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Public-Private Partnership [No. 14 of 2009 75

THE PUBLIC-PRIVATE PARTNERSHIP ACT, 2009

ARRANGEMENT OF SECTIONS

SectionPART I

PRELIMINARYShort title and commencementApplicationInterpretation

PART IITHE PUBLIC-PRIVATE PARTNERSHIP UNIT, COUNCIL AND TECHNICAL.

COMMITTEE

Establishment of Public-Private Partnership UnitFunctions of UnitEstablishment of Public -Private Partnership CouncilFunctions of CouncilComposition of CouncilSecretary to CouncilConstitution of Public-Private Partnership Technical

CommitteeFunctions of Technical CommitteeProceedings of Technical CommitteeDisclosure of interestConciliation, mediation and arbitrationAppointment of mediator or arbitratorDirector, Deputy Director and other public officers

PART IIIPROJECT IDENTIFICATION AND FEASIBILITY STUDY

Participation in projectProject identification and feasibility studyApproval by Council

PART IVCOMPETITIVE SELECTION PROCESS AWARD PROCEEDINGS

Procurement procedurePre selection proceedingsRequest for expression of interest

Copies of this Act can he obtained from the Government Printer,P.O. Box 30136, 10101 Lusaka. Price K20,500 each.

76 [No. 14 of 2009 Public-Private Partnership

Pre-selection criteriaParticipation of ConsortiaEvaluation of pre-selection bidsApproval of UnitSingle-stage and two-stage procedures for requesting

technical proposalsContent of request for technical proposalsBid securitiesClarifications and modificationsEvaluation criteriaEvaluation of technical proposalFurther demonstration of fulfillment of qualification criteriaFinal negotiationsCircumstances authorizing award without competitive

proceduresProcedures for negotiation of agreementConfidentialityNotice of contract awardRecord of selection and award proceedingsReview proceduresOrganisation of concessionaireUnsolicited proposal

PART VPUBLIC-PRIVATE PARTNERSHIP AGREEMENTS

Contents and implementation of agreementGoverning lawOwnership of assetsAcquisition of rights related to project siteEasementsFinancial arrangementsSecurity interestsAssignment of agreementTransfer of controlling interest in concessionaireOperation of infrastructure facilityCompensation for specific changes in legislationRevision of agreementTakeover of projectSubstitution of concessionaire

57. Duration and extension of agreement


Termination of agreement by contracting authorityTermination of agreement by concessionaireTermination of agreement by either partyCompensation upon termination of agreementManagement of public private partnershipsWinding up and transfer measures

PART VISETTLEMENT OF DISPUTES AND GENERAL PROVISIONS

Disputes between contracting authority or concessionaireand concessionaire

Disputes involving customers or usersRegulationsSavings

SCHEDULE


GOVERNMENT OF ZAMBIA

ACTNo. 14 of 2009

Date ofAssent: 26th August, 2009

An 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 Public-Private Partnership Unit and provide for its functions;establish the Public-Private Partnership Council andprovide 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 the impleme-ntation of public-private partnership agreements betweencontracting authorities and concessionaires; and providefor matters connected with, or incidental to, the foregoing.

128th August, 2009

ENACTED by the Parliament of Zambia. Enactment

PART IPRELIMINARY

1. This Act may be cited as the Public-Private Partnership Act, Short title2009, and shall come into operation on such date as the Minister andmay, by statutory instrument, appoint. commen-

cement


Application 2. This 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 PartnershipUnit, but does not apply to the following infrastructure projects orinfrastructure facilities:

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;

(c) projects which may be taken over by any concessionaireor private sector entity on privatisation or dis-investmentby any Government Ministry, department, statutory body,State corporation, local authority or agency; or

projects which have been expressly excluded from theprovisions of this Act or which are not prescribed bythe Minister.

Interpretation 3. In this Act. unless the context otherwise requires—"affordable" in relation to an agreement, means a contractual

arrangement where a contracting authority is able to meetany 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 andauthorisations necessary 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;

"hid" means a tender, an offer, a proposal or price quotation,given in response to an invitation to participate in aninfrastructure 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 ofwhich 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;

"concessionaire" means a person from the private sector whoundertakes an infrastructure project or infrastructure facilityor the provision of any social sector services under a public-private partnership agreement, other than a contractingauthority;


"contracting authority" means the public authority that hasthe power to enter into an agreement for the implementationof an infrastructure project or infrastructure facility orthe provision of any social sector services under any law,and includes any Ministry, 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 contracting authority;

"Council"means the Public-Private Partnership Councilestablished under section six,.

"generic risks" means any circumstances that have thepotential to adversely affect the development of, orinterests of the parties to, an infrastructure project orinfrastructure facility or the provision of any social sectorservices 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 Minister;

"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 infrastructurefacility or the rehabilitation, modernisation, 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 toperform any duty under a public-private agreement whichaffects 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 Unit;

"National Council for Construction" means the Councilestablished under the National Council for ConstructionAct, 2003; Act No. 13

"preferred bidder" means a bidder, including any bidding of 2003consortium, selected as a successful bidder during thecompetitive selection process;

"project" means an infrastructure project, an infrastructurefacility, or the provision of any social sector service, asthe case may be;

"public-private partnership" means investment through privatesector participation in an infrastructure project orinfrastructure facility;

"public-private partnership agreement" means a contractualarrangement between a contracting authority and aconcessionaire, made in accordance with this Act, in whichthe concessionaire—

undertakes to perform or undertake anyinfrastructure project or infrastructure facility asspecified in the First Schedule or as prescribed;

undertakes 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 ofState property; and

