Public-private Partnership Bill, 2009

8/14/2019 Public-private Partnership Bill, 2009

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THE PUBLIC-PRIVATE PARTNERSHIPBILL, 2009

M E M O R A N D U M

The ob jects of this Bill are topromote and facilitate the implementation of privatelyfinanced infrastructure projects and effective delivery

of social services by enhancing transparency, fairnessand long term sustainability and rem oving undesirablerestrictions on private sector participation in the provisionof social sector services and the development andoperation of public infrastructure;

establish a Public Private Partnership Unit and providefor its functions;

establish the Public-Private Partnership Council andprovide for its functions;

provide for public-private partnerships for the con structionand operation of new infrastructure facilities andsystems, the maintenanc e, rehabilitation, modernisation,expansion and operation of existing infrastructurefacilities and systems and the provision of social sectorservices;

(e ) develop general principles of transparency, economy andfairness in the award of contracts by public authoritiesthrough the establishment of spec ific procedures for theaward of infrastructure projects and facilities andprovision of social sector services a nd rules governingpublic private inception, procurement, contracting andmanagement of public-private partnerships;

(f)provide for the implementation of public private partnershipagreements between contracting authorities andconcessionaires; and

(g) provide for matters connected with or incidental to theforegoing.

M. MAI,11,A,Attorney-General

N.A.B. 13, 200916th June, 2008


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2No. of 2009ublic-Private PartnershipTHE PUBLIC PRIVATE PARTNERSHIP BILL, 2009A RRANGEMENT OF S ECTIONS

SectionPART I

P RELIMINARYShort title and commence mentApplicationInterpretation

PART I IT HE P UBLIC P RIVATE P ARTNERSHIP U NIT

Establishment of Public-Private Partnership UnitFunctions of U nitEstablishment of Public -Private Partnership CouncilFunctions of CouncilComposition of CouncilSecretary to CouncilConstitution of P ublic-Private Pa rtnership T echnicalCommitteeFunctions of Technical CommitteeProceedings of Technical CommitteeDisclosure of interestConciliation, mediation and arbitrationA ppointment of mediator or arbitratorDirector, Deputy Director and other public officers

PA RT I IIP ROJECT I DENTIFICATION A ND F EASIBILITY S TU DY

Participation in projectProject identification and fea sibility studyA pproval by Council

PART IVC OMPETITIVE S EI,ECTION PROCESS A WAR D P ROCEEDINGS

Procurement procedurePre selection proceedingsRequest for expression of interest

N . A . B. 13, 2009


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Public-Private PartnershipNo. of 2009 3Pre selection criteriaParticipation of consortiaEvaluation of pre selection bidsApproval of UnitSingle stage and two stage procedures for requestingtechnical proposalsContent of request for technical proposalsBid S ecuritiesClarifications and modificationsEvaluation criteriaEvaluation of technical proposalFurther demonstration of fulfillment of qualification criteriaFinal negotiationsCircumstances authorizing award without com petitiveproceduresProcedures for negotiation of agreementConfidentialityNotice of contract awardRecord of selection and award proceedingsReview proceduresOrganisation of conc essionaireU nsolicited proposal

PART VP U B L I C P R I V A T E P A R T N E R S H I P A G R E E M E N T S

Contents and implementation of agreementGoverning lawOwnership of assetsAcquisition of rights related to project siteEasementsFinancial arrangementsSecurity interestsA ssignment of agreementTransfer of controlling interest in co ncessionaireOperation o f infrastructure facilityCom pensation for specific changes in legislationRevision of agreementTakeover of projectSubstitution of concessionaire

57. Duration and extension of agreementN.A.B. 13, 2009


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4 [No. of 2009ublic-Private PartnershipTermination of agreement by contracting authorityTermination of agreement by co ncessionaireTermination of agreement by either partyCompensation upon termination of agreementManagem ent of public private partnershipsW inding up and transfer measures

PART VIS E T T L E M E N T O F D I S P U T E S A N D G E N E R A L P R O V I S I O N S

Disputes between contracting authority or concessionaireand concessionaireDisputes involving customers or usersRegulationsSavings

S C H E D U L E

N.A.B. 13, 2009


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Public-Private PartnershipNo. of 2009 5A BILL

E N " I I F L E DAn Act to promote and facilitate the implementation ofprivately financed infrastructure projects and effectivedelivery of social services by enhancing transparency,fairness and long term sustainability and removingundesirable restrictions on private sector participation inthe provision of social sector services and the developmentand operation of public infrastructure; establish a PublicPrivate Partnership Unit and provide for its functions;establish the Public-Private Partnership Council and

provide for its functions; provide for public-privatepartnerships for the construction and operation of newinfrastructure facilities and systems and the maintenance,rehabilitation, modernisation, expansion and operation ofexisting infrastructure facilities and systems and theprovision of social sector services; develop generalprinciples of transparency, economy and fairness in theaward of contracts by public authorities through theestablishment of specific procedures for the award ofinfrastructure projects and facilities and provision of socialsector services and rules governing public privateinception, procurement, contracting and management ofpublic-private partnerships; provide for theimplementation of public private partnership agreementsbetween contracting authorities and concessionaires; andprovide for matters connected with or incidental to theforegoing.ENACTED by the Parliament of Zambia.nactment

PART IP RELIMINARY

1. This Act may be cited as the Public Private Partnership Act,hort title2009, and shall come into operation on such date as the Ministerndmay, by statutory instrument, appoint.ommencementN.A.B. 13, 2009


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6 [No. of 2009ub lic-Private Partnership2.his Act applies to infrastructure projects and facilities,and the provision of social sector services as may be prescribed bythe Minister, implemented through the Public Private Partnership

Unit, but does not apply to the following infrastructure projects orinfrastructure fa cilities:projects which are undertaken by any joint venturebetween any statutory body, Government Ministry ordepartment, statutory body or local authority;projects between any statutory body and any GovernmentMinistry or department;0projects which may be taken o ver by any concessionaireor private sector entity on privatisation or dis investment

by any Government Ministry, department, statutory body,State co rporation, local authority or agency; orprojects which have been expressly excluded from the 15

provisions of this Act or which are not prescribed bythe Minister.Interpretation. In this Act, unless the context otherwise requires"affordable" in relation to an agreement, means a contractualarrangement where a contracting authority is able to m eet 20

any financial commitment likely to be incurred under theagreement from its existing or future budgetary funds;"agreement" means a public private partnership agreemententered into in accordance with this Act which mayincorporate any approvals, licences, permits and 25authorisations nece ssary for its implementation; -"asset" includes an existing asset of a relevant contractingauthority or a new asset to be acquired for the purposes ofentering into an agreement;"bid" means a tender, an offer, a proposal or price quotation,given in response to an invitation to participate in an 30infrastructure facility or infrastructure project;"bidder" means any person, including a group of persons, thatparticipates in selection proceedings relating to a project;"bidding documents" means the tender solicitation documentsor other documents for solicitation of bids, on the basis of 35which bidders are to prepare their bids;"bidding consortium" means a situation where a proposal foran infrastructure project or infrastructure facility is madeby more than one person, and "bidding consortia" shall beconstrued accordingly;0"concessionaire" means a person from the private sector whoundertakes an infrastructure project or infrastructure facilityor the provision of any social sector services under a publicprivate partnership agreement, other than a contractingauthority;5

N.A.B. 13, 2009

Application


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Public-Private PartnershipNo.f 2009"contracting authority" means the public authority that hasthe power to enter into an agreement for the implementationof an infrastructure project or infrastructure facilityrthe provision of any social sector services under any law,5 and includes any M inistry, Government department, localauthority or statutory body;"contingent liability" includes Government's guarantee forloan and foreign currency transfer and step in function inthe event of default by the relevant co ntracting authority;

1 0 "Council" means the Public-Private Partnership Councilestablished under section six, ."generic risks" means any circumstances that have the

potential to adversely affect the development of, orinterests of the parties to, an infrastructure project or1 5 infrastructure facility or the provision of any social sector

services or the interest of a contracting authority, in thenature of construction period risk, operation period risk,market and revenue risk, finance risk, legal risk andmiscellaneous risk, as prescribed by the M inister;

20 "infrastructure facility" means any physical facility andsystems that directly or indirectly provide services to thegeneral public;

"infrastructure project" means the design, construction,development and operation of any new infrastructure

