Home       Top Rated       Submit Article     Advanced Search     FAQ       Contact Us       Lawyers in India       Law Forum     RSS Feeds     

Register your Copyright Online

We offer copyright registration right from your desktop click here for details.

Latest Articles | Articles 2014 | Articles 2013 | Articles 2012 | Articles 2011 | Articles 2010 | Articles 2009 | Articles 2008 | Articles 2007 | Articles 2006 | Articles 2000-05

Search On:Laws in IndiaLawyers Search

Mutual Consent Divorce in Delhi
We provide fast, cost effective and Hassle free solution.
Contact us at Ph no: 9650499965 (Divorce Law Firm Delhi)

E-mail login                       Password
     

Free Email Sign Up

Main Categories
 Accident Law
 Arbitration
 Aviation Law
 Banking and Finance laws
 Case Laws
 Civil Laws
 Company Law
 Constitutional Law
 Consumer laws
 Contracts laws
 Criminal law
 Drug laws
 Dubai laws
 Educational laws
 Employment / Labour laws
 Environmental Law
 family law
 Gay laws and Third Gender
 Human Rights laws
 Immigration laws
 Insurance / Accident Claim
 Intellectual Property
 International Law
 Juvenile Laws
 Law - lawyers & legal Profession
 Legal Aid and Lok Adalat
 Legal outsourcing
 Media laws
 Medico legal
 Miscellaneous
 Real estate laws
 Right To Information
 Tax Laws
 Torts Law
 Woman Issues
 Workplace Equality & Non-Discrimination
 Yet Another Category

More Options
 Most read articles
 Most rated articles

Subscription
Subscribe now and receive free articles and updates instantly.

Name
Email



Copyright Registration

To Copyright Your Books, Videos, Songs, Scripts etc
Call us at: 9891244487 / or email at: admin@legalserviceindia.com
Top Law Colleges

Law Updates:

# Income-Tax
# Family law
# Company Law
# Constitutional Law
# Partnership firms
# Immigration Law
# Cyber Law
# Lok Adalat, legal Aid & PIL
# Forms
# Trademarks
# Woman issues
# Medico Legal
# Consumer laws
# Criminal laws
# Supreme Court Judgments


Published : February 15, 2013 | Author : gauravsharma
Category : Contracts laws | Total Views : 6263 | Rating :

  
gauravsharma
Gaurav Sharma, (ADVOCATE) B.A LL.B (H), PGDCLM (ILI, Delhi), MBA - LL.M (Pursuing) National Law University, Jodhpur, (Raj.) V Semester
 

1.1.Company Background
Jaypee Infratech Limited ("JIL"/"the Company"/"Concessionaire") is a Special Purpose Vehicle (SPV) promoted by Jaiprakash Associates Ltd., the flagship company of Jaypee group to construct the 6-lane access controlled expressway (extendable upto 8-lane) from Noida to Agra in the state of Uttar Pradesh ("Yamuna Expressway"/"Expressway"). Yamuna Expressway Industrial Development Authority (YEA), the nodal agency set up by Government of UP to plan and construct the proposed expressway connecting the city of Agra with Noida, has also granted the Concessionaire the rights to develop 25 million sq. metres of land along the proposed Expressway for commercial, amusement, industrial, institutional and residential development. YEA followed international competitive bidding process for the selection of Concessionaire for the expressway project on the lowest concession period of 36 years from the date of COD quoted by Jaypee Group, the project was awarded to them in January 2003. As per the Concession Agreement (CA) executed in February 2003, the Concessionaire shall develop and build the Expressway in a period of 7 years and maintain, collect toll on the same for a period of 36 years from COD. The Concessionaire could not commence the construction of the Expressway immediately following award of the project because of the delay in land acquisition. YEA subsequently started transferring land to the Company in 2006 and the Company commenced th construction of the Expressway from January 2008.

1.2 Proposed project before its construction
The project envisages construction of access controlled 6-lane (extendable upto 8 lane) concrete pavement Expressway connecting the city of Agra and Noida. The Expressway is a virgin alignment and is proposed to take off on the existing Noida-Greater Noida Expressway near the PGA standard Jaypee Greens Golf Course. Thereafter, it passes by the side of Gautam Budh University at Kasna, proposed Taj Economic Zone and Taj International Hub Airport, Aligarh-Khair-Palwal road near Tappal, Hathras-Raya-Mathura road near Raya, Mathura-Sadabad road and ends near NH2 at Etmadpur village which is about 165.537 Km from the zero point. It may be noted that as per the CA, the length of the Expressway is envisaged to be 160 km. However, as per the DPR accepted by the YEA, the length of the expressway is envisaged to be 165.537 Km based upon the actual alignment. YEA has already handed over all the land (3991 acres) required for the construction of the expressway and approx 41 acres out of 753 acres for the interchanges/structures to the company. YEA is in the process of acquiring the remaining land required for the interchanges. The cost estimated for the acquisition of remaining land has also been incorporated in the project cost. Company has already paid Rs. 831 crores out of Rs. 900 crores required to be paid to YEA for the above land. In addition, the CA also provides that YEA shall grant the Concessionaire rights for development of 2500 hectares (6175 acres) of land at five different locations along the Yamuna Expressway to generate the non-toll revenue in the form of real estate development. As per the CA, the said land shall be made available by YEA to the Concessionaire at the actual acquisition cost.