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

a fee from any revenue fund or a Ministry'sbudgetary funds;

user levies collected by the concessionairefrom users or customers for a serviceprovided by it; or

(iii) a combination of the consideration paid undersub-paragraphs (i) and (ii);

"regulatory agency" means a public authority that is entrustedwith the power to issue and enforce the laws governinginfrastructure development or the provision of services;

"Technical Committee" means the Public-Private PartnershipTechnical Committee established under section ten;

"Unit" means the Public-Private Partnership Unit establishedunder section four;

"unsolicited proposal" means any proposal relating to theimplementation of an infrastructure project or infrastructurefacility that is not submitted in response to a request orsolicitation issued by the Unit or a contracting authoritywithin the context of a competitive selection procedure;

"user levy" means the right or authority granted to aconcessionaire by the contracting authority to recoverinvestment and a fair return on investment and includes


411•111111110.


tolls, fees, tariffs, charges or other benefit whatsoevercalled;

"value for money" means the carrying out of the institutionalfunction of a contracting authority or the use of Stateproperty by a concessionaire, in terms of an agreement,which results in a net benefit to the contracting authorityor consumer, defined in terms of cost, price, quality,quantity, risk transfer or a combination thereof; and

"Zambia Development Agency" has the meaning assigned toIt in the Zambia Development Agency Act, 2006.

PART IITHE PUBLIC-PRIVATE PARTNERSHIP UNIT, COUNCIL AND TECHNICAL

COMMITTEE4. (1) There is hereby established the Public-Private

Partnership Unit which shall be responsible for the implementationof the provisions of this Act.

The Unit shall be a department in the Ministry responsiblefor finance and shall be under the control and supervision of theMinister responsible for finance.

The expenses of the Unit shall be charged upon and issuedout of the general revenues of the Republic.

5. (1) The functions of the Unit are to—promote the participation ,of the private sector an the

financing, construction, maintenance and operation ofany project irrespective of its cost;

advise Government on administrative procedures in relationto project development and on all matters of policyrelating to public-private partnerships;

(0 conceptualise, identify and categorise projects for purposesof this Act and prepare a project register as may bePrescribed;

co-ordinate with contracting authorities in respect of anyproject;

develop technical and best practice guidelines in relationto all aspects of public-private partnerships, standardisedbidding documents and public-private partnershipagreement provisions for purposes of this Act and asmay be prescribed;

(f)receive and make an assessment of any proposed projectsubmitted to it and give its recommendations to thecontracting authority as to whether the project or facility-

Act No. 1 1 of2006

Establishmentof Public-PrivatePartnershipUnit

Functions ofUnit


is 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 conformitywith the approved feasibility study and as may beprescribed;

monitor the competitive selection process and provide forreview of the process if so required, under this Act;

(i) monitor progress of implementation of public-privatepartnerships;

(j)facilitate the internal and external auditing of projects andprepare a road map for project development;

(k) in liaison with the Zambia Development Agency, facilitateand market investment in public-private partnerships;

(I) identify inter-sectoral linkages and facilitate approvals fromthe Ministry responsible for finance required under thisAct;

approve terms of reference for consultancy assignmentsfor 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 project, as prescribed by theMinister;

monitor issues pertaining to user levies and recommendto the Council, in liaison with the appropriate regulatoryagency, mechanisms and procedures for setting, revisingand collecting user levies and the settlement of disputesrelating to user levies, notwithstanding any other law tothe contrary;

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

(q) promote public-private partnership awareness andadvocacy in Zambia.

The Unit shall be responsible for ensuring the properimplementation, management, enforcement and monitoring of anyagreement and the reporting by a concessionaire on an agreement.

The Unit shall exercise and perform such other powersand functions as are conferred or imposed on it by, or under, thisAct or any other written law.


(1) There is hereby established the Public-PrivatePartnership Council.

(2) The provisions of the Second Schedule apply to the Council.

(1) The functions of the Council are toformulate policies relating to public-private partnerships

for purposes of this Act;approve projects for purposes of this Act;approve the preliminary award of agreements under this

Act;ensure competition, transparency, fairness and equity in

the selection process under this Act;(e) make recommendations to the contracting authority on

generic risk sharing principles for any project and thegrounds for entering into negotiations with a preferredbidder;

(f)give directions to any contracting authority, regulatoryagency or concessionaire regarding the implementationof any project and the contracting authority, regulatoryagency or concessionaire shall comply with the directive,subject to any other written law;

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

resolve issues relating to the project approval process;and

(i) refer any bid received by it to an appropriate contractingauthority for examination and evaluation;

The 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 Committee.

The Council shall, in the performance of its functions underthis Act, take into consideration the recommendation ofthe TechnicalCommittee.

(4) In the discharge of its functions under this Act, the Councilmay—

commission any study relevant to the determination of theaward of any agreement;

request any contracting authority, regulatory agency,concessionaire or any other body or person to furnishthe Council with information, details, documents andparticulars required in connection with or relating to anyproject;

Establishmentof Public-PrivatePartnershipCouncilFunctions ofCouncil


Compositionof Council

request any professional or technical assistance fromany appropriate body or person in Zambia or elsewhere;and

inspect, visit, review and monitor any project and itsimplementation, execution, operation and management.

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

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

a project; andanswer all relevant questions, on a project as

requested by the Council; and(b) examine any record or other document submitted under

paragraph (a) and take copies or extracts from them.(6) Any person to whom a request is made under subsection

(5) who—fails to comply with the request; orrefuses to answer or gives any false or misleading answer

to any question lawfully put by the Council;commits an offence and is liable upon conviction, to a fine notexceeding five hundred thousand penalty units or to imprisonmentfor a term not exceeding five years, or to both.