25 facility or the rehabilitation, mo dernisation, expansion oroperation of any existing infrastructure facility;"local authority" has the meaning assigned to it under theLocal Government Act; Cap. 281

"material default" means any failure of a concessionaire to30 perform any duty under a public private agreement w hichaffects or will affect the delivery of service to the public,and remains unsatisfied after a reasonable period of timeand after the concessionaire has received written noticeof the failure from the U nit;

35 "National Council for Construction" means the Councilestablished under the National Council for ConstructionA ct, 2003;

"preferred bidder" means a bidder, including any biddingconsortium, selected as a successful bidder during the

A ct No. 13of 2003

40 competitive selection process;"project" means an infrastructure project,an infrastructure

facility, or the provision of any social sector service, asthe case may be;

N.A.B. 13, 2009


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8 [No. of 2009ublic-Private PartnershipN.A.B. 13, 2009

"public private partnership" means investment through privatesector participation in an infrastructure project orinfrastructure fac ility;

"public private partnership agreement" m eans a contractualarrangement between a contracting authority and a 5concessionaire, made in accordance with this Act, in whichthe conce ssionaire

undertakes to perform or undertake anyinfrastructure project or infrastructure facility asspecified in the First Schedule or as prescribed;0undertakes to provide or provides such social sectorservices as may be prescribed;assumes substantial financial, technical andoperational risks in connection with theperformance of the institutional function or use of5State property; and

receives consideration for performing a publicfunction or utilising State property, either by wayof

a fee from any revenue fund or a Ministry's0budgetary funds;user levies collected by the c oncessionairefrom users or customers for a serviceprovided by it; or

(iii) a combination of the consideration paidunder5sub paragraph (i) and (ii);"regulatory agency " means a pu blic authority that is entrusted

with the power to issue and enforce the laws governinginfrastructure developm ent or the provision of services;"Technical Committee" means the Public Private Partnership0

Technical Co mm ittee established under section t en;"U nit" means the Public-Private Partnership U nit established

under section four;"unsolicited proposal" means any proposal relating to theimplementation of an infrastructure project or infrastructure5facility that is not submitted in response to a request orsolicitation issued by the Unit or a contracting authoritywithin the context of a com petitive selection procedure;"user levy" means the right or authority granted to a

concessionaire by the contracting authority to recover0investment and a fair return on investment and includes


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10 [No. of 2009ublic-Private Partnershipis affordable to a contracting authority;provides value for money; and

(iii) presents optimum transfer of technical,operational and financial risks to theconcessionaire;examine the request for proposals to ensure conform ity

with the approved feasibility study and as may beprescribed;

monitor the competitive selection process and provide forreview of the process if so required, under this A ct;0(i) monitor progress of implementation of public private

partnerships;(i)facilitate the internal and external auditing of projects andprepare a road ma p for project development;(k ) in liaison with the Zam bia Development A gency, facilitate5and market investme nt in public private partnerships;(/) identify inter sectoral linkages and facilitate approvals from

the Ministry responsible for finance required unde r thisAct;approve terms of reference for consultancy assignments 20

for a project and the consultant selection process forsuch assignment in liaison with the Technical Committee;

determine financial support and approve the allocation ofcontingent liability for any pro ject, as prescribed by theMinister;5

monitor issues pertaining to user levies and recomm endto the C ouncil, in liaison with the appropriate regu latoryagency, mechanisms and procedures for setting, revisingand collecting user levies and the settleme nt of disputesrelating to user levies, notwithstanding any other law to 30the contrary;

train, and provide advisory services to, project officers;and

(q) promote public private partnership awareness andadvocacy in Zambia.5The Unit shall be responsible for ensuring the properimplementation, management, enforcement and monitoring of any

agreement and the reporting by aconcessionaire on an agreement.The Unit shall exercise and perform such other powersand functions as are conferred or imposed on it by, or under, this 40

A ct or any other written law.N.A.B. 13, 2009


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Public-Private PartnershipNo. of 2009 11(1 )here is hereby established the Public-PrivatestablishmentPartnership Co uncil.f Public-

(2)he provisions of the Second Schedule apply to the C ouncil.rivatePartnershipCouncil(1) The functions of the Council are tounctions of

5a) formulate policies relating to public-private partnershipsouncilfor purposes of this A ct;approve projects for purposes of this A ct;approve the preliminary award of agreements under thisAct ;1 0d) ensure competition, transparency, fairness and equity inthe selection process under this Act;

make recommendations to the contracting authority ongeneric risk sharing principles for any project andthegrounds for entering into negotiations with a preferred

1 5idder;give directions to any contractingauthority, regulatoryagency or concessionaire regarding the implementationof any project and the contracting authority, regulatoryagency or concessionaire shall comply w ith the directive,20otwithstanding any law to the contrary;

set time limits for the clearance of any project and reviewthe time limits periodically;

resolve issues relating to the project approval process;and25i) refer any bid received by it to an appropriate contracting

authority for examination and eva luation;(2 )he Council shall approve or reject a project or award ofan agreement before it within twenty one days of receiving arecommendation on it from the Technical Comm ittee.303)he Co uncil shall, in the performanc e of its functions underthis A ct, take into consideration the recommendation of the TechnicalCommittee.(4 )n the discharge of its functions under this A ct, the Councilmay-35a) comm ission any study relevant to the determination of theaward of any agreement;(b) request any contracting authority, regulatory agency,

concessionaire or any other body or person to furnishthe Council with information, details, documents and

40articulars required in connection w ith or relating to anyproject;N.A.B. 13, 2009


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12 INo. of 2009ublic-Private PartnershipCompositionof Council

request any professional or technical assistance fromany appropriate body or person in Zambia or elsewhere ;andinspect, visit, review and monitor any project and itsimplementation, execution, operation and managem ent. 5

(5) The Council may (a) request the chairperson, supervising officer or chief

executive officer of a contracting authority toroduce any records or other document relating to

a project; and0answer all relevant questions, on a project asrequested by the Council; and

(b ) examine any record or other document submitted underparagraph (a) and take copies or extracts from them.

(6) Any person to whom a request is made under subsection5(5) whofails to comply with the request; orrefuses to answer or gives any false or misleading answerto any question lawfully put by the C ouncil; commits an

offence and is liable upon conviction, to a fine not 20exceeding five hundred thousand penalty units or toimprisonment for a term not exc eeding five years, or toboth.

Where the Council makes recommendations underparagraph (e) of subsection (1), any change in the terms of the 25agreement shall be submitted by the contracting authority to theCo uncil for final approval before the signing of the agreeme nt.

The Council may delegate any of its functions to theTechnical Committee.

8. The Council shall consist of the following part-time0members:

the Minister responsible for finance, who shallbe the Ch airperson;four Ministers appointed by the President, one

of whom shall be designated the Vice- 35Chairperson;

(c ) not more than four other persons who shall beappointed by the President on suchconditions as the President maydetermine.0

N.A.B. 13, 2009


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Public-Private PartnershipNo. of 2009 139.1)he Permanent Secretary in the Ministryresponsible for finance shall be the S ecretary to the C ouncil.(2 )he Secre tary shall be responsible for the day to day affairs

of the C ouncil under the general supervision of the C hairperson.50.1) There is hereby constituted the Public-PrivatePartnership Technical Committee, which shall consist of thefollowing part-time members appointed by the Minister:the Secretary to the Treasury, as Chairperson;a representative of the Attorney-Gene ral;1 0c ) the Permanent Secretary of the Ministry responsible forworks and supply;the Permanent Secretary of the Ministry responsible forindustry;the Permanent Secretary of the Ministry responsible for

1 5and;(f)the Permanent Secretary of the Ministry responsible forlocal government;

a representative of the Engineering Institution of Zambia;a representative of the National Council for Construction;

20i) a representative of the Environmental Council of Zam bia;(j)a representative of the Zambia Public ProcurementAuthority;(k ) a representative of the Econom ic A ssociation of Zamb ia,nominated by that A ssociation; and

251 ) two persons appointed by the M inister.The Minister shall appoint the Vice-Chairperson from

among the mem bers.Subject to subsection (4), the mem bers of the TechnicalCommittee referred to in paragraphs (g) to (1) of subsection (1)

30 shall hold office for a period of three years from the date ofappointment and are eligible for appointment for a further term ofthree years.(4 )he office of a member becomes vacant

if the mem ber is absent, without reasonable excuse, from35hree consecutive meetings of the Technical Com mitteeof which the member has had notice;

upon the member's death;if the memb er is adjudged bankrupt;if the member ceases to hold the office by virtue of which

40he m ember was appointed; Secretary toCouncilConstitutionof Public-PrivatePartnershipTechnicalCommitteeN.A.B. 13, 2009


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14 [No. of 2009ublic-Private PartnershipFunctions ofTechnicalCommittee

Proceedingsof TechnicalCommittee

if the member be comes m entally or physically incapableof performing the duties of a m ember;if the member is removed by the M inister;if the member is convicted of an offence involvingdishonesty or fraud under this Act o r any other law;

upon the expiry of one month's notice of themem ber's intention to resign from office, given by themember to the Minister.

