authority, including an indication of which terms
are deemed to be non-negotiable; and (d)
the criteria for evaluating
proposals and the thresholds, if any, set by the Contracting Authority in
consultation with PPP Unit for identifying non-responsive proposals; the
relative weight to be accorded to each evaluation criterion and the manner
in which the criteria and
thresholds are to be applied in the evaluation and rejection of proposals. 22. Bid securities.—(1) The request
for proposals shall set forth the requirements with respect to the
issuer and the nature, form, amount and other principal terms and conditions of the required
bid security. (2) A
bidder shall not forfeit any bid security that it may have been required to provide, other than in cases of: (a)
withdrawal or modification of a
proposal after the deadline for submission of proposals and, if so stipulated in the request
for proposals, before that deadline; (b)
failure to enter into final
negotiations with the Contracting Authority pursuant to sub-section (1) of section 27 of this Act; (c)
failure to
submit its best
and final offer
within the time
limit prescribed by the Contracting Authority pursuant to sub-section (2) of section 27 of this Act; (d)
failure to sign the Concession
Contract, if required by the Contracting Authority to do so, after the proposal has been accepted; and (e)
failure to provide required
security for the fulfillment of the Concession Contract after the proposal has
been accepted or to comply with any other condition prior to signing the
Concession Contract specified in the request for proposals. 23.
Clarifications and modifications.—
The
Contracting Authority may, whether on its own initiative or as a result of a
request for clarification by a bidder, review and, as appropriate, revise any
element of the request for proposals as set forth in section 21 of this Act.
The Contracting Authority shall indicate
in the record of the selection proceedings to be kept pursuant
to section 36 of this Act, the justification for any revision
to the request for proposals. Any such deletion, modification or
addition shall be communicated to the bidders in the same manner as the request
for proposals at a reasonable time prior to the deadline
for submission of proposals. 24.
Evaluation criteria.— (1) In addition to
Public Private Partnership policy and criteria laid down by the Committee, the
evaluation and comparison of the technical proposals, while generally insuring
value for money,
shall include
at least the following: (a)
technical soundness; (b)
compliance with environmental standards; (c)
operational feasibility; and (d)
quality of services and measures to ensure their
continuity. (2) The criteria for
the evaluation and comparison of the financial and commercial proposals shall include,
as appropriate: (a)
the present value of the proposed
tolls, unit prices and other charges over the Concession period; (b)
the present value of the proposed
direct payments by the Contracting Authority,
if any; (c)
the costs for design and
construction activities, annual operation and maintenance costs, present value
of capital costs and operating and maintenance
costs; (d)
the extent
of financial support,
if any, expected
from a Regulatory Agency; (e)
the soundness of the proposed financial
arrangements; (f)
the extent of acceptance of the negotiable
contractual terms proposed by the Contracting
Authority in the request for proposals;
and (g)
the social and economic
development potential offered by the proposals. 25.
Comparison and evaluation of proposals.— (1) The Contracting Authority shall
compare and evaluate
each proposal in accordance
with the evaluation criteria, the relative weight accorded to each such criterion
and the evaluation process set forth in the request
for proposals. (2) For the purposes of sub-section (1), the Contracting
Authority in consultation with PPP Unit, may establish thresholds or
qualifying score with respect to quality, technical, financial and commercial
aspects. Proposals that fail to achieve the thresholds shall be regarded as
non- responsive and rejected
from the selection
procedure. 26.
Further demonstration of
fulfillment of qualification criteria.— The Contracting Authority may
require any bidder that has been pre- selected
to demonstrate again
its qualifications in accordance with the same criteria used for pre-selection. The
Contracting Authority shall disqualify any bidder that fails to demonstrate again its qualifications if requested to do so. 27.
Final negotiations.—(1) The
Contracting Authority shall rank all responsive proposals on the basis of the
evaluation criteria and invite for final negotiation of the Concession Contract
the bidder that has attained the best rating. Final negotiations shall not
concern those contractual terms, if any that were stated as non-negotiable in the final request
for proposals. (2) If it becomes apparent to the
Contracting Authority that the negotiations with the invited bidder will not
result in a Concession Contract, the Contracting Authority shall inform the
bidder of its intention to terminate the negotiations and give the bidder
reasonable time to formulate its best and final offer. If the Contracting
Authority does not find that proposal acceptable, it shall terminate the
negotiations with the bidder concerned. The Contracting Authority shall then
invite for negotiations the other bidders in the order of their ranking until
it arrives at a Concession Contract or rejects all remaining proposals. The
Contracting Authority shall not resume negotiations with a bidder with which
negotiations have been terminated pursuant
to this sub-section. CHAPTER - V NEGOTIATION OF CONCESSION CONTRACTS WITHOUT COMPETITIVE PROCEDURES 28.