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

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

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

the Minister responsible for finance, who shallbe the Chairperson;

four Ministers appointed by the President, oneof whom shall be designated the Vice-Chairperson;

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


(1) The Permanent Secretary in the Ministryresponsible for finance shall be the Secretary to the Council.

(2) The Secretary shall be responsible for the day-to-day affairsof the Council under the general supervision of the Chairperson.

(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-General:the Permanent Secretary of the Ministry responsible for

works and supply;the Permanent Secretary of the Ministry responsible for

industry;(e) the Permanent Secretary of the Ministry responsible for

land;(f)the Permanent Secretary of the Ministry responsible for

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

(i) a representative of the Environmental Council of Zambia;(j)a representative of the Zambia Public Procurement

Authority;(k) a representative of the Economic Association of Zambia,

nominated by that Association; and(l)two persons appointed by the Minister.

The Minister shall appoint the Vice-Chairperson fromamong the members.

Subject to subsection (4), the members of the TechnicalCommittee referred to in paragraphs (g) to (1) of subsection (1)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) The office of a member becomes vacant—if the member is absent, without reasonable excuse, from

three consecutive meetings of the Technical Committeeof which the member has had notice;

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

the member was appointed;

Secretary toCouncil

Constitutionof Public-PrivatePartnershipTechnicalCommittee


Functions ofTechnicalCommittee

Proceedingsof TechnicalCommittee

(e) if the member becomes mentally or physically incapableof performing the duties of a member;

(f)if the member is removed by the Minister;if the member is convicted of an offence involving

dishonesty or fraud under this Act or any other law;upon the expiry of one month's notice of the member's

intention to resign from office, given by the member tothe Minister.

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

Where a vacancy occurs in terms of subsection (4), theMinister shall appoint another person to replace the member whovacates office, but that person shall hold office for the remainderof the outgoing member's term.

(7) A member of the Technical Committee shall be paid suchallowances as the Minister may determine.

11. (1) The Technical Committee shall advise the Counciland the Unit on all technical matters relating to public-privatepartnerships and projects under this Act.

(2) Notwithstanding the generality of subsection (1), theTechnical Committee shall—

recommend to the Council the award of agreements underthis Act;

evaluate and select projects for award for recommendationto the Council;

recommend the approval of projects under this Act; andperform such other functions provided for under this Act,

or as may be assigned by the Council.12. (1) Subject to the other provisions of this Act, the Technical

Committee may regulate its own procedure.The Technical Committee shall meet for the transaction

of business at least once in every three months at such places andat such times as the Chairperson may determine.

Upon giving notice of not less than fourteen days, ameeting of the Technical Committee may be called by theChairperson and shall be called if not less than five members sorequest in writing:

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.


Six members shall form a quorum at any meeting of theTechnical Committee.

There shall preside at any meeting of the TechnicalCommittee

the Chairperson;in the absence of the Chairperson, the Vice-Chairperson;

and(c) in the absence of both the Chairperson and the Vice-

Chairperson, such member as the members present mayelect from among themselves for purposes of themeeting.

The determination of any matter before the TechnicalCommittee shall be according to the votes of the majority of themembers present and considering the matter.

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 keptof the proceedings of every meeting of the Technical Committee.

(1) A person present at a meeting of the TechnicalCommittee at which any matter is the subject of consideration andin which matter that person is directly or indirectly interested shall,as soon as is practicable after the commencement of the meeting,disclose the interest and shall not, unless the Technical Committeeotherwise directs, take part in any consideration or discussion of orvote on, any question touching that matter.

(2) A disclosure of interest made under subsection (1) shall benoted in the minutes of the meeting at which it is made.

(1) There shall be a Director for the Unit who shall be apublic officer appointed by the Public Service Commission.

(2) The Director shall, subject to the general or specificdirections of the Council —

be responsible for the administration of the Unit;be an ex-officio member of the Technical Committee;

and(c) exercise the functions conferred upon the Director by, or

under, this Act.(3) The Public Service Commission shall appoint such other

officers as are necessary for purposes of this Act.

Disclosure ofinterest

Director andother publicofficers


Conciliation,mediationandarbitration

Appointmentof mediatoror arbitrator

Act No. 19 of2000

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 appointa suitable person to act as mediator or arbitrator for the settlementof disputes on its behalf, in accordance with this Act or theArbitration Act, and any action or decision of a person so appointedshall be deemed to be an action or a decision of the Council.

PART IIIPROJECT IDENTIFICATION AND FEASIBILITY STUDY

Participation 17. Any person in the private sector may participate in thein project financing, construction, rehabilitation, maintenance, operation and

management of any projects as enumerated in the First Scheduleor as prescribed, notwithstanding any other law to the contrary.

Project 18. The Minister may, by statutory instrument, make regulationsidentifica- to provide for-tion and (a) the identification, evaluation, operation and managementfeasibility of projects under this Act;study

(b) the undertaking of feasibility studies for purposes of thisAct;

the implementation and monitoring of projects under anagreement; and

any other matter to ensure that agreements provide valuefor money and afford the optimum transfer ofappropriate technical, operational or financial risk toconcessionaires.

Approval 19. (1) Subject to subsection (5), a contracting authority shall,by Council

after undertaking a feasibility study and in accordance with theadvice of the Unit, submit a project proposal together with theproposed agreement to the Technical Committee for evaluation.

(2) The Technical Committee shall consider the project proposaland the proposed agreement submitted under subsection (1) andsubmit the feasibility study, the project proposal and the proposedagreement to the Council which shall

(a) accept the project proposal and agreement with or withoutamendments, within the prescribed time;

(h) return the project proposal and agreement to thecontracting authority for re-consideration and resubmission for approval, within the prescribed time; or


(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 ismaterially revised, including any assumption concerning affordability,value for money 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 thepurpose 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 Councilfor consideration in accordance with subsection (2).