A mem ber may resign from office by giving one month'snotice in writing to the Minister.

Where a vacancy occurs in terms ofsubsection (4 ), the Minister shall appoint another person to replacethe mem ber who vacates office, but that person shall hold officefor the remainder of the outgoing memb er's term.(7 )memb er of the Technical Comm ittee shall be paid suchallowances as the Minister may determine.11. (1) The Technical Committee shall advisethe Council

and the Unit on all technical matters relating to public-privatepartnerships and projects under this A ct.

(2 )otwithstanding the generality of subsection (1), theTechnical Comm ittee shallrecommend to the C ouncil the award of agreements underthis Act;evaluate and select projects for award for recommen dationto the Council;(c ) recomm end the approval of projects under this A ct; and(d ) perform such other functions provided for under this Act, or asmay be assigned by the Council.

12. (1) Subject to the other provisions of thisA ct, the TechnicalCom mittee may regulate its own procedure.The Technical Committee shall meet for the transaction

of business at least once in every three months a t such places andat such times as the Chairperson may determ ine.Upon giving notice of not less than fourteen days, a

meeting of the Technical Committee may be called by theChairperson and shall be called if not less than five members sorequest in w riting:

Provided that if the urgency of any particular matter doesnot permit the giving of such notice, a special meeting may becalled upon giving a shorter notice.

N.A.B. 13, 2009


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Public-Private PartnershipNo. of 2009 15Six members shall form a quorum at any meeting of theTechnical Committee.There shall preside at any mee ting of the

Technical Committee-5a) the Chairperson;

in the absence of the C hairperson, the Vice-C hairperson;and

in the absence of both the Chairperson and the Vice-Chairperson, such member as the members present may1 0lect from among themselves for purposes of themeeting.(6) The determination of any matter before the Technical

Committee shall be according to the votes of the majority of themem bers present and considering the matter.1 57) The Technical Committee may invite any person whosepresence is in its opinion desirable to attend and to participate inthe deliberations of a meeting of the Technical Committee but suchperson shall have no vote.

(8) The Technical Committee shall cause minutes to be kept20 of the proceedings of every meeting of the Technical Com mittee.13. (1) A person present at a meeting of the Technical

Com mittee at which any m atter is the subject of consideration andin which m atter that person is directly or indirectly interested shall,as soon as is practicable after the commence ment of the me eting,25 disclose the interest and shall not, unless the Technical Com mitteeotherwise directs, take part in any c onsideration or discussion of orvote on, any question touching that m atter.

(2) A disclosure of interest made under subsection (1) shall benoted in the minutes of the m eeting at which it is made.304. (1) There shall be a Director for the Unit who shall be apublic officer appointed by the Public Service C omm ission.The D irector shall, subject to the general orspecific directions of the Co uncila) be responsible for the administration of the U nit;35b) be an ex-officio member of the Technical Committee;

and(c ) exercise the functions conferred upon the Director by orunder this A ct.

The Public Service C omm ission shall appoint such other40 officers as are necessary for purposes of this Act.

Disclosure ofinterest

Director andother publicofficers

N.A.B. 13, 2009


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16 [No. of 2009ublic-Private PartnershipConciliation,mediationandarbitrationAppointmentof mediatoror arbitratorA ct No. 19 of2000

Participationin project

Projectidentifica-tionandfeasibilitystudy

Approvalby Council

Notwithstanding section sixty four, the Council may actas mediator, conciliator or arbiter with regard to any dispute, arisingunder this Act or an agreement, between a contracting authorityand a concessionaire at the request of the parties.

Notwithstanding section fifteen, the Council may appoint 5a suitable person to act as mediator or arbitrator for the settleme ntof disputes on its behalf, in accordance with this Act or theA rbitration A ct, and any action or decision of a person so appointedshall be deemed to be an action or a decision of the C ouncil.

PA RT III0P R O J E C T I D E N T I F IC A T I O N A N D F E A S I B I L IT Y S T U D Y

Any person in the private sector may participate in thefinancing, construction, rehabilitation, maintenance, operation andmanagem ent of any projects as enumerated in the First Sche duleor as prescribed, notwithstanding any other law to the contrary.5The M inister may, by statutory instrument, make regulationsto provide forthe identification, evaluation, operation and managementof projects under this Act;the undertaking of feasibility studies for purposes of this 20

Act;the implementation and m onitoring of projects under anagreement; andany other m atter to ensure that agreements provide value

for money and afford the optimum transfer of 25appropriate technical, operational or financial risk toconcessionaires.

19. (1) S ubject to subsection (5) , a contracting authority shall,after undertaking a feasibility study and in accordance with theadvice of the Unit, submit a project proposal together with the 30proposed agreement to the Technical Com mittee for evaluation.

(2) The Tec hnical Comm ittee shall consider the project proposaland the proposed agreement submitted under subsection (1) andsubmit the feasibility study, the project proposal and the pro posedagreement to the C ouncil which shall5

accept the project proposal and agreement with or withoutamendm ents, within the prescribed time;return the project proposal and agreement to thecontracting authority for re-consideration and resubmission for approval, within the prescribed time; or 4 0

N.A.B. 13, 2009


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Public-Private PartnershipNo. of 2009 17(c ) reject the project proposal and agreement, within theprescribed time.

(3) If at any time, after the Council has approved a feasibilitystudy for a project, any assumption in the feasibility study is5materially revised, including any assumption concerning affordability,value for mone y and substantial technical, operational and financialrisk transfer, the contracting authority shall immediately

provide the Technical Committee with details of theintended revision including a statement regarding the

1 0urpose and impact of the intended revision on theaffordability, value for money and risk transfer evaluationcontained in the feasibility study; and

ensure that the Technical Committee is provided with arevised feasibility study for submission to the Cou ncil1 5or consideration in accordance with subsection (2).PART IV

C OMPETITIVE S ELECTION P ROCESS A ND A WARD P ROCEEDINGS20. (1) The procurement procedure relating to public privatepartnerships provided for under this A ct shall be as follows:

20a) the procurement system shall be fair, equitable, transparent,competitive and cost effective;the procurement process shall be in accordance with

(i) this A ct or the bidding documents; or25ii) where this Act or the bidding documents do notspecifically provide for a process, commission,omission, offence or penalty in relation to anyaspect of the procurement process relating topublic private partnerships, the Public

30rocurement A ct, 2008, shall apply; andtake into account the Citizens Economic EmpowermentAct, 2006, regarding preferentialreatment forcertain categories of citizens that have been

disadvantaged or marginalised, as defined under that35ct, in accessing and being awarded tenders for theprocurement of goods and services.

21. A contracting authority may engage in pre selectionproceedings with a view to identifying bidders that are suitablyqualified to implement the proposed project.

Procurementprocedure

A ct No. 12 of2008Act No. 9 of2006

Pre selectionproceedings

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18 [No. of 2009ublic-Private PartnershipRequest forexpressionof interest

22. (1) A contracting authority shall prepare a request forsubmission of expressions of interest, after the approval of thefeasibility study.

A contracting authority shall submit the request forsubmission of expressions of interest prepared by it to the Unit forwritten autho risation to advertise, invite, solicit or call for bids forthe purposes of engaging in pre selection proceedings.A contracting authority shall not issue any bidding documentfor a public private partnership to any prospective bidder beforeobtaining the approval of the Unit.The invitation for submission of expressions of interest shall

be published in accordance with regulations issued under it.The invitation to submit expressions of interest forparticipation in the pre selection proceedings shall include at leastthe following:

a description of the infrastructure project or facility;an indication of other essential elements of the project,such as the-

services to be delivered by the concess ionaire; andfinancial arrangements envisaged by thecontracting authority;

where already known, a summary of the main requiredterms of the agreemen t to be entered into;the manner and place for the subm ission of applications

for pre selection and the deadline for the submission,expressed as a specific date and time, allowing sufficienttime for bidders to prepare and subm it their expressionsof interest;(e) the manne r and place for solicitation of the pre selectionbidding documents; and

W an appropriate statement to the effect that the contractingauthority reserves the right to request proposals uponcompletion of the pre selection proce edings only from alimited number of bidders that best meet the pre selectioncriteria.