Circumstances authorizing award
without competitive procedures.— Subject to
approval by the Committee, the Contracting
Authority is authorized to negotiate
a Concession Contract without
using the procedure set forth in sections 16 to 27 of this Act, in the
following cases: (a)
when there is an urgent need for
ensuring continuity in the provision of the service
and engaging in the procedures set forth in sections
16 to 27 of this Act, would be impractical, provided that the circumstances
giving rise to the urgency were neither foreseeable by the Contracting
Authority nor the result of dilatory conduct on its part; (b)
where the Project is of short
duration and the anticipated initial investment value does not exceed the
amount of rupees five hundred (500) millions; (c)
where the Project involves
matters relating to public peace and security or has to address
disasters, calamities and other emergencies of like nature; (d)
where there is only one source
capable of providing the required
service, such as when the provision of the service requires the use of
intellectual property, trade secrets or other exclusive rights owned or possessed
by a certain person or persons; (e)
in cases of unsolicited proposals falling under
section 33 of this Act; (f)
when an invitation to the pre-selection proceedings or a request for proposals has been issued
but no applications or proposals were submitted or all proposals failed to meet the
evaluation criteria set forth in the request for proposals and if, in the
judgment of the Contracting Authority, issuing a new invitation to the
pre-selection proceedings and a new request for proposals would be unlikely to result in a Project
award within a required time frame;
and (g)
in other cases where the Committee authorizes such an exception for
compelling reasons of public interest. [12][28A. Special
exemption.---(1)
Notwithstanding anything contained in this Act or in the Public Procurement
Rules, requirement of section [13][16] to 27 ( both
inclusive) and section 29 shall not apply to- (a) projects that are undertaken in Public
Private Partnership mode but where the Concessionaire is an entity, agency,
corporation, company a consortium or other body or institution owned or
controlled by the Federal Government of Provincial Government; (b) projects where the
Concessionaire is a person wherein the majority shareholder therein is state
owned enterprise, entity, agency, corporation or company, owned or controlled
directly or indirectly by a foreign state; and (c) projects undertaken in
result of international obligation, commitment or arrangement of the Government
arising out of an international agreement or arrangement with a foreign state
or states, or any international multilateral financial institution or a person. (2) Provisions relating to competition,
advertisement, and response time so provided in Public Procurement Rules shall
not apply to the projects undertaken under this section.] 29.
Procedures for negotiation of a
Concession Contract.— Where a Concession Contract is negotiated without
using the procedures set forth in sections 16 to 27 of this Act, the Contracting
Authority shall- (a)
except for Concession
Contracts negotiated pursuant
to clause (c) of section 28 of this Act, cause a notice
of
its
intention
to
commence
negotiations in respect of a Concession Contract to be published in accordance with the Khyber Pakhtunkhwa Public Procurement
Rules; (b)
engage in negotiations with as many persons as the Contracting Authority, with help of the
PPP Unit, judges capable of carrying out the Project as circumstances permit; and (c)
establish evaluation criteria
against which proposals shall be evaluated and ranked. CHAPTER - VI UNSOLICITED PROPOSALS 30. Admissibility of unsolicited proposals.—As an exception to sections
16 to 27 of this Act, the Contracting Authority is
authorized to consider unsolicited proposals pursuant to the procedures set
forth in sections 31 to 33 of this Act, provided that such proposals do not relate to
a Project for which selection
procedures have been initiated or announced. 31. Procedures for determining the admissibility
of unsolicited proposals.— (1) Following
receipt and preliminary examination of an unsolicited proposal, the Contracting
Authority shall promptly inform the proponent or investor whether or not the Project is considered to be potentially in the public interest. (2) If the Project
is considered to be potentially in the public interest
under sub-section (1), the
contracting authority shall
invite the proponent
to submit as much information on the proposed Project as is feasible at this stage
to enable the Contracting Authority to make a proper evaluation of the
proponent’s qualifications and
the
technical
and
economic
feasibility
of
the
Project and to determine whether the Project is likely to be successfully
implemented in the manner proposed in terms acceptable to the Contracting
Authority. For this purpose, the
proponent shall submit a technical and economic feasibility study, an
environmental impact study and satisfactory information regarding the concept or technology
contemplated in the proposal. (3) In considering an unsolicited proposal,
the Contracting Authority shall respect the intellectual property, trade
secrets or other exclusive rights contained in, arising from or referred to in
the proposal. Therefore, the Contracting Authority shall not make use of
information provided by or on behalf of the proponent in connection with its
unsolicited proposal other than for the evaluation of that proposal, except
with the consent of the proponent. Except as otherwise agreed by the parties, the Contracting
Authority shall, if the proposal is rejected, return to the proponent the original and any copies
of documents that the proponent submitted
and prepared throughout the procedure. 32.