PART IVCOMPETITIVE SELECTION PROCESS AND AWARD PROCEEDINGS

20. (1) The pi oeurerrient procedure relating to public privatepartnerships provided for under this Act shall be as follows:

the procurement system shall be fair, equitable, transparent,competitive and cost effective;

the procurement process shall be in accordance withthis Act or the bidding documents; or

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 PublicProcurement Act, 2008, shall apply; and

(c) take into account the Citizens Economic EmpowermentAct, 2006, regarding preferential treatment for certaincategories of citizens that have been disadvantaged ormarginalised, as defined under that Act, in accessingand being awarded tenders for the procurement of goodsand 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

Act No. 12 of2008Act No. 9 of2006

Pre-selectionproceedings


Request 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 authorisation 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 shallbe 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 concessionaire; and

financial arrangements envisaged by thecontracting authority;

where already known, a summary of the main requiredterms of the agreement to be entered into;

the manner and place for the submission of applicationsfor pre-selection and the deadline for the submission,expressed as a specific date and time, allowing sufficienttime for bidders to prepare and submit their expressionsof interest;

(e) the manner and place for solicitation of the pre selectionbidding documents; and

(f)an appropriate statement to the effect that the contractingauthority reserves the right to request proposals uponcompletion of the pre selection proceedings 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 participation of consortia in accordancewith section twenty-four;


whether the contracting authority intends to request onlya limited number of pre selected bidders to submitproposals upon completion of the pre selectionproceedings and, if applicable, the manner in which thisselection shall be carried out; and

whether the contracting authority intends to require thepreferred bidder to establish an independent legal entityunder any other law in accordance with section forty-one.

23. Any person who meets the criteria stated in the pre selection Pre selectionbidding documents shall qualify for the pre selection proceedings criteria

which criteria shall include the following:adequate professional and technical qualifications, human

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

appropriate managerial and organisational capability,reliability and experience, including previous experiencein operating similar infrastructure facilities.

24. (1) A contracting authority when requesting for submission Participationof expressions of interest for the pre selection proceedings, may of consortiaallow bidders to form bidding consortia and in such a case the biddingconsortium shall demonstrate its qualifications, in accordance withsection twenty-three, relating to the consortium as a whole as wellas to its individual members.

Unless otherwise authorised by a contracting authority inthe pre selection bidding documents, each member of a consortiummay participate, either directly or indirectly, in only one consortiumat the same time.

When considering the qualifications of bidding consortia, acontracting 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.

25. (1) A contracting authority shall evaluate the qualifications Approval ofof each bidder that has submitted an expression of interest for pre Unit

selection, applying only the criteria that are set forth in the pre-selection bidding documents and this Act.

(2) All pre selected bidders shall, after the approval of theUnit, as specified in section twenty-six, be invited by the contractingauthority to submit proposals in accordance with this Act.

94 No. 14 of 2009 Public-Private Partnership

Single stageand twostageproceduresforrequestingtechnicalproposals

Content ofrequest fortechnicalproposals

26. (1) After the evaluation of the pre selection bids, thecontracting authority shall submit a report for approval to the Unit,demonstrating 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 concessionaires

and their proposed mechanisms and procedures toeffectively implement, manage, enforce, monitor andreport on the proposed infrastructure project and facility;and

that a satisfactory due diligence including a legal duediligence has been completed by the Unit and the selectedconcessionaires in relation to matters 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 requestfor technical proposals and related documents issued in accordancewith section twenty-eight 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 proposalsfrom pre selected bidders when the contracting authority does notconsider it to be feasible to describe the characteristics of the projectin the request for technical proposals.

Where a two stage procedure is used, the following shallapply:

the 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 maincontractual terms proposed by the contracting authorityor Unit;

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

(c) following evaluation of the technical proposals received,the contracting authority may review and, as appropriate,revise 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,


including the main contractual terms and any criterionfor evaluating technical proposals and ascertaining thepreferred bidder, as set out in the initial request fortechnical proposals;the contracting authority shallindicate in the record of the selection proceedings, tobe kept pursuant to section thirty-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 theprocedure, the contractingauthority, shall invite thebidders to submit final proposals with respect to a singleset of project specifications, performance indicators orcontractual terms in accordance with sections twentyeight through to section thirty-four.

28. To the extent not required by, or under, the PublicProcurement Act, 2008, a request for technical proposals shallinclude the following:

general information as may be required by the biddersin order to prepare and submit their proposals;

project 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 authorityor Unit including an indication of which terms areconsidered to be non negotiable; andcriteria for evaluating technical proposals, and thethresholds, if any, set by the contracting authority foridentifying non responsive proposals, the relative weightto 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 therequirements with respect to the issue of, and the nature, form,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) withdrawal or modification of a technical proposal afterthe deadline for submission of proposals and, if sostipulated in the request for technical proposals, beforethat deadline;

Content ofrequest fortechnicalproposalsAct No. 12of 2008

Bid securities


failure to enter into final negotiations with the contractingauthority 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 tosubsection (2) of section thirty-four:

failure to sign the agreement, if required by the contractingauthority to do so, after the technical proposal has beenaccepted; or

failure to provide the required security for the fulfillmentof 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.

Clarifications 30. (1) A contracting authority may, whether on its ownand initiative or as a result of a request for clarification by a bidder,modifications

review 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 theselection proceedings to be kept pursuant to section thirty-ninethe 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.