(6) The pre selection bidding documents shall include at leastthe following information:the pre selection criteria in accordance with section twenty-three;whether the contracting authority intends to waive anylimitation on the pa rticipation of consortia in accorda ncewith section twenty-four;

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Public-Private PartnershipNo. of 2009 19whether the contracting authority intends to request only

a limited number of pre selected bidders to submitproposals upon completion of the pre selectionproceedings and, if applicable, the manner in which this

5election shall be carried out; andwhether the contracting authority intends to require the

preferred bidder to establish an independent legal entityunder any other law in acco rdance with section forty-one .la3. Any person who meets the criteria stated in the pre selection Pre selectionbidding documents shall qualify for the pre selection proceedings criteria

which c riteria shall include the following:adequate professional and technica l qualifications, human

resources and equipment and other physical facilities as1 5ay be necessary to carry out all the phases of theproject; and

appropriate managerial and organisational capability,reliability and exper ience, including previous experiencein operating similar infrastructure fa cilities.

(1) A contracting authority when requesting for submission Participation20of expressions of interest for the pre selection proceedings, may of consortiaallow bidders to form bidding consortia and in such a case the b iddingconsortium shall demonstrate its qualifications, in accordance withsection twen ty- three , relating to the consortium as a whole as w ellas to its individual members.

252) Unless otherwise authorised by a contracting authority inthe pre selection bidding documents, each mem ber of a consortiummay pa rticipate, either directly or indirectly, in only one consortiumat the same time.

(3) W hen considering the qualifications of bidding consortia, a30 contracting authority shall consider the capabilities of each of theconsortium's members and assess whether the combinedqualifications of the consortium's members are adequate to meetthe needs of all phases of the project.

(1) A contracting authority shall evaluate the qualifications Approval of35 of each bidder that has submitted an expression of interest for pre Uni tselection, applying only the criteria that are set forth in the preselection bidding documents and this A ct.

(2) All pre selected bidders shall, after the approval of theU nit, as specified in section twenty-six, be invited by the contracting40 authority to submit proposals in accordance with this A ct.

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20 No. of 2009ublic-Private PartnershipSingle stageand twostageproceduresforrequestingtechnicalproposals

Content ofrequest fortechnicalproposals

26. (1)fter the evaluation of the pre selection bids, thecontracting authority shall submit a report for approval to the U nit,demon strating how the pre selection criteria specified under sectiontwenty-three has been met.(2) The report shall contain the following statements:

that the bids explain the capacity of the concessionairesand their proposed mechanisms and procedures toeffectively implement, manage, enforce, monitor andreport on the proposed infrastructure project and facility;

that a satisfactory due diligence including a legal due0diligence has been completed by the U nit and the selectedconcessionaires in relation to ma tters of their respectivecompetence and capacity are qualified to enter into thepublic private partnership agreement.

27. (1) A contracting authority shall provide a set of the request5for technical proposals and related documents issued in accordancewith section twen ty-e igh t to each pre selected bidder that paysthe price, if any, charged for those bidding documents.

Notwithstanding subsection (1), a contracting authoritymay use a two stage procedure to request for technical proposals 20from pre selected bidders whe n the contracting authority does notconsider it to be feasible to describe the characteristics of the projectin the request for technical proposals.

W here a two stage proced ure is used, the following shallapply:5the initial request for technicalproposals shall call uponthe bidders to submit, in the first stage of the procedure ,

initial proposals relating to project specifications,performance indicators, financing requirements or othercharacteristics of the project as well as the main 30contractual terms proposed by the contracting authorityor U nit;

the contracting authority may convene meetings and holddiscussions with any of the bidders to clarify questionsconcerning the initial request for technical proposals or 35the initial technical proposals and accompanyingdocuments submitted by the bidders which shall berecorded inminutes of the meeting or discussion;

(c) following evaluation of the technical proposals received,the contracting authority may review and , as appropriate, 40revise the initial request for technical proposals byremoving, modifying or adding to any aspect of the initialproject specifications, performance indicators, financingrequirements or other characteristics of the project,

N.A.B. 13, 2009

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Public-Private PartnershipNo. of 2009 21including the m ain contractual terms and any criterionfor evaluating technical proposals and ascertaining thepreferred bidder, as set out in the initial request fortechnical proposals;the contracting authority shall

5ndicate in the record of the selection proceedings, tobe kept pursuant to section thir ty-nine, the justificationfor any revision to the request for technical proposalsand which shall be communicated in the invitation tosubmit final proposals; and at the second stage of the

1 0rocedure, the contractingauthority, shall invite thebidders to subm it final proposals with respect to a singleset of project specifications, performance indicators orcontractual terms in accordance with sections t wen t yeight through to section thirty-four

1 58. To the extent not required by, or under, the PublicProcurement Act, 2008, a request for technical proposals shallinclude the following:(a)eneral information as may be required by the biddersin order to prepare and subm it their proposals;20b)roject specifications and performance indicators, asappropriate, including the contracting authority's orUnit's requirements regarding safety and securitystandards and environmental protection;contractual terms proposed by the contracting authority25r Unit including an indication of which terms areconsidered to be non ne gotiable; and

criteria for evaluating technical proposals, and thethresholds, if any, set by the contracting authority foridentifying non responsive proposals, the relative weight

30o be accorded to each evaluation criterion and themanner in which the criteria and thresholds are to beapplied in the evaluation and rejection of proposals.29. (1) A request for technical proposals shall set out the

requirements with respect to the issue of, and the nature, form,35 amount and other principal terms and conditions of, the requiredbid security.

(2) A bidder shall not forfeit any bid security that it may havebeen required to provide, other than in cases of a

(a)ithdrawal or modification of a technical proposal after40he deadline for submission of proposals and, if sostipulated in the request for technical proposals, beforethat deadline; Content ofrequest fortechnicalproposalsAct No. 12of 2008Bid securities

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22 [No. of 2009ublic-Private Partnershipfailure to enter into final negotiations with the contracting

authority pursuant to subsection (1) of section thirty-four;failure to submit its best and final offer within the timelimit prescribed by the contracting authority pursuant to 5subsection (2) of section thir ty-four;

failure to sign the agreement, if required by the contractingauthority to do so, after the technical proposal has beenaccepted; orfailure to provide the required security for the fulfillment 10

of the agreement after the technical proposal has beenaccepted or to comply with any other condition prior tosigning the agreement, as specified in the request fortechnical proposals.

Clarifications0. (1) A contracting authority may, whether on its own 15andnitiative or as a result of a request for clarification by a bidder,modificationseview and, as appropriate, revise any element of the request fortechnical proposals as set out in section twenty eight .(2) A contracting authority shall indicate in the record of the

selection proceedings to be kept pursuant to section thirty-nine 20the justification for any revision to the request for technical proposalsand which shall be communicated to the bidders, in the same manneras the request for technical proposals, at a reasonable time prior tothe deadline for submission of technical proposals.

Evaluation1. (1) The criteria for evaluating technical proposals shall 25criterianclude the following:technical soundness;compliance with environmental standards under any law;operational fea sibility;quality of services and measure s to ensure their continuity; 30

and(e ) any other prescribed c riteria.

(2) The criteria for evaluating financial and commercialproposals shall include, as appropriate:the present value of proposed user levies, unit prices, 35and other charges over the agreem ent period;

the present value of proposed direct payments by thecontracting authority, if any;(c) the costs for design and construction activities, annualoperation and maintenance costs, present value of capital 40costs and operating and m aintenance costs;

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Public-Private PartnershipNo. of 2009 23the extent of financial support, if any, expected from apublic authority in Zambia;the soundness of the proposed financial arrangements;

(f)the extent of acceptance of the negotiable contractual5ermsproposed b y the contracting authority in the requestfor technical proposals;

the social and economic development potential offeredby the technical proposals; andany other prescribed criteria.