Unsolicited proposals that do not
involve intellectual property, trade secrets or other exclusive rights.— (1) Except
in the circumstances set forth in section 28 of this Act, the Contracting
Authority shall, if it decides to implement the Project, initiate a selection
procedure in accordance with sections 16 to 27 of this Act, if the Contracting
Authority considers that- (a)
the envisaged output of the Project can be achieved without the use of intellectual property, trade secrets
or other exclusive rights owned or possessed
by the proponent; and (b)
the proposed concept or technology is not truly
unique or new. [14][(2) The
proponent shall be invited to participate in the selection proceedings
initiated by the Contracting Authority pursuant to sub-section (1) and shall be
given the first right to match the lowest bid and if he fails to match the bid,
the Contracting Authority shall direct the best bidder to reimburse to him the
reasonable costs incurred on project preparation as may be specified in the bid
document.] 33.
Unsolicited proposals involving
intellectual property, trade secrets or other exclusive rights.—(1) If
the Contracting Authority determines that the conditions of clauses (a) and (b)
of sub-section (1) of section 32 of this Act, are not met, it shall not
be required to carry out a selection procedure pursuant to model provisions
contain in sections 6 to 17 of this Act. However, the Contracting Authority may still seek to obtain elements
of comparison for the
unsolicited proposal in accordance with the provisions set out in sub-section
(2) to (4) of this section.
(2) Where the Contracting Authority intends
to obtain elements of comparison for the unsolicited proposal, the Contracting
Authority shall publish a description of the essential output elements of the proposal
with an invitation for other interested parties to submit proposals within 30
days. (3) If no proposals in response to an
invitation issued pursuant to sub-section (2)
are received within 30
days, the Contracting Authority may engage in negotiations with the original
proponent. (4) If the Contracting Authority receives
proposals in response to an invitation issued pursuant
to sub-section (2), the Contracting
Authority shall invite the proponents to negotiations in
accordance with the provisions set forth in section 29 of this Act. In the
event that the Contracting Authority receives a sufficiently large number of
proposals, which appear prima facie to meet its needs, the Contracting
Authority shall request the submission of proposals pursuant to sections 20 to
27 of this Act, subject to [15][the first right to
match the best bid of the proponent of the unsolicited proposal] in accordance with sub-section (2) of section 32 of this Act. CHAPTER – VII MISCELLANEOUS PROVISIONS 34. Confidentiality.— The Contracting Authority shall
treat proposals in such a manner as to
avoid the disclosure of their content to competing bidders. Any discussions,
communications and negotiations between the Contracting Authority and a bidder pursuant
to sub-section (3) of section 20 and sections 27, 28, 29 or sub-section (3) and (4) of section 33 of
this Act, shall be confidential. Unless required by law or by a court
order or permitted by the request for proposals, no party to the negotiations shall disclose to any other
person any technical, price or other information in relation to discussions,
communications and negotiations pursuant to the afore- mentioned provisions without the consent
of the other party. 35. Notice of contract award.— Except for
Concession Contracts awarded pursuant to clause (c) of section 28 of this Act,
the Contracting Authority shall cause a notice of the contract award to be
published in official Gazette. The notice shall identify
the Concessionaire and include a summary of the essential terms of the Concession
Contract. 36. Record
of selection and award proceedings.— The Contracting Authority shall
keep an appropriate record of information pertaining to the selection and award
proceedings in accordance with the Khyber Pakhtunkhwa Public Procurement Rules
and the Khyber Pakhtunkhwa Right to Information Ordinance, 2013. 37. Review procedures.— (1) A bidder
that claims to have suffered, or that may suffer, loss or injury due to a breach of a duty imposed
on the Contracting Authority may seek review of the Contracting Authority’s
acts or failures to act through a Review Petition filed within fifteen days of
such grievance before the PPP Unit. (2) The
PPP Unit, shall within thirty day of the receipt of Review Petition, convene a
hearing, affording an opportunity of being heard both to the bidder and the
Contracting Authority, record statements, receive evidence and other relevant
material, and decide the matter accordingly. (3) Subject
to a further right of appeal under sub-section (4), the decision of the PPP
Unit shall be binding on the parties. (4) Any
party, aggrieved of the decision of PPP Unit, may institute an appeal to the
Committee within fifteen days of the date of decision aggrieved of. The
Committee may, in its next meeting to be held after receipt of the Appeal, pass
a final order on the matter of complaint of the bidder. CHAPTER - VIII CONTENTS AND IMPLEMENTATION OF THE
CONCESSION CONTRACT 38.