Evaluation 31. (1) Thyriteria for evaluating technical proposals shallcriteria include the following:

technical soundness;compliance with environmental standards under any law;operational feasibility;quality of services and measures to ensure their continuity;

and(e) any other prescribed criteria.

(2) The criteria for evaluating financial and commercialproposals shall include, as appropriate:

the present value of proposed user levies, unit prices,and other charges over the agreement 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 capitalcosts and operating and maintenance costs;


the 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 contractual

termsproposed by the contracting authority in the requestfor technical proposals;

the social and economic development potential offeredby the technical proposals; and

any other prescribed criteria.

32. (1) A contracting authority shall evaluate each technical Evaluationproposal in accordance with the of technical

evaluation criteria, the relative weight accorded to each such proposalcriterion and the evaluation process set out in the request fortechnical proposals.

For the purposes of subsection (1), a contracting authoritymay establish thresholds with respect to quality, technical, financialand commercial aspects of the proposal.

For the purposes of subsection (2), the lowest evaluatedbid shall not necessarily be the lowest offered price.

33. (1) A contracting authority may require any bidder that Further has been pre selected to demonstrate again its qualifications in demonstration

accordance with the same criteria used for pre selection. of fulfillmentof

(2) A contracting authority shall disqualify any bidder that qualification

fails to demonstrate again its qualifications if requested to do so. criteria

34. (1) A contracting authority shall rank all responsive Final technical proposals on the basis of the evaluation criteria and invite, negotiations

for 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 negotiablein the final request for technical proposals.

A contracting authority shall, where it becomes apparentto 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 reasonabletime 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 acceptable, it shallterminate the negotiations with the bidder concerned.

(4) Where a contracting authority terminates negotiations undersubsection (3), the contracting authority shall invite the other biddersfornegotiations, in the order oftheir ranking, until the parties concludean agreement or the contracting party rejects all the remainingproposals.


Circumst-ances •authorizingawardwithoutcompetitiveprocedures

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 inthis Part in the following cases:

when there is an urgent need 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 theurgency 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 amountprescribed;

where the project involves national defense or nationalsecurity;

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

(e) where an invitation to the pre selection proceedings or arequest for technical proposals has been issued but noproposals were submitted 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 request for technical proposals is not likely to resultin an infrastructure project or facility award within therequired time frame; or

(f)in any other case where the Unit authorises such anexception for compelling reasons of national or publicinterest.

36. Where an agreement is negotiated without using theprocedures set out in this Part, a contracting authority shall —

(a) except for an agreement negotiated pursuant to subparagraph (c) of section thirty jive, cause a notice, ofits intention to commence negotiations in respect of theagreement, to be published in the prescribed manner;


engage 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 shallbe evaluated and ranked.

(1) A contracting authority and the Unit shall treatproposals in such a manner as to avoid the disclosure of their contentto competing bidders and any discussion, communication ornegotiation between the contracting authority and a bidder shall beconfidential.

(2) Unless required by law or by a court order or permittedby the request for proposals, a party to a negotiation' shall notdisclose, to any other person, any technical or financial matter orany other information in relation to any discussion, communicationor negotiation submitted, received or done, as the case may be,under this Act, 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 tobe published in the prescribed manner.

A notice issued under subsection (2) shall identify theconcessionaire and include a summary of the essential terms ofthe agreement.

A contracting authority shall not award any project or signany agreement unless the—

award of the project has been approved by the Unit; andagreement relating to the project has been approved by

the Council.A contracting authority shall keep an appropriate record

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 contractingauthority under this Act or any other written law, may seek reviewof the contracting authority's acts or failure to act.

41. (1) A contracting authority may require that the preferredbidder establish a legal entity incorporated under the laws of Zambia.

(2) Where a preferred bidder establishes a legal entity inaccordance with subsection (1), the bidder shall make a statementto that effect in the pre selection bidding documents or in the requestfor technical proposals, as appropriate.

Confidenti-ality

Notice ofcontractaward

Record ofselectionand awardproceedings

Reviewprocedures

Organisationofconcessionaire


(3) Any 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'sArticles of Association or any significant changes in the Articlesshall be set out in the agreement consistent with the terms of therequest for proposals.

Unsolicited 42. (1) A contracting authority may receive, consider, evaluateproposal

and accept an unsolicited proposal for a public private partnershipif the proposal —

is independently originated and developed by the proposer;shall be beneficial to the public;has been prepared without the supervision of the Unit or a

contracting authority; andincludes sufficient detail and information for a contracting

authority to evaluate the proposal in an objective andtimely 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 (I).

A contracting authority or the Unit 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 comply with subsection (1), return the proposal withoutfurther action.

A contracting authority may, if an unsolicited proposalcomplies with subsection (1), continue to evaluate the proposal inaccordance with this section.

A contracting authority shall, if an unsolicited proposalcomplies with subsection (1), advertise the unsolicited proposal forthe purpose of receiving competitive proposals for the same project.

An advertisement issued under subsection (6), shall outlinethe general nature and scope of the unsolicited proposal, includingthe location of the project, if appropriate and the work to beperformed on or in connection with the project and shall specify anaddress to which a competing proposal may be submitted.

An advertisement, issued under subsection (6), shall specifya reasonable time period by which competitors shall submit acompeting proposal to the contracting authority.

(9) A contracting authority may charge, the original proposeror any competing proposer, a reasonable fee to cover its costs forprocessing, reviewing and evaluating an unsolicited proposal andany competing proposals, as the case may be.