1.3 Sponsor overview
Jaiprakash Associates Limited (JAL)
Jaiprakash Associates Limited is a part of Jaypee group, which had a turnover in excess of USD $ 1 bn in FY 2009. It holds 98.86% shareholding in JIL. Jaiprakash Associates Limited, promoted by Shri Jaiprakash Gaur and his associates, is the flagship company of Jaypee Group (the Group). The Group is a diversified industrial group with significant interests in the areas of civil engineering & construction, cement manufacturing, power, real estate & expressways, hospitality & golf courses and education. The group has net assets in excess of Rs. 20,000 crore and net worth to the tune of Rs. 6,000 crore.

1.4 Project cost and funding structure
The total cost of completion of the project is estimated at Rs. 9739.29 crore. The same is proposed to be funded through a Debt: Equity mix of 1.60. The total equity contribution for the project is proposed at Rs. 3739.29 crore, which includes Rs. 1489.29 crore of real estate surpluses during construction period. Out of the total debt requirement of Rs. 6000 crore, JIL has already tied up Rs. 3000 crore from ICICI Bank and has approached ICICI Bank, Axis Bank and SBICAP for raising the balance senior debt requirement aggregating Rs. 3000 crore by way of rupee terms loans. The Average Debt Service Coverage Ratio (DSCR) is projected at 2.38.

Revised Cost and means of finance:
2. Concessionaire Contract And Lease Agreement: Meaning And Concept
Ø Concessionaire Contract
Ownership of public assets is a sensitive issue for all governments. However, budgetary shortfalls as well as the repeated failure of governments all over the world to maintain these assets have forced them to change their attitude towards private ownership of such assets. As a result, policymakers have devised various ways in which the private sector can be brought in to maintain and operate public assets. Thus, concession contracts, through which ownership rights continue to reside with public authorities save operation rights and associated returns being transferred to private players, have been gaining popularity around the world. Under concession contract, private partner gets exclusive rights from the government to operate, maintain and sometimes even carry out investment in a public utility for a given period of time. In return, the private party pays either a fixed sum, a percentage of revenue from the utility or a combination of the two to the government for exclusive rights over a facility. Revenue to the private party comes from the user fee charged to users of the facility. There are different types of concession contracts, including: ex-leasing, franchise, build-operate- transfer (BOT) etc. Private finance initiatives (PFIs) may also be considered similar to concessions. The major advantage of a concession is that it allows certain public assets, for which private ownership is economically inefficient and politically not possible, to be maintained and operated efficiently by private players. Bidding for concession contracts introduces competition into the industry, albeit in an artificial sense. Such competition often induces private players to minimise cost, as one of the criteria used for awarding a concession is price cap regulation, in which they need to state the minimum price they would charge for services provided. Finally, in concession, competition between firms occurs before investment commitment that generally creates enough space for optimal pricing. On the negative side, concessions require complex design and monitoring systems: thus, they are difficult to implement. Moreover, it is not possible for a concession contract to cover all uncertainties involved; this implies that fixing one price over the period of contract often turns out to be unviable and creates space for renegotiation and its abuse. Furthermore, there are no incentives for the private party to maintain the facility well or undertake necessary investment towards the end of the contract period.

2.2 How do concessionaire works?
"Concession contracts are typically defined by the following four features:
1. The contract governs the relationship between the concession-granting authority and the private concessionaire. The concession-granting authority is the government, an inter-ministerial commission, or less common – and the least appropriate – the regulatory agency.

2. The concession is awarded for a limited but potentially renewable period, during which concessionaire enjoys the exclusive right to use the assets, exploit existing facilities, and develop new ones. The contract determines conditions under which concessionaire uses these facilities and the prices at which it provides the service. The facility continues to be publicly owned.

3. The concessionaire is responsible for all investments and for developing all new facilities – many of which are specified in the contract – under the supervision of state or regulator. The concessionaire retains control and use rights over the new assets until they are handed over at the expiration of the contract. The contract might contain a clause specifying compensation for investments not fully amortised by the