Contents and implementation of
the Concession Contract.—The Concession Contract shall provide
for such matters as the parties deem appropriate, such
as: (a)
the nature and scope of works to be performed and services to be
provided by the Concessionaire; (b)
the conditions for provision of
those services and the extent of exclusivity, if any, of the Concessionaire’s
rights under the Concession Contract; (c)
the assistance that the
Contracting Authority may provide to the Concessionaire in obtaining licenses
and permits to the extent necessary for the implementation of the infrastructure Project; (d)
any requirements relating to the
establishment and minimum capital of a legal entity incorporated in accordance
with section 40 of this Act; (e)
the ownership of assets related to the Project and the obligations of the parties, as appropriate, concerning the acquisition of the Project
site and any necessary
easements, in accordance with sections 41 to 43; (f)
the remuneration of the
Concessionaire, whether consisting of tariffs or user fee of the facility or
the provision of services the methods and formulas for the establishment or
adjustment of any such tariffs or fees and payments, if any, that may be made
by the Contracting Authority or other Regulatory Agency; (g)
procedures for the review and
approval of engineering designs, construction plans and specifications by the
Contracting Authority, and the procedures for testing and final inspection,
approval and acceptance of the infrastructure
facility; (h)
the extent of the
Concessionaire’s obligations to ensure, as appropriate, the modification of the
service so as to meet the actual demand for the service, its continuity and its provision
under essentially the same conditions for all users; (i)
the Contracting Authority’s or other
Regulatory Agency’s right to monitor
the works to
be performed and
services to be
provided by the Concessionaire and the conditions and
extent to which the Contracting Authority or a Regulatory Agency may order variations
in respect of the works and conditions of service or take such other reasonable
actions as they may find appropriate to ensure that the infrastructure facility is properly operated and the services are provided in accordance with the applicable legal and contractual requirements; (j)
the extent of the
Concessionaire’s obligation to provide the Contracting Authority or a
Regulatory Agency, as appropriate, with reports and other information on its operations; (k)
mechanisms to deal with additional costs and other consequences
that might result from any order issued by the Contracting Authority or another
Regulatory Agency in connection with clauses (h) and (i) above, including any compensation to which the
Concessionaire might be entitled; (l)
any rights of the Contracting
Authority to review and approve
major contracts to be entered into by the Concessionaire, in particular
with the Concessionaire’s own shareholders or other affiliated persons; (m)
guarantees of performance to be provided
and insurance policies
to be maintained by the Concessionaire in connection with the
implementation of the infrastructure Project; (n)
remedies available in the event
of default of either party; (o)
the extent to which either party may be exempt from liability for failure or delay in complying with any
obligation under the Concession Contract owing to circumstances beyond its
reasonable control; (p)
the duration of the Concession
Contract and the rights and obligations of the parties
upon its expiry
or termination; (q)
the manner for calculating compensation pursuant to section
57 of this Act; (r)
the governing law and the
mechanisms for the settlement of disputes that may arise between the
Contracting Authority and the Concessionaire; and (s)
the rights and obligations of the
parties with respect to confidential information in terms of section 34 of this Act. 39. Governing laws.—The Public Private Partnership Concession
Contracts shall be governed by the laws of Pakistan and by such laws, as are
applicable in the Province of the Khyber Pakhtunkhwa, unless otherwise
provided in the Concession
Contract. 40.