(10) A contracting authority shall determine if any competing proposal is comparable in

nature and scope to the original unsolicited proposal;evaluate the original unsolicited proposal and any

comparable competing proposal; and(c)conduct any good faith discussions and, if necessary, any

negotiations concerning each qualified proposal.(11) A contracting authority shall evaluate an unsolicited proposal

and any comparable competing proposal using the following criteria:novel methods, approaches or concepts demonstrated by

the proposal;scientific, technical, or socio economic merits of the

proposal;potential contribution of the proposal to the contracting

authority's mission;capabilities, related experience, facilities, or techniques

of the private entity or unique combinations of thesequalities that are integral factors for achieving theproposal objectives;

(e) qualifications, capabilities, and experience of the proposedteam 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.

(12) 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 anycompeting proposal or make a best and final offer and ifthe originator of the proposal does so, the project shallbe awarded to the originator of the proposal;

reject the unsolicited proposal and accept a comparablecompeting proposal if the contracting authoritydetermines that the comparable competing proposal isthe most advantageous to the Government;

accept both the unsolicited proposal and a competingproposal if accepting both proposals is advantageous tothe Government; or

(e) reject the unsolicited proposal and any competing proposal.


Contentsandimplemen-tation ofagreement

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

PART VPUBLIC PRIVATE PARTNERSHIP AGREEMENTS

43. An agreement shall provide for such matters as the partiesconsider 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 ofexclusivity, if any, of the concessionaire's rights underthe agreement;

the assistance that a contracting authority may provide tothe concessionaire in obtaining licences and permits tothe extent necessary for the implementation of theproject;

the return of assets, if any, to a contracting authority, atthe termination or expiry of the agreement, in suchmanner as may be provided for in the agreement, asspecified in section forty five;

(e) procedures for the review and approval of engineeringdesigns, construction plans and specifications by thecontracting authority and the procedures for testing andfinal inspection, approval and acceptance of the project;

f) the Unit's, contracting authority's or other regulatoryagency's right to monitor the works to be performedand services to be provided by the concessionaire andthe conditions and extent to which the Unit, contractingauthority or the regulatory agency may order variationsin respect of the works and conditions of service or takesuch other reasonable actions as they may findappropriate 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 Unit, contracting authority or regulatory agency, asappropriate, 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 publicauthority under this Act including any compensation towhich the concessionaire might be entitled;

slimIlmoriarimimummipuipl


(i) any rights of the Unit or contracting authority to reviewand approve major contracts to be entered into by theconcessionaire, in particular with the concessionaire'sown shareholders or other affiliated persons;

(j)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 event of default of either party;(1) the extent to which either party may be exempt from liability

for failure or delay to comply with any obligation underthe agreement owing to circumstances beyond itsreasonable control;the duration of the agreement and the rights andobligations of the parties upon its expiry or termination;

the manner for calculating compensation under this Actas provided under section sixty-one;

the governing law and the mechanisms for the settlementof disputes that may arise between the Unit orcontracting authority and the concessionaire;

the rights and obligations of the parties with respect toconfidential information;

the relevant financial terms;the sharing of generic risks between the contracting

authority and the concessionaire-the payment to the concessionaire by1 way of compensation

from a revenue fund or of user levies collected by theconcessionaire for a service provided by it as providedunder section forty-eight; and

such other information as may be prescribed. Governinglaw.

Every agreement shall be governed by and construed inaccordance with the laws of Zambia unless otherwise provided inthe agreement.

(1) An agreement shall specify, as appropriate, whichassets are or shall be public property and which assets are or shallbe the private property of the concessionaire.

(2) An agreement shall, in particular, identify which assetsbelong to the following categories:

(a) assets, if any, that the concessionaire is required to returnor transfer to the contracting authority or to anotherentity indicated by the contracting authority inaccordance with the terms of the agreement;

Governinglaw

Ownershipof assets


Acquisitionof rightsrelated toproject site

Financialarrangements

Securityinterest

assets, if any, that the contracting authority, at its option,may purchase from the concessionaire; and

assets, if any, that the concessionaire may retain or disposeof upon expiry or termination of the agreement.

(1) A contracting authority or other public authority, underthe 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 necessary for the implementationof the project .

(2) Any compulsory acquisition of land that may be requiredfor the implementation of a project shall be carried out inaccordance with the Land Acquisition Act.

A contracting authority or other public authority, under theterms of any law and an agreement, shall make available to theconcessionaire or, as appropriate, 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, receiveor collect user levies for the use of an infrastructure facility or itsservices in accordance with an agreement, which shall provide formethods and formulas for the establishment and adjustment of userlevies in accordance with any rules established by the competentregulatory agency.

(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) Subject to any restriction that may be contained in anagreement, a concessionaire shall have the right to create securityinterests over any of its assets, rights or interests, including thoserelating to the project, as shall be required to secure any financingneeded for the project, including, in particular, the following:

security over movable or immovable property ownedby the concessionaire or its interests in project assets;and

a pledge of the proceeds of, and receivables owed to theconcessionaire for, the use of the project or the servicesit provides.

(2) The shareholders of a concessionaire's company shall havethe right to pledge or create any other security interest in theirshares in the company.

Cap. 189

Easements


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

(1) Except as otherwise provided in section forty-nine,the rights and obligations of the concessionaire under an agreementmay 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 acontracting authority shall give its consent to an assignment of therights and obligations of the concessionaire under the agreement,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 theservice 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.

(2) An agreement shall set forth the conditions under whichthe consent of a contracting authority shall be given.

52. (1) An agreement shall set out, as appropriate, the extentof a concessionaire's obligations to ensure—

the modification of the service so as to meet the demandfor the service;

the continuity of the service;the provision of the service under essentially the sameconditions for all users; and

the non discriminatory access, as appropriate, of otherservice providers to any public infrastructure networkoperated by the concessionaire.