1 02. (1) A contracting authority shall evaluate each technicalvaluationproposal in accordance with thef technicalevaluation criteria, the relative weight accorded to each suchroposalcriterion and the evaluation process set out in the request fortechnical proposals.1 52) For the purposes of subsection (1), a contracting authoritymay estab lish thresholds with respect to quality, technical, financialand comm ercial aspects of the proposal.(3) For the purposes of subsection (2), the lowest evaluatedbid shall not necessarily be the lowest offered price.

203. (1) A contracting authority may require any bidder thaturtherhas been pre selected to demonstrate again its qualifications inemonstrationaccordance with the same criteria used for pre selection.f fulfillmentof(2) Acontracting authority shall disqualify any bidder thatualificationfails to demonstrate aga in its qualifications if requested to do so.riteria254. (1) A contracting authority shall rank all responsiveinalechnical proposals on the basis of the evaluation criteria and invite,egotiationsfor final negotiation of the agreement, the bidder that has attainedthe best rating, except that the final negotiations shall not includethose contractual terms, if any, that were stated as non negotiable3() in the final request for technical proposals.A contracting authority shall, where it becomes apparent

to the contracting authority that the negotiations with the bidderinvited will not result in an agreement, inform the bidder of itsintention to terminate the negotiations and give the bidder reasonable

35 time to formulate its best and final offer.Where a bidder puts forward its best and final offer andthe contracting authority does not find that offer acceptab le, it shall

terminate the negotiations with the bidder concerned.(4) W here a contracting authority terminates negotiations under

40 subsection (3), the contracting authority shall invite the other biddersfornegotiations, in the order of their ranking, until the parties concludean agreement or the contracting party rejects all the remainingproposals.

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24 [No. of 2009ublic-Private PartnershipCircumst-ancesauthorizingawardwithoutcompetitiveprocedures

Procedurefornegotiationof agreement

(5 ) A contracting authority shall not resume negotiations witha bidder with whom negotiations have been terminated in accordancewith this section.

35. A contracting authority may negotiate an agreement, subjectto the approval of the Unit, without using the procedure set out in 5this Part in the following cases:

when there is an urgent nee d for ensuring continuity inthe provision of the service and engaging in theprocedures set out in this Part would be impractical:

Provided that the circumstances giving rise to the 10urgency were neither foreseeable by thecontracting authority nor the result of anydilatory conduct on its part;

where the project is of short duration and the anticipatedinitial investment value does not exceed an amount 15prescribed;

where the project involves national defense or nationalsecurity;

where there is only one source capab le of providing therequired service, such as, when the provision of the 20service requires the use of intellectual property, tradesecrets or other exclusive rights owned or possessedby a certain person or persons;

where an invitation to the pre selection proceedings or arequest for technical proposals has been issued but no 25proposals were su bmitted or all proposals failed to meetthe evaluation criteria set out in the request for proposalsand if, in the opinion of the contracting authority, issuinga new invitation to the pre selection proceedings and anew req uest for technical proposa ls is not likely to result 30in an infrastructure project or facility award within therequired time frame; or

in any other case where the Unit authorises such anexception for com pelling reasons of na tional or publicinterest.536. Where an agreement is negotiated without using the

procedures set out in this Part, a c ontracting authority shall (a) except for an agreement negotiated pursuant to sub

paragraph (c) of section thirty five, cause a notice, ofits intention to commence negotiations in respect of the 4 0agreement, to be published in the prescribed m anner;

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Public-Private PartnershipNo. of 2009 25engage in negotiations with as many persons as thecontracting authority considers capable of carrying outthe project, as circumstances permit; and

establish evaluation criteria against which proposals shall5e evaluated and ranked.

(1) A contracting authority and the Unit shall treatproposals in such a m anner as to avoid the disclosure of their contentto competing bidders and any discussion, communication ornegotiation between the c ontracting authority and a bidder shall be

1 0 confidential.(2) Unless required by law or by a court order or permitted

by the request for proposals, a party to a negotiation shall notdisclose, to any other person, any technical or financial matter orany other informa tion in relation to any discussion, commu nication

15 or negotiation submitted, received or done, as the case may be,under this Ac t, without the consent of the other party.

(1) Subject to subsection (3) and except for a contractawarded pursuant to paragraph (c) of section thirty five, acontracting authority shall cause a notice of the contract award to

20 be published in the prescribed ma nner.A notice issued under subsection (2) shall identify the

concessionaire and include a summary of the essential terms ofthe agreement.A contracting authority shall not award any project or sign

25 any agreement unless theaward of the project has been approved by the U nit; andagreement relating to the project has been approved by

the Cabinet.A contracting authority shall keep an appropriate record30 of information pertaining to the selection and award proceedingsin the prescribed manner.A bidder that claims to have suffered, or that may suffer,loss or injury due to a breach of a duty imposed on a contracting

authority under this A ct or any other written law, may seek review35 of the contracting authority's acts or failure to act.41. (1) A contracting authority may require that the preferred

bidder establish a legal entity incorporated under the laws of Zambia.(2) Where a preferred bidder establishes a legal entity inaccordance w ith subsection (1), the bidder shall make a statement

4 0 to that effect in the pre selection bidding documents or in the requestfor technical proposals, as appropriate.

Confidenti-ality

Notice ofcontractaward

Record ofselectionand awardproceedingsReviewprocedures

Organisationofconcessionaire

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(3) A ny requirement relating to the minimum capital of a legalentity established under subsection (1) and the procedures forobtaining the approval of a contracting authority to the legal entity'sA rticles of Association or any significant changes in the Articlesshall be set out in the agreement consistent with the terms of the 5request for proposals.

Unsolicited2. (1) A contracting authority may receive, consider, evaluateproposalnd acce pt an unsolicited proposal for a public private partnershipif the proposalis independently originated and developed by the proposer;0shall be beneficial to the public;has been prepared without the supervision of the Unit or acontracting authority; andincludes sufficient detail and information for a c ontractingauthority to evaluate the proposal in an objective and5timely manner.A contracting authority shall, within fourteen days afterreceiving an unsolicited proposal, undertake a preliminary evaluationof the unsolicited proposal to determine if the proposal complieswith the requirements of subsection (1).0

A contracting authority or the U nit shall take appropriateaction to protect confidential or proprietary information that a personprovides as part of an unsolicited proposal.(4) A contracting authority shall, where an unsolicited proposaldoes not com ply with subsection ( 1 ), return the proposal without 25further action.

A contracting authority may, if an unsolicited proposalcomplies with subsection (1), continue to evaluate the proposal inaccordance w ith this section.A contracting authority shall, if an unsolicited proposal 30complies with subsection (1 ), advertise the unsolicited proposal forthe purpose of receiving com petitive proposals for the sam e project.An advertisement issued under subsection (6), shall outlinethe general nature a nd scope of th e unsolicited proposal, including

the location of the project, if appropriate and the work to be 35perform ed on or in connection with the project and shall specify anaddress to which a com peting proposal may be submitted.A n advertisement, issued under subsection (6), shall specify

a reasonable time period by which competitors shall submit acompeting proposal to the co ntracting authority.0(9) A contracting authority may charge, the original proposeror any com peting proposer, a reasonable fee to cover its costs forprocessing, reviewing and evaluating an unsolicited proposal andany competing proposals, as the case may be.N.A.B. 13, 2009

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(10) A contracting authority shall determine if any competing proposal is comparable innature and scope to the original unsolicited proposal;evaluate the original unsolicited proposal and any

5omparable com peting proposal; and(c)conduct any good faith discussions and, if necessary, anynegotiations concerning each qualified proposal.

(11) A contracting authority shall evaluate an unsolicited proposaland any comparable competing proposal using the following criteria:

1 0a) novel methods, approaches or concepts demonstrated bythe proposal;scientific, technical, or socio economic merits of theproposal;potential contribution of the proposal to the contracting

1 5uthority's mission;(d ) capabilities, related experience, facilities, or techniques

of the private entity or unique combinations of thesequalities that are integral factors for achieving theproposal objectives;20e) qualifications, capabilities, and experience of the p roposedteam leader or key personnel, who are critical toachieving the proposal objectives;

( f )how the proposal benefits the public; and(g ) any other factors appropriate to a particular proposal.

2512) After evaluating an unsolicited proposal and any competingproposals, a contracting authority may accept the unsolicited proposal and reject any competingproposals;

request the originator of the proposal to match any30ompeting proposal or ma ke a best and final offer and ifthe originator of the proposal does so, the project shallbe awarded to the originator of the proposal;

(c ) reject the unsolicited proposal and accept a comparablecompeting proposal if the contracting authority35etermines that the comparable competing proposal isthe most advantageous to the Government;

(c) accept both the unsolicited proposal and a competingproposal if accepting both proposals is advantageous tothe Government; or40d) reject the unsolicited proposal and any competing proposal.