Organization of the
Concessionaire.— The Contracting Authority may require that the successful bidder to establish a legal entity incorporated under the company laws of Pakistan, provided
that a statement to that effect was made in the pre-selection documents
or in the request for proposals, as appropriate. Any requirement relating to
the minimum capital of such a legal entity and the procedures for obtaining the approval of the Contracting Authority to its
statute and by-laws and significant changes therein shall be set forth in the Concession Contract consistent with the terms of
the request for proposals. 41. Ownership of assets.— Without
affecting the right Contracting Authority to own the infrastructure at the end
of the Concession in case of termination or otherwise, the Concession
Contract shall specify, as appropriate, which assets are or shall be public property
and which assets
are or shall be the private property of the
Concessionaire. The Concession
Contract shall in particular identify the assets belong
to the following categories: (a)
assets, if any, that the
Concessionaire is required to return or transfer to the Contracting Authority
or to another entity indicated by the Contracting Authority in accordance with the terms
of the Concession Contract; (b)
assets, if any, that the Contracting Authority, at its option, may purchase
from the Concessionaire; and (c)
assets, if any, that the
Concessionaire may retain or dispose of upon expiry or termination of the Concession Contract. 42. Acquisition of rights related to the
Project site.— (1) The Contracting Authority or other
Regulatory Agency under the terms of the law and the Concession Contract shall make available
to the Concessionaire or,
as appropriate, shall
assist the Concessionaire in
obtaining such rights related to the Project site, including
title thereto, as may be necessary for the implementation of the Project. (2)
Any compulsory acquisition of land
that may be required for the implementation of the Project shall be carried out
in accordance with the Land Acquisition Act,
1894(Act No. 1 of 1894). 43. Easements.—
(1) The Contracting
Authority or any another Regulatory Agency, on the request of the Contracting
Authority, under the terms of the law and the Concession Contract shall make
available to the Concessionaire or, as appropriate, shall assist the
Concessionaire to enjoy the right to enter upon, transit through or do work or
fix installations upon property of third parties, as appropriate and required
for the implementation of the Project. (2)
Notwithstanding anything contained
in the Easements Act, 1882 (Act No. V of 1882), any other easements and licenses that may be required for the implementation of the Project shall be deemed to have been created in favor of
the Concessionaire from the date of Concession Contract. 44.
Financial
arrangements.—(1) The Concessionaire shall have the right
to charge, receive or collect tariffs or user fees for the use of the facility
or its services in accordance with the Concession Contract, which shall provide
for methods and formulas for the establishment and adjustment of those tariffs
or fees in accordance with the rules established by the competent
Regulatory Agency. (2) The Contracting
Authority shall have the power to make direct payments to the Concessionaire as a substitute for, or in addition to, tariffs or fees for the use of the facility or its services. 45. Security
interests.—(1) Subject to any restriction that may be
contained in the Concession Contract, the Concessionaire has the right to create security
interests over any of its assets, rights or interests,
including those relating to the infrastructure Project, as required to secure any financing needed
for the Project,
including, in particular, the following: (a)
security over movable or
immovable property owned by the Concessionaire
or its interests in Project
assets; and (b)
a pledge of the proceeds of, and
receivables owed to the Concessionaire for, the use of the facility or the services
it provides. (2) The shareholders of the Concessionaire shall have the right to pledge
or create any other security
interest in their
shares in the Concessionaire. (3) No security under
sub-section (1) may be created over public property or other property, assets or
rights needed for the provision of a public service, where the creation of such
security is prohibited by any law. 46.
Assignment of the Concession
Contract.—Except
as otherwise provided in section 45 of this Act, the rights and obligations of
the Concessionaire under the Concession Contract may not be assigned
to third parties without the consent of the Contracting Authority or Government
as the case may be. The Concession Contract shall set forth the conditions
under which the Contracting Authority shall give its consent
to an assignment of the rights and obligations
of the Concessionaire under the Concession
Contract, including the acceptance
by the new Concessionaire of all obligations there-under and evidence
of the new Concessionaire’s
technical and financial capability as necessary for providing the service. 47. Transfer of controlling interest
in Concessionaire.— Except as
otherwise provided in the Concession Contract, a controlling interest in the
Concessionaire may not be transferred to third parties without the consent of
the Contracting Authority. The Concession Contract shall set forth the
conditions under which
consent of the Contracting
Authority shall be given. 48.
Operation of infrastructure.—(1) The Concession Contract shall
set forth, as appropriate, the extent of the
Concessionaire’s obligations to ensure: (a)
the modification of the service so as to meet the demand for the
service; (b)
the continuity of the service; (c)
the provision of the service
under essentially the same conditions for all
users; and (d)
the non-discriminatory access, as appropriate, of other service
providers to any public infrastructure network operated by the Concessionaire. (2)
The Concessionaire shall have the
right to issue and enforce procedures governing the use of the facility,
subject to the approval of the Contracting Authority and the appropriate Regulatory Agency. 49.
Compensation for specific changes
in legislation.—The
Concession Contract shall set forth the extent to which the Concessionaire is
entitled to compensation in the event that the cost of the Concessionaire’s
performance of the Concession Contract has substantially increased or that the
value that the Concessionaire receives for such performance has substantially
diminished, as compared with the costs and the value of performance originally
foreseen, as a result of changes in legislation or regulations specifically
applicable to the infrastructure facility or the services it provides. 50.