(2) A concessionaire shall have the right to issue and enforcerules governing the use of the infrastructure facility, subject to theapproval of the appropriate contracting authority or regulatoryagency.

53. 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, ascompared with the costs and the value of performance originally

Assignmentofagreement

Transfer ofcontrollinginterest inconcess-ionaire

Operation ofinfrastructurefacility

Compensat-ion forspecificchanges inlegislation


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) Without prejudice to section sixty three, anagreement shall set out the extent to which a concessionaire isentitled to a revision of the agreement with a view to providingcompensation in the event that the cost of the concessionaire'sperformance of the agreement has substantially increased or thatthe value that the concessionaire receives for such performancehas substantially diminished, as compared with the costs and thevalue of performance originally foreseen, as a result of—

changes in economic or financial conditions; orchanges in legislation or regulations not specifically

applicable to the project or the services it provides:Provided that the economic, financial, legislative or

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

(iii) are of such a nature that the concessionaire couldnot reasonably be expected to have taken theminto account at the time the agreement wasnegotiated 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 thecircumstances set out in an agreement, to temporarily take overthe operation of an infrastructure 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 concessionaire in the performance of its obligations and torectify 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 authority —

shall collect and pay any revenues that are subject to liento satisfy any obligation;

may develop and operate the project, impose user leviesand comply with any service contract existing; and

(c) may solicit proposals, as appropriate, for the construction,maintenance or operation of the infrastructure project.


(1) The Unit may agree with any entity extendingfinancing for a project and a concessionaire to provide for thesubstitution of the concessionaire with another person appointed toperform under the existing agreement, upon a material default bythe concessionaire or other event that could otherwise justify thetermination of the agreement.

(2) The Government may facilitate a concessionaire tosecuritise any project receivables and assests in favour of a lendersubject to such terms as the Government may determine in orderto safeguard the successful implementation, completion, working,management 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 followingcircumstances:

delay in completion or interruption of operation due tocircumstances beyond .the reasonable control of eitherparty;

project suspension brought about by acts of the Unit or acontracting authority or other public authority;

increase in costs arising from requirements of the Unit ora contracting authority not originally foreseen in theagreement, if the concessionaire would not be able torecover such costs without such extension; oron agreement with the concessionaire, for reasons ofnational or public interest, as justified in the record to bekept by the Unit.

58. A contracting authority or the Unit may terminate an Terminationagreement of

in the event that it can no longer be reasonably expected agreement

that the concessionaire will be able or willing to perform bycontractingits obligations, owing to insolvency, material default or authority

otherwise; orfor compelling reasons of national or public interest, subject

to payment of compensation to the concessionaire asagreed in the agreement.

59. A concessionaire shall not terminate an agreement except Terminationunder the following circumstances: of agreement

in the event of material default by the Unit or a contracting byconcessionaireauthority or other public authority of its obligations under

the agreement;if the conditions for a revision of the agreement undersubsection( I) of sectionfifiy-four are met but the partieshave failed to agree on a revision of the agreement; or

Substitutionofconcessionaire

Durationandextension ofagreement


Terminationof agreementby eitherparty

Compensationuponterminationof agreement

Managementof publicprivatepartnership

Winding 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 result of acts or omissionsof the Unit or a contracting authority or other publicauthority 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 reasonablecontrol.

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 agreement, costsincurred 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.

An agreement shall provide, as appropriate, for —mechanisms and procedures for the transfer of assets toa contracting authority in case of a winding up;

the compensation to which the concessionaire may beentitled in respect of assets transferred to a contractingauthority or to a new concessionaire or purchased by acontracting authority;

the transfer of technology required for the operation of aproject;ect;

the training of a contracting authority's personnel or of asuccessor concessionaire in the operation andmaintenance of project; and

(e) the provision, by the concessionaire, of continuing supportservices and resources, including the supply of spareparts, if required, for a reasonable period after thetransfer of the project to a contracting authority or to asuccessor concessionaire.


PART VISETTLEMENT OF DISPUTES AND GENERAL PROVISIONSAny disputes between the Unit or a contracting authority Disputes

and the concessionaire shall be settled through the dispute settlement contractingntracting mechanisms agreed by the parties in the agreement or, failing such authority or

agreement, in accordance with the Arbitration Act, 2000. Unit andconcessionaireAct No. 19 of2000

The Unit may, where a concessionaire provides services Disputes to the public or operates an infrastructure facility which is accessible involving

customers or to the public, require the concessionaire to establish simplified and users

efficient mechanisms for handling claims submitted by its customersor users of the infrastructure facility.

66. (1) The Minister may, by statutory instrument, make Regulationsregulations for the carrying out of the purposes of this Act.

(2) Without prejudice to the generality of subsection (1), theMinister may make regulations for—

any thresholds relating to the procurement process;any matter relating to competitive public bidding and direct

negotiations;mechanisms for settling of disputes under this Act;the imposition, revision and collection of user levies; and

(e) anything that is required to be prescribed under this Act.

67. (1) Where an agreement was entered into before the Savingscommencement of this Act, and that agreement or arrangementwould have been a public-private partnership arrangement if thisAct was in operation on such date, then the agreement shall haveeffect 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.


FIRST SCHEDULE(Sections 3 and 4)

Build andTransfer(BT)

Build LeaseandTransfer(BLT)

BuildOperate andTransfer(BOT)

INFRASTRUCTURE PROJECTS AND FACILITIESThe following public private partnership arrangements with their

variations and combinations may be entered into by the Unit orcontracting authority for undertaking any project. The arrangementsenumerated in this Schedule are indicative in nature and the Unitor contracting authority may evolve and arrive at such agreementor arrangement incorporating any of the arrangement enumeratedhereinafter or any other arrangements as are necessary or expedientfor 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 wouldreimburse 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.

