Important Articles and Clauses in

Model Concession Agreement

(Hybrid Annuity Mode)
Article 4: Conditions Precedent
 List of Articles
Article Article Number
Definitions & Interpretations 1
Scope of the Project 2
Grant of Concession 3
Conditions Precedent 4
Obligations of Concessionaire 5
Obligations of Authority 6
Representations & Warranties 7
Disclaimer 8
Performance Security 9
Right of Way 10
 List of Articles
Article Article Number
Utilities, Associated Roads and Trees 11
Construction of the Project 12
Monitoring of Construction 13
Completion Certificate 14
Entry into Commercial Service 15
Change of Scope 16
Operation & Maintenance 17
Safety Requirements 18
Monitoring of Operations & Maintenance 19
Regulation & Management 20
 List of Articles
Article Article Number
Independent Engineer 21
Financial Close 22
Payment of Bid Project Cost 23
Escrow Account 25
Insurance 26
Accounts & Audit 27
Force Majeure & Termination 28
Compensation for Breach of Agreement 29
Suspension of Concessionaire’s Rights 30
Termination 31
 List of Articles
Article Article Number
Divestment of Rights & Interest 32
Defects Liability after Termination 33
Assignment & Charges 34
Change in Law 35
Liability & Indemnity 36
Rights & Title over Site 37
Dispute Resolution 38
Disclosure 39
Redressal of Public Grievances 40
Miscellaneous 41
Definitions 42
 Article 4: Conditions Precedent
All the rights & obligations of parties are subject
to full satisfaction of conditions precedent.
Activation of Article 4: Entering into agreement is
the basic condition.
However, Concessionaire after providing
performance security (within 30 days from date of
agreement), shall formally by notice require the
authority to satisfy the conditions precedent
within a period of 120 days thereafter.
 Article 4: Conditions Precedent
Conditions precedent to be satisfied by the Authority
(All conditions to be met for full satisfaction):
1. Procured for concessionaire the right of way to
the Site in accordance with provisions of Cl.
10.3.1 and Cl. 10.3.2.
2. Procured all applicable permits relating to
environment protection, and conservation in
respect land forming part of right of way under
Cl. 10.3.1 and Cl. 10.3.2.
 Article 4: Conditions Precedent
Conditions precedent to be satisfied by the Authority (All
conditions to be met for full satisfaction):
3. Procured forest clearance for and in respect land
forming part of ROW under cl. 10.3.1 and cl. 10.3.2
except permission for cutting trees.
4. Procured approval of GAD for Road Over Bridges /
Under Bridges at level crossings on the project.
(Additional time of 90 days beyond 150 days of entering
into agreement is provided to authority without being
liable for payment of any damages.)
 Article 4: Conditions Precedent
Conditions precedent to be satisfied by the concessionaire
within 150 days of entering into agreement (All conditions
to be met for full satisfaction):
1. Provided performance security to Authority within 30
days of signing of this agreement.
2. Executed & procured execution of Escrow Agreement.
3. Executed & procured execution of the Substitution
Agreement.
4. Procured all the applicable permits specified in Part – I
of Schedule E unconditionally or subject to conditions
 Article 4: Conditions Precedent
Conditions precedent to be satisfied by the concessionaire
within 150 days of entering into agreement (All conditions to
be met for full satisfaction):
5. Executed the financing agreements and delivered to the
authority 3 true copies thereof, duly attested by a Director of
Concessionaire.
6. Delivered 3 true copies of the financial package and
financial model acceptable to the senior lenders.
7. Delivered to authority, confirmation of correctness of the
representations and warranties set in clause 7 of the
agreement.
 Damages for Delay by the Authority

Activation of this clause: 1. The authority doesn’t

procure fulfillment of any or all of the conditions
precedent 2. The delay has not occurred due to
breach of agreement by concessionaire or due to
force majeure.
Payment for damages: Authority should pay to
concessionaire 0.2% of performance security for
each day delay, subject to maximum limit equal
to amount of bid security
 Damages for Delay by Concessionaire

Activation of this clause: 1. The concessionaire

doesn’t procure fulfillment of any or all of the
conditions precedent 2. The delay has not
occurred due to breach of agreement by
concessionaire or due to force majeure.
Payment for damages: Concessionaire should
pay to authority 0.3% of performance security
for each day delay, subject to maximum limit
equal to amount of bid security.
 Conditions on Payment for Damages

• Payment for damages by the authority can not

be made untill and unless concessionaire has
satisfied its conditions precedent.
• Similarly, payment for damages by the
concessionaire can not be made untill and
unless authority has satisfied its conditions
precedent.
 Commencement of Concession Period
• The date on which financial close is achieved and
conditions precedent are satisfied by both parties
shall be the appointed date and which marks the
commencement of concession period.
• Formally and to avoid the doubt, concessionaire,
upon occurrence of appointed date, by notice
convey particulars to the authority and begin
construction of the project.
 Deemed Termination
• In case, the appointed date does not occur before 1 st anniversary
of the date of this agreement or extended period provided in
accordance with the agreement –
• All rights, privileges, claims and entitlements arising out of the
agreement shall be deemed to have been waived by, and to have
ceased with concurrence of concessionaire and the concession
agreement shall be deemed to have been terminated by mutual
agreement of the parties.
• If non occurrence of the appointed date is for the reasons
attributable to the concessionaire, the performance security and
additional performance security shall be en cashed considering
the payment for damages to the authority.