Revision of the Concession
Contract.—(1) Without
prejudice to section 49 of this Act, the Concession
Contract shall further set forth the extent to which the Concessionaire is
entitled to a revision of the Concession
Contract with a view to providing compensation in the event that the cost of the Concessionaire’s performance of the Concession contract
has substantially increased
or that the
value that the Concessionaire receives for such
performance has substantially diminished, as compared with the costs
and the value
of performance originally foreseen, as a result
of: (a)
changes in economic or financial conditions; or (b)
changes in legislation or regulations not specifically applicable to the infrastructure facility
or the services it provides: Provided that the economic,
financial, legislative or regulatory changes: (a)
occur after the conclusion of the contract; (b)
are beyond the control
of the Concessionaire; and (c)
are of such a nature that the Concessionaire
could not reasonably be expected to have taken them into account
at the time the Concession Contract was negotiated or to have avoided or overcome their consequences. (2)
The Concession Contract shall establish procedures for revising the terms of the Concession
Contract following the occurrence of any such changes. 51.
Takeover of an infrastructure
Project by the Contracting Authority.— Notwithstanding
anything contained in the Concession Contract to the contrary, the Contracting
Authority shall have the right to temporarily take over the operation of the
facility for the purpose of ensuring the effective and uninterrupted delivery
of the service in the event of serious failure by the Concessionaire to perform
its obligations and to rectify the breach within a reasonable period of time
after having been given
notice by the Contracting
Authority to do so. 52. Substitution of the Concessionaire.— The Contracting
Authority may agree with the entities extending financing for an infrastructure
Project and the Concessionaire to provide for the substitution of the
Concessionaire by a new entity or person appointed to perform under the
existing Concession contract
upon serious breach
by the Concessionaire or other events
that could otherwise justify the termination of the Concession
Contract or other similar circumstances. CHAPTER
- IX DURATION, EXTENSION AND TERMINATION OF THE
CONCESSION CONTRACT 53.
Duration and extension of the
Concession Contract.— The duration of the Concession Contract shall not be
more than 30 years, unless a different duration is set forth in the Concession
Contract for each project, subject to approval of the Committee. The Contracting
Authority shall not agree to extend its duration except as
a result of the following circumstances: (a)
delay in
completion or interruption
of operation due
to circumstances beyond the reasonable control of either party; (b)
Project suspension
brought about by acts of the Contracting Authority or other public authorities; (c)
increase in costs arising from
requirements of the Contracting Authority not originally foreseen in the
Concession Contract, if the Concessionaire would not be able to recover
such costs without
such extension; or (d)
any other reasons, justifying
such extension, so approved by the Committee. 54. Termination of the Concession Contract
by the Contracting Authority.—The Contracting
Authority may terminate the Concession Contract: (a)
in the event that it can no longer be reasonably expected that the Concessionaire will be able or willing
to perform its obligations, owing to insolvency, serious breach or otherwise;
without limiting the generality of the foregoing, circumstances may include: (i)
serious failure to provide
services in accordance with the statutory and contractual standards of quality,
including disregard of price control measures; (ii)
non-excusable suspension or
interruption of the provision of the service without prior consent from the
Contracting Authority; (iii)
serious failure by the
Concessionaire to maintain the facility, its equipment and appurtenances in
accordance with the agreed standards of quality or non-excusable delay in
carrying out maintenance works in accordance with the agreed plans, schedules
and timetables; and (iv)
failure to comply with sanctions
imposed by the Contracting Authority or the Regulatory Agency, as appropriate,
for infringements of the Concessionaire’s duties; and (b)
for compelling reasons of public interest, subject
to payment of compensation to the Concessionaire, the
terms of the compensation to be as agreed in the Concession
Contract. 55. Termination of the Concession Contract
by the Concessionaire.— (1) The Concessionaire may not terminate the
Concession Contract except under the following circumstances: (a)
in the event of serious breach by
the Contracting Authority or other Regulatory Agency of its obligations in
connection with the Concession Contract; (b)
if the
conditions for a
revision of the
Concession contract under sub-section (1) of section 50 of this
Act, are met, but the parties have failed to agree on a revision of the
Concession Contract; or (c)
if the cost of the
Concessionaire’s performance of the Concession Contract has substantially
increased or the value that the Concessionaire receives for such performance
has substantially diminished as a result of acts or omissions of the
Contracting Authority or other public authorities, for instance, pursuant to
clauses (h) and (i) of section 38 of this Act, and the parties have failed to
agree on a revision of the Concession Contract. (2) Before invoking termination under
sub-section (1), the Concessionaire shall approach the PPP Unit in review proceedings,
as envisaged under section 37 of this Act. 56. Termination
of the Concession Contract by either party.— Either party
shall have the right to terminate the Concession Contract in the event that the
performance of its obligations is rendered impossible by circumstances beyond
either party’s reasonable control. The parties
shall also have the
right to terminate the Concession
Contract by mutual consent. 57.