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 transferredto the Government or the contracting authority concerned.

3. A 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 duringwhich the concessionaire is allowed to collect user levies fees,rentals and other charges not exceeding those proposed in the bidor as negotiated and incorporated in the agreement or regulationsto enable the recovery of the investment in the project. Theconcessionaire transfers the project to the Government or thecontracting authority concerned at the end of the fixed term thatshall be specified in the agreement. This shall include a supply andoperate situation which is a contractual arrangement whereby thesupplier of equipment and machinery for a given project, if theinterest of the Government or the contracting authority so requires,operates the facility providing in the process technology transfer


and training to Government, regulatory agency or the contractingauthority nominated individuals.

A contractual arrangement whereby a concessionaire isauthorised to finance, construct, own, operate and maintain a projectfrom 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 Government or the contracting authorityis 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 projectand 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 Government or the contracting authorityafter 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 basis, assuming costs overruns,delays and specified performance risks. Once the facility iscommissioned satisfactorily, the concessionaire isgiven the right to operate the project and collect user levies underan agreement. The title of the project always vests with theGovernment or the contracting authority in this arrangement.

A contractual arrangement whereby the concessionaire addsto an existing project which it rents from the Government or acontracting authority and operates the expanded 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 added facility provided by the concessionaire.

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 rentvalues.

Build Ownand Operate(BOO)

Build OwnOperateTransfer(BOOT)

BuildTransfer andOperate(BTO)

Contract Addand Operate(CAO)

DevelopOperate andTransfer(DOT)


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 franchise period, at the expiry of which the facility isturned over to the Government or a contracting authority. Theterm 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 with notime limitation imposed on ownership. As long as the concessionaireis not in violation of its franchise, it can continue to operate thefacility and collect user levies in perpetuity.

A contractual arrangement whereby a concessionaireundertakes to finance, construct, operate and maintain a projectand 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 acontracting authority leases a project owned by the Government tothe person who is permitted to operate and maintain the project forthe period specified in the agreement and to charge user chargestherefor.

A contractual arrangement whereby the Government or acontracting authority entrusts the operation and management 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 same either itself or entrust the collection,for consideration, to any person who shall after collecting the usercharges pay the same to the Government or the contractingauthority.

A contractual arrangement whereby an existing project isvested in a person to renovate, operate and maintain. Theconcessionaire shall be permitted to charge levies as specified inthe agreement.

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


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

SECOND SCHEDULE(Section 6 (2))

ADMINISTRATION OF THE COUNCIL1. (1) Subject to the other provisions of this Schedule, a

member 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.

Subject to the other provisions of this Schedule, a membershall, on the expiration of the period for which the member isappointed, continue to hold office until another member is appointedto succeed that member.

The office of a member becomes vacant —upon the member's death;if the member 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 Council;

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

(e) if the member becomes mentally or physically incapableof performing the duties of a member of the Council; or

(f)if the member is convicted of an offence involvingdishonesty or fraud under this Act or any other writtenlaw.

A member may resign from office by giving not less thanone month's notice in writing to the President.

The President shall, where the office of a member becomesvacant, appoint another member in place of the member who vacatesoffice, and such member shall hold office for the remainder of theterm.

SupplyOperate andTransfer

Tenure ofoffice andvacancy


Proceedings 2. (1) Subject to the other provisions of this Act, the Council

of may regulate its own procedure.Council (2) The Council shall meet for the transaction of business, at

least once in every three months at such places and times as theChairperson may determine.

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

If the urgency of any particular matter does 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.

There shall preside at any meeting of the Council—the Chairperson;

in the absence of the Chairperson, the Vice-Chairperson;and

(c) in the absence of both the Chairperson and the Vice-Chairperson, such member as the members present mayelect from amongst themselves for the purpose of thatmeeting.

A 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 an equality of votes, the person presiding at themeeting shall have, in addition to a deliberative vote, a castingvote.

The Council may invite any person whose presence in itsopinion is desirable to attend and to participate in the deliberationsof a meeting of the Council but such person shall have no vote.

The 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 member orby reason that any person not entitled so to do, took part in theproceedings.

The Council shall cause minutes to be kept of theproceedings of every meeting of the Council and every meeting ofany sub-committee established by the Council.

Committees 3. (1) The Council may, for the purpose of performing its.of functions under this Act, constitute any committee and delegate toCouncil any such committee such of its functions as it thinks fit.

(2) The 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 determine.


(3) A committee of the Council may regulate its own procedure.There shall be paid to members of the Council such Allowances

allowances as the Council may, with the approval of the President, ofdetermine. members

(1) A member or person who is present at a meeting of Disclosure of the Council at which any matter, in which that person or any member interest

of the person's immediate family, is directly or indirectly interestedin a private capacity, is the subject of consideration, shall, as soonas is practicable after the commencement of the meeting, disclosethat 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) A disclosure of interest made under this paragraph shall berecorded in the minutes of the meeting at which it is made.

6. (1) A person shall not, without the consent in writing given Prohibition of by or on behalf of the Council, publish or disclose to any unauthorised publication person, otherwise than in the course of duties of that person, the of, or contents of any document, communication or information disclosure of whatsoever, which relates to or which has come to the knowledge information of that person in the course of that person's duties under this Act. to

unauthorisedA person who contravenes sub-paragraph (1) commits an persons

offence and is liable, upon conviction, to a fine not exceeding twohundred thousand penalty units or to imprisonment for a term notexceeding two years, or to both.

A 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 twohundred thousand penalty units or to imprisonment for a term notexceeding two years, or to both.

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