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(13) Subsection (3) shall apply to any unsolicited proposal orcompe ting proposal that has been rejected.

Contentsandimplemen-tation ofagreement

PART VP U B L I C P R IV A T E P A R T N E R S H I P A G R E E M E N T S43. A n agreement shall provide for such matters as the parties 5consider appropriate, but shall include:

the nature and scope of works to be performed andservices to be provided by the concessionaire;the conditions for provision of services and the extent o fexclusivity, if any, of the co ncessionaire's rights under0

the agreement;the assistance that a contracting authority may provide tothe conce ssionaire in obtaining licences and perm its tothe extent necessary for the implementation of theproject;5

the return of assets, if any, to a co ntracting authority, atthe termination or expiry of the agreement, in suchmanner as may be provided for in the agreement, asspecified in section forty f ive;(e ) procedures for the review and approval of engineering 20designs, construction plans and specifications by thecontracting authority and the procedures for testing andfinal inspection, approval and acceptance of the project;

ffi the Unit's, contracting authority's or other regulatoryagency's right to monitor the works to be performed 25and services to be provided by the conce ssionaire andthe conditions and extent to which the Unit, contractingauthority or the regulatory agency m ay order variationsin respect of the works and c onditions of service or takesuch other reasonable actions as they may find 30appropriate to ensure that the project is properly operatedand the services are provided in accordance with theapplicable legal and contractual requirements;

the extent of the concessionaire's obligation to providethe U nit, contracting authority or regulatory agency, as5appropriate, with reports and other information on itsoperations;mechanisms to deal with additional costs and otherconsequences that might result from any order issuedby the Unit, contracting authority or another public 40authority under this A ct including any compensation towhich the concessionaire might be entitled;

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Public-Private PartnershipNo. of 2009 29( 1 ) any rights of the Unit or contracting authority to review

and approve major contracts to be entered into by theconcessionaire, in particular with the concessionaire'sown shareholders or other affiliated persons;

5/)guarantees of performance to be provided and insurancepolicies to be maintained by the concessionaire inconnection with the implementation of the project;

(k) remedies available in the e vent of default of either party;( 1 ) the extent to which either party m ay be exem pt from liability

1 0or failure or delay to comply with any obligation underthe agreement owing to circumstances beyond itsreasonable control;(m )he duration of the agreement and the rights andobligations of the parties upon its expiry or termination;1 5n) the manner for calculating compensation under this Ac tas provided under section s ix ty -one;(o) the governing law and the mecha nisms for the settlementof disputes that may arise between the Unit orcontracting authority and the conc essionaire;

20p) the rights and obligations of the parties with respect toconfidential information;the relevant financial terms;the sharing of generic risks between the contractingauthority and the concessionaire;

25s) the payment to the concessionaire by way of compensationfrom a revenue fund or of user levies collected by theconcessionaire for a service provided by it as providedunder section forty-eight; an d(t ) such other information as may be prescribed. Governing30aw

Every agreement shall be governed by and construed inaccordance with the laws of Zamb ia unless otherwise provided inthe agreement.(1) An agreement shall specify, as appropriate, whichoverning

35 assets are or shall be public property and which assets are or shallawbe the private property of the concessionaire.(2) An agreement shall, in particular, identify which assetswnershipbelong to the following categories:f assets(a) assets, if any, that the concessionaire is required to return40r transfer to the contracting authority or to anotherentity indicated by the contracting authority in

accordance with the terms of the agreement;

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Acquisitionof rightsrelated toproject site

Financialarrangements

Securityinterest

assets, if any, that the contracting authority, at its option,may purchase from the concessionaire; andassets, if any, that the concessionaire may retain or dispose

of upon expiry or termination of the agreem ent.(1) A contracting authority or other public authority, under 5

the terms of any relevant law and an agreement, shall make availableto the concessionaire or, as appropriate, shall assist theconcessionaire in obtaining such rights related to the project site,including title thereto, as may be nec essary for the implementa tionof the project .0

(2) Any compulsory acquisition of land that may be requiredfor the implementation of a project shall be carried out inaccordance with the L and A cquisition A ct.

A contracting authority or other public authority, under theterms of any law and an agreement, shall make available to the 15concessionaire or, as appro priate, shall assist the concessionaire toenjoy the right to enter upon, transit through or do work or fixinstallations upon, property of third parties, as appropriate andrequired for the implementation of the project.(1) A concessionaire shall have the right to charge, receive 20or collect user levies for the use of an infrastructure facility or itsservices in accordance with an a greement, which shall provide formethods and formulas for the establishment and adjustment of userlevies in accordance with any rules established by the competentregulatory agency.5

(2) A contracting authority may agree to make direct paymentsto the concessionaire as a substitute for, or in addition to, userlevies for the use of the project or its services.

(1) S ubject to any restriction that may be contained in anagreement, a c oncessionaire shall have the right to create security 30interests over any of its assets, rights or interests, including thoserelating to the project, as shall be required to secure any financingneeded fo r the project, including, in particular, the following:

security over movable or immovable property ownedby the concessionaire or its interests in project assets;5a pledge of the proceeds of, and receivables owed to theconcessionaire for, the use of the project or the servicesit provides.

(2) The sha reholders of a concessionaire's company sha ll havethe right to pledge or create any other security interest in their 40shares in the com pany.

Cap. 189Easements

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(3) No security under subsections (1) and (2) may be createdover public property or other prope rty, assets or rights needed forthe provision of a public service, where the creation of such sec urityis prohibited by the laws of Zam bia.

50. (1) Except as otherwise provided in section forty-nine,the rights and obligations of the concessionaire under an agreem entmay not be assigned to a third party without the prior written consentof the appropriate contracting authority.

(2) An agreement shall set out the conditions under which a10 contracting authority shall give its consent to an assignment of therights and obligations of the concessionaire under the agreem ent,

including the acceptance by the new concessionaire of all obligationsthere under and evidence of the new concessionaire's technicaland financial capability as shall be necessary for providing the15 service or undertaking the project.

(1) Except as otherwise provided in an agreement, acontrolling interest in the concessionaire's company shall not betransferred to third parties without the consent of the appropriatecontracting authority.

202) An agreement shall set forth the conditions under whichthe consent of a c ontracting authority shall be given.(1) An agreement shall set out, as appropriate, the extentof a concessionaire's obligations to ensure(a) the modification of the service so as to meet the demandfor the service;25b) the continuity of the service;the provision of the service under essentially the sameconditions for all users; andthe non discriminatory access, as appropriate, of otherservice providers to any public infrastructure network

30perated by the concessionaire.(2) A concessionaire shall have the right to issue and enforce

rules governing the use of the infrastructure facility, subject to theapproval of the appropriate contracting authority or regulatoryagency. C ompensation for specific changes in legislation353. An agreement shall set out the extent to which aconcessionaire is entitled to compensation in the event that thecost of the concessionaire's performance of the agreement hassubstantially increased or that the value that the concessionairereceives for such performance has substantially diminished, as40 compared with the costs and the value of performance originally AssignmentofagreementTransfer ofcontrollinginterest inconcess-ionaireOperation ofinfrastructurefacilityCompensat-ion forspecificchanges inlegislationN.A.B. 13, 2009



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Revision ofagreement

Takeover ofproject

foreseen, as a result of changes in legislation or regulationsspecifically applicable to the project or the services it provides.54. (1)ithout prejudice to section sixty three, an

agreement shall set out the extent to which a concessionaire isentitled to a revision of the agreement with a view to providing 5compensation in the event that the cost of the concessionaire'sperformance of the a greement has substantially increased or thatthe value that the concessionaire receives for such performancehas substantially diminished, as compared with the costs and thevalue of performa nce originally foreseen, as a result of0changes in econom ic or financial conditions; or

changes in legislation or regulations not specificallyapplicable to the project or the services it provides:Provided that the e conomic, financial, legislative orregulatory c hanges5

occur after the conclusion of the agreement;are beyond the control of the concessionaire; and

(iii) are of such a nature that the con cessionaire couldnot reasonably be expected to have taken theminto account at the time the agreement was0negotiated or have avoided or overcome theirconsequences.(2) An agreement shall establish procedures for revising theterms of the agreement following the occurrence of any changes.