Compensation upon termination of
the Concession Contract.— The Concession Contract shall stipulate
how compensation due to either party is calculated in the event of termination
of the Concession Contract, providing, where appropriate, for compensation for
the fair value of works performed under the Concession Contract, costs incurred
or losses sustained by either party. 58. Wind-up and transfer measures.—(1) Upon completion of the duration of Concession Contract, the
infrastructure Project shall vest free of all encumbrances, in the Contracting
Authority. (2) Without
prejudice to the foregoing, the Concession
Contract shall provide, as appropriate, for: (a)
mechanisms and procedures for the
transfer of assets to the Contracting Authority; (b)
the compensation to which the Concessionaire may be entitled
in respect of assets transferred during the currency of the Concession,
to the Contracting Authority or to a new Concessionaire or purchased by the Contracting Authority; (c)
the transfer of technology required for the operation of the facility; (d)
the training of the Contracting
Authority’s personnel or of a successor Concessionaire in the operation and maintenance of the facility; and (e)
the provision, by the
Concessionaire, of continuing support services and resources, including the
supply of spare parts, if required, for a reasonable period after the transfer
of the facility to the Contracting Authority or to a successor Concessionaire. CHAPTER
- X SETTLEMENT OF DISPUTES 59. Disputes between the Contracting
Authority and the Concessionaire.—(1) If a dispute arises out of or relates to the Concession
Contract, or the breach thereof,
and if that dispute cannot be settled through direct
discussions, the parties shall first endeavor to settle the dispute in an amicable manner by mediation administered
by an independent and impartial person
appointed
by the Committee, before resorting
to
arbitration.
Thereafter, any unresolved controversy or claim arising
out of or relating to the Concession Contract, or breach thereof, shall be settled by arbitration in the city of Peshawar or any other place in Pakistan or as agreed to by the parties specified in
the
Concession Contract. Judgment
upon the award rendered by the arbitrators
may be entered in any court having
jurisdiction thereof. (2) Notwithstanding anything contained in
section 39 of this Act, the applicable law for determination of disputes
shall be decided by the terms of the Concession Contract,
in so far as it is not in repugnance to the laws of Pakistan. 60.
Disputes involving customers or
users of the infrastructure facility.— Subject to
overall control and supervision of the Committee and the concerned Regulatory
Agency, where
the Concessionaire provides services to the public or operates infrastructure
facilities accessible to the public, the Contracting Authority may require the
Concessionaire to establish
simplified and efficient
mechanisms for handling claims submitted by its customers or users of the
infrastructure facility. 61.
Other disputes.—(1) The Concessionaire
and its shareholders shall be free to choose the appropriate mechanisms for settling disputes
among themselves. (2) The
Concessionaire shall be free to agree on the appropriate mechanisms for
settling disputes between itself and its lenders, contractors, suppliers and other business partners. CHAPTER
- XI INCIDENTAL
PROVISION 62.
Viability Gap Fund.–The Government may establish a Viability Gap Fund to support Public-Private Partnership
Projects and finance the gap between Project
revenues constrained by affordability
considerations and revenues
needed to generate
a fair return on investment for the Public-
Private Partnership Projects. 63.
User fee.--(1) Government may impose and revise, through a notification in the official Gazette, single or multiple
user fees for different uses
of the infrastructure Projects
undertaken in public-private partnership mode
by different classes of the users. (2)
Government may exempt, through notification in the official
Gazette, certain classes
of users from payment of the user fees. (3) Government
may entrust
the Concessionaire with collection of user fees. (4) Government shall set the
user fees at levels that
ensure the financial viability
of the Project and fully cover the operations and maintenance expenses, plus a fair return to
the Concessionaire. Notwithstanding the foregoing, if the Government elects to maintain
the user fees at levels below
that would ensure financial viability as described herein, then it shall compensate the
Concessionaire for the difference through the Viability Gap Fund. 64.