55. (1) A contracting authority shall have the right, under the5circumstances set out in an agreement, to temporarily take overthe operation of an infras tructure project or facility, for the purposeof ensuring the effective and uninterrupted delivery of a service ortimely completion of the project, in the event of a material defaultby the conce ssionaire in the performanc e of its obligations and to0rectify the breach within a reasonable period of time after havingbeen given notice by the contracting authority to do so.

(2) In the event that a contracting authority elects to take overa project under subsection (1 ), the contracting authorityshall collect and pay any revenues that are subject to lien5

to satisfy any obligation;may deve lop and operate the project, impose user leviesand comply w ith any service contract existing; and(c) m ay solicit proposals, as appropriate, for the construction,maintenance or operation of the infrastructure project.0

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(1) The Unit may agree with any entity extendingfinancing for a project and a concessionaire to provide for thesubstitution of the conce ssionaire with another person appointed toperform under the existing agreeme nt, upon a material default by

5 the concessionaire or other event that could otherwise justify thetermination of the agreement.(2) The Government may facilitate a concessionaire tosecuritise any project rec eivables and assests in favour of a lendersubject to such terms as the Government may determine in order10 to safeguard the successful implem entation, completion, working,managem ent and control of the project.

The duration of a public private partnership shall be setforth in an agreement and the contracting authority may not agreeto extend its duration except as a result of the following15 circumstances:

delay in completion or interruption of operation due tocircumstances beyond the reasonable control of eitherparty;project suspension brought abo ut by acts of the U nit or a

20ontracting authority or other pub lic authority;(c) increase in costs arising from requirements of the U nit ora contracting authority not originally foreseen in the

agreement, if the concessionaire would not be able torecover such costs without such extension; or25d)n agreement with the concessionaire, for reasons ofnational or public interest, as justified in the record to b ekept by the Unit.

A contracting authority or the Unit may terminate anagreement

30a) in the event that it can no longer be reasonably expectedthat the concessionaire w ill be able or willing to performits obligations, owing to insolvency, material default orotherwise; or(b ) for compelling reasons of national or public interest, subject

35o payment of compensation to the concessionaire asagreed in the agreement.A concessionaire shall not terminate an agreement exceptunder the following circumstances:in the event of material default by the U nit or a contracting

40uthority or other public authority of its obligations underthe agreement;if the conditions for a revision of the agreement undersubsection(1) of sectionfifty-four are met but the partieshave failed to agree on a revision of the agreem ent; or

Substitutionofconcessionaire

Durationandextension ofagreement

Terminationofagreementbycontractingauthority

Terminationof agreementbyconcessionaire

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Terminationof agreementbyitherpartyCompensationuponterminationof agreement

Managementof publicprivatepartnershipWinding upand transfermeasures

(c) if the cost of the concessionaire's performance of theagreement has substantially increased or the value thatthe concessionaire receives for such performance hassubstantially diminished as a re sult of acts or omissionsof the Unit or a contracting authority or other public 5authority and the parties have failed to agree on arevision of the agreement.

Either party has the right to terminate an agreement bymutual consent or if the performance of its obligations is renderedimpossible by circumstances beyond either party's reasonable0control.

An agreement shall stipulate how compensation due toeither party shall be calculated in the event of termination of theagreement and shall provide, where appropriate, for compensationfor the fair value of works performed under the agreem ent, costs5incurred or losses sustained by either party, including, as appropriate,lost profits.

A contracting authority shall be responsible for ensuringthat the agreement is properly implemented, managed, enforced,monitored and reported on by the concessionaire.0A n agreeme nt shall provide, as appropriate, for

mechanisms and procedures for the transfer of assets toa contracting authority in case o f a w inding up;the compensation to which the concessionaire may beentitled in respect of assets transferred to a contracting 25authority or to a new concessionaire or purchased by acontracting authority;

the transfer of technology required for the operation of aproject;the training of a contracting authority's personnel or of a 30successor concessionaire in the operation andmaintenance of project;(e ) the provision, by the concessionaire, of continuing supportservices and resources, including the supply of spareparts, if required, for a reasonable period after the 35transfer of the project to a contracting authority or to asuccessor concessionaire.

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PART VISETTLEMENT OF DISPUTES AND GFNERAL PROVISIONSA ny disputes between the U nit or a contracting authorityisputesand the concessionaire shall be settled through the dispute settlementontractingtracting5 mechanisms agreed by the parties in the agreement or, failing suchuthority oragreement, in accordance with the Arbitration Act, 2000.nit andconcessionaireA ct No. 19 of2000The Unit may, where a concessionaire provides servicesisputeso the public or operates an infrastructure facility which is accessiblenvolvingcustomerso the public, require the concessionaire to establish simplified andsersr

10 efficient mechanisms for handling claims submitted by its customersor users o f the infrastructure facility.66. (1) The Minister may, by statutory instrument, makeegulationsregulations for the carrying out of the purposes of this Act.(2) Without prejudice to the generality of subsection (1), the15 Minister may make regulations forany thresholds relating to the procurem ent process;

any matter re lating to competitive public bidding and directnegotiations;(c ) mecha nisms for settling of disputes under this Act;

20d ) the imposition, revision and collection of user levies; and(e) anything that is required to be prescribed under this Ac t.

67. (1) Where an agreement was entered into before thea v i n g scommencement of this Act, and that agreement or arrangementwould have been a public-private partnership arrangement if this25 Act was in operation on such date, then the agreement shall have

effect as if this Act was in operation when the agreement orarrangement was entered into.(2) An agreement entered into after the commencement ofthis Act shall comply with this Act.

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FIRST SCHEDUL E(Sections 3 and 4)

Build andTransfer(BT)

Build LeaseandTransfer(BLT)

BuildOperate andTransfer(BOT)

INFRASTRUCTURE PROJECTS AND FACILITIESThe following public private partnership arrangements with theirvariations and combinations may be entered into by the Unit or 5contracting authority for undertaking any project. The arrangem entsenumerated in this Schedule are indicative in nature and the U nitor contracting authority may evolve and arrive at such agreem entor arrangement incorporating any of the arrangement enumeratedhereinafter or any other arrangements as are nec essary or expedient0for any specific project:A contractual arrangement whereby a concessionaireundertakes the financing and construction of a given project andafter its completion hands it over to the Government or a contractingauthority. The Government or the contracting authority would5reimburse the total project investment, on the basis of an agreedschedule. This arrangement may be employed in the constructionof any project, including critical facilities, which for security orstrategic reasons must be operated directly by the contractingauthority.0

A contractual arrangement whereby a concessionaireundertakes to finance and construct any project and upon itscompletion hands it over to the Government or a contractingauthority concerned on a lease arrangement for a fixed period,after which ownership of the project is automatically transferred 25to the Governm ent or the contracting authority concerned.

3.contractual arrangement whereby a concessionaireundertakes the construction, including financing, of a giveninfrastructure facility, and the operation and maintenance thereof.The concessionaire operates the facility over a fixed term during 30which the concessionaire is allowed to collect user levies fees,rentals and other charges not exce eding those proposed in the bidor as negotiated and incorporated in the agreem ent or regulationsto enable the recovery of the investment in the project. Theconcessionaire transfers the project to the Government or the 35contracting authority concerned at the end of the fixed term thatshall be specified in the agree ment. This shall include a supply andoperate situation which is a contractual arrangement whe reby thesupplier of equipment and machinery for a given project, if theinterest of the Governm ent or the contracting authority so requires,0operates the facility providing in the process technology transfer

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and training to Governmen t, regulatory agency or the co ntractingauthority nominated individuals.A contractual arrangement whereby a concessionaire is

authorised to finance, construct, own, operate and m aintain a project5rom which the concessionaire is allowed to recover this totalinvestment by collecting user levies. Under the project, theconcessionaire owns the assets of the project and may choose toassign its operation and maintenance to a project operator. Thetransfer of the project to the Governm ent or the contracting authority

10 is not envisaged in this structure. However, the Government orcontracting authority may terminate its obligations after specifiedtime period.A contractual arrangement whereby a concessionaire isauthorised to finance, construct, maintain and operate a project

15 and whereby the project is to vest in the concessionaire for a specificperiod. During the operation period, the concessionaire will bepermitted to charge user levies specified in the agreement, to recoverthe investment made in the project. The concessionaire is liable totransfer the project to the Governm ent or the contracting authority

20 after the expiry of the specified period of operation.A contractual arrangement whereby the Government or acontracting authority contracts out a project to a concessionaire toconstruct the facility on a turn key ba sis, assuming costs overruns,delays and specified performance risks. Once the facility is25 commissioned satisfactorily, the concessionaire isgiven the right to operate the project and collect user levies underan agreement. The title of the project always vests with theGovernme nt or the contracting authority in this arrangement.