Reports and audits.-The Contracting Authority shall include appropriate reporting
and audit requirements
in the Concession Contracts, taking into consideration the nature of the Project, its business structure, the source
of financing and the financial commitments
of Government to the Concessionaire. To the extent required, the Contracting Authority may retain outside consultants and auditors to perform periodic reviews of the
Concessionaire’s accounts which may include the same reports submitted by the Concessionaire to its
lenders. 65. Public disclosure.–(1)
Subject to the confidentiality provision contained in section 34 of this Act, a
Concession Contract or any other ancillary or additional agreement shall be a
public document. (2) The Contracting Authority shall make
arrangements for inspection or copying a Concession Contract or any other
ancillary or additional agreement subject to the payment of the prescribed fee. (3) Any person may, subject to the payment
of prescribed fee and any other reasonable restriction, inspect or obtain
copies of a Concession Contract or any other ancillary or additional agreement. 66. Prescribing
and enforcing standards.– Government, in consultation with the
Committee may– (a)
prescribe and enforce performance
standards for a Project including standards of performance of the
Concessionaire in regard to the services to be rendered by it to the consumers; (b)
prescribe
quality standards including standards of materials, equipments and other
resources or processes relevant to infrastructure Projects including planning
criteria, construction practices and standards of such facilities, operating
standards and maintenance schedules for regulating the working of the
Concessionaire to ensure efficiency and adherence to the prescribed quality
standards; (c)
prescribe the mode of
output-based contracting, performance-based payment systems and output-based
procurement procedures; (d)
establish a uniform system of
accounts to be followed by the Concessionaires; (e)
take steps to promote effective
competition and efficiency in Projects using the Public Private Partnership
approach; (f)
prescribe the mode of conducting
public hearing and consultation with stakeholders; and (g)
prescribe any other standard for
regulating the infrastructure development through Public Private Partnership. 67. Indemnity
by the Concessionaire.–The Concessionaire shall indemnify Government and
the relevant Contracting Authority against any defect in design, construction,
maintenance or operation of the Project and undertake to reimburse all costs,
charges, expenses, losses and damages suffered by Government, Contracting
Authority or an end user due to any such defect. 68. Recovery
of costs, dues and fees.–(1) Regulatory Agency may recover a sum due from
the Concessionaire, as ascertained through the dispute resolution under this
Act, as if the same is recoverable as arrears of land revenue under the West
Pakistan Land Revenue Act, 1967 (West Pakistan Act No. XVII of 1967). (2) Regulatory Agency shall designate an
officer as collector to exercise the powers of collector under the West
Pakistan Land-Revenue Act 1967 (West Pakistan Act No. XVII of 1967). 69. Protection of action
taken in good faith.– No suit, claim or other legal proceedings shall lie against the
Committee or the PPP Unit, a Contracting authority or a representative of the
Committee or the Contracting Authority in respect of anything done or intended
to be done in good faith under this Act or the rules or regulations made
thereunder. 70. Overriding effect.---The provisions of this Act shall have
effect notwithstanding anything contained in any other law for the time being
in force. 71.
Power to make rules.– Government may, make rules for
carrying out the purposes of this Act. 72. Power to frame regulations and guidelines.– Subject to this Act and the rules made hereunder, the Committee may approve regulations, procedures and guidelines to make operations under
this Act,
efficient, transparent and effective. [16][Deleted]
[1]Substituted vide
Khyber Pakhtunkhwa Act No. XI of 2017 [2]Deleted vide
Khyber Pakhtunkhwa Act No. XXVI of 2016 [3]Substituted vide
Khyber Pakhtunkhwa Act No. XI of 2017 [4]Deleted vide
Khyber Pakhtunkhwa Act No. XXVI of 2016 [5]Deleted vide
Khyber Pakhtunkhwa Act No. XXVI of 2016 [6]Replaced vide
Khyber Pakhtunkhwa Act No. XXVI of 2016 [7]Added vide Khyber
Pakhtunkhwa Act No. XXVI of 2016 [8]Deleted vide
Khyber Pakhtunkhwa Act No. XXVI of 2016 [9]Substituted vide
Khyber Pakhtunkhwa Act No. XXVI of 2016 [10]Added vide Khyber
Pakhtunkhwa Act No. XXVI of 2016 [11]Substituted vide
Khyber Pakhtunkhwa Act No. XXVI of 2016 [12]Inserted vide
Khyber Pakhtunkhwa Act No. XI of 2017 [13]Substituted vide
Khyber Pakhtunkhwa Act No. XXIX of 2017 [14]Substituted vide
Khyber Pakhtunkhwa Act No. XXIX of 2017 [15]Substituted vide
Khyber Pakhtunkhwa Act No. XXIX of 2017 [16]Deleted vide
Khyber Pakhtunkhwa Act No. XXVI of 2016 |