A contractual arrangement whereby the concessionaire adds30 to an existing project which it rents from the Government or a

contracting authority and operates the expa nded project and collectsuser's levies, to recover the investment over an agreed franchiseperiod. There may or may not be a transfer arrangement withregard to the adde d facility provided by the concessionaire.

35 8. A contractual arrangement whereby favorable conditionsexternal to a new project which is to be built by a concessionaireare integrated into the BOT arrangement by giving that entity theright to develop adjoining property and thus, enjoy some of thebenefits the investment creates such as higher property or rent40 values.

Build Ownand Operate(BOO)

Build OwnOperateTransfer(BOOT)

BuildTransfer andOperate(BTO)

Contract Addand Operate( C A O )

DevelopOperate andTransfer(DOT)

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RehabilitateOperate andTransfer(ROT)

RehabilitateOwn andOperate

Build OwnOperate andMaintaincontract

LeaseManagementContract

ManagementContract

ServiceContract

SupplyOperate andTransfer

A contractual arrangement whereby any existing facility ishanded over to the private sector to refurbish, operate and collectuser levies in the operation period to recover the investment andmaintain for a fran chise period, at the expiry of w hich the facility isturned over to the Government or a contracting authority. The 5term is also used to describe the purchase of an existing facilityfrom abroad, importing, refurbishing, erecting and consuming itwithin the host country.

A contractual arrangement whereby an existing facility ishanded over to the concessionaire to refurbish and operate w ith no 10time limitation imposed on ownership. A s long as the concessionaireis not in violation of its franchise, it can continue to operate thefacility and collect user levies in pe rpetuity.

A contractual arrangement whereby a concessionaireundertakes to finance, construct, operate and maintain a project 15and whereby such project is to vest in the concessionaire for aspecified period. During the period of operation of the project, theconcessionaire may be permitted to charge user charges asspecified.

A contractual arrangement whereby the Government or a 20contracting authority leases a project owned by the Government tothe person who is perm itted to operate and maintain the project forthe period specified in the agreement and to charge user chargestherefor.

A contractual arrangement whereby the Government or a 25contracting authority entrusts the operation and manage ment of aproject to a person for the period specified in the agreement onpayment of specified consideration. In such agreement, theGovernment or the contracting authority may charge the usercharges and collect the sam e either itself or entrust the collection, 30for consideration, to any person who shall after collecting the usercharges pay the same to the Government or the contractingauthority.

A contractual arrangement whe reby an existing project isvested in a person to renovate, operate and maintain. The 35concessionaire shall be permitted to charge levies as spec ified inthe agreement.

15. A contractual arrangement whereby a person undertakesto provide services to the Government o r contracting authority fora period. The Government or the contracting authority shall pay 40the person an amount according to the agreed schedule.

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16.A contractual arrangement whereby a person supplies tothe Government or a contracting authority the equipment andmachinery for a project and undertakes to operate the project for aperiod and consideration specified in the agreement. During the

5 operation of the project, the person shall undertake to trainemployees of the Government or contracting authority to operatethe project.

SupplyOperate andTransfer

SECOND SCHEDULE(Section 6 (2))

10DMINISTRATION OF THE COUNCIL1 .1) Subject to the other provisions of this Schedule, amember of the Council, shall hold office for a period of three yearsfrom the date of appointment and may be re-appointed for a furtherperiod of three years.1 52)ubject to the other provisions of this Schedule, a mem bershall, on the expiration of the period for which the member isappointed, continue to hold office until another mem ber is appointedto succeed that member.(3 )he office of a member becomes vacant 20a) upon the member's death;if the mem ber is adjudged bankrupt;if the member is absent from three consecutive meetingsof the Council of which the member has had notice,without the prior approval of the C ouncil;

25d) upon the expiry of one month's notice of the member'sintention to resign from office, given by the me mber inwriting to the Council;

(e) if the membe r become s mentally or physically incapableof performing the duties of a m ember of the Council; or30f)if the member is convicted of an offence involvingdishonesty or fraud under this A ct or any other written

law.(4 )mem ber may resign from office by giving not less thanone m onth's notice in writing to the President.355 )he President shall, where the office of a membe r becomesvacant, appoint another member in place of the memb er who vacatesoffice, and such mem ber shall hold office for the remainder of theterm. Tenure ofoffice andvacancyN.A.B. 13, 2009



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2.1) Subject to the other provisions of this Act, the Councilmay regulate its own procedure.The C ouncil shall meet for the transaction of business, atleast once in every three months at such places and times as theChairperson may determine.

The C hairperson may, upon giving notice of not less thanfourteen days, call a meeting of the C ouncil and shall call a specialmeeting upon receiving a written request from at least fivemembers of the Council.

If the urgency of any particular matter doe s not permit thegiving of the notice required under subparagraph (3), a specialmeeting may be called by the Chairperson upon giving a shorternotice.

The quorum at a meeting of the Council shall be half ofthe members of the Council.5(6) The re shall preside at any meeting of the C ounci lthe Chairperson;in the absence of the C hairperson, the Vice-C hairperson;and(c) in the absence of both the Chairperson and the Vice-0

Chairperson, such member as the mem bers present mayelect from amongst them selves for the purpose of thatmeeting.(7 )decision of the Council on any question shall be by amajority of votes of the members present and voting at the meetingand, in the event of a n equality of votes, the person presiding at the5meeting shall have, in addition to a deliberative vote, a castingvote. The C ouncil may invite any person whose presenc e in its

opinion is desirable to attend and to participate in the de liberationsof a mee ting of the C ouncil but such person shall have no vote.0The validity of any proceedings, act or decision of theCouncil shall not be affected by any vacancy in the membership ofthe Council or by any defect in the appointment of any membe r orby reason that any person not entitled so to do, took part in theproceedings.5

(10) The Council shall cause minutes to be kept of theproceedings of every meeting of the Council and every mee ting ofany sub-comm ittee established by the Council.Committees.1) The Council may, for the purpose of performing itsofunctions under this A ct, constitute any com mittee and delegate toCouncilny such co mm ittee such of its functions as it thinks fit.0(2 )he Council may appoint as members of a committeeconstituted under sub-paragraph (1), persons who are or are notmembers of the Council and such persons shall hold office forsuch period as the Council may determ ine.N.A.B. 13, 2009

ProceedingsofCouncil

1 0

Public-Private PartnershipNo. of 2009 41(3 ) committee of the Council may regulate its own procedure.


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4 .here shall be paid to members of the Council suchallowances as the C ouncil may, with the approval of the President,determine.5.1) A member or person who is present at a meeting ofthe Council at which any m atter, in which that person or any memberof the person's imm ediate family, is directly or indirectly interestedin a private capacity, is the subject of consideration, shall, as soonas is practicable after the comm encem ent of the meeting, disclose10 that interest and shall not, unless the Council otherwise directs,take part in any consideration or discussion of, or vote on any questionrelating to, that matter.

(2 )disclosure of interest made under this paragraph shall berecorded in the minutes of the m eeting at which it is made.1 5.1) A person shall not, without the consent in writing givenby or on behalf of the Council, publish or disclose to any unauthorisedperson, otherwise than in the course of duties of that person, thecontents of any document, communication or informationwhatsoever, which relates to or which has come to the knowledge20 of that person in the course of that person's duties under this Act.(2 )person who contravenes sub-paragraph (1) commits anoffence and is liable, upon conviction, to a fine not exceeding twohundred thousand penalty units or to imprisonment for a term no t

exceeding two years, or to both.253)person who, having any information which to theknowledge of that person has been published or disclosed incontravention of sub-paragraph (1), unlawfully publishes orcommunicates the information to any other person, commits anoffence and is liable, upon conviction, to a fine not exceeding two30 hundred thousand penalty units or to imprisonment for a term notexceeding two years, or to both. AllowancesofmembersDisclosure ofinterestProhibition ofpublicationof, ordisclosure ofinformationtounauthorisedpersons

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Public-private Partnership Bill, 2009

Documents

Transcript of Public-private Partnership Bill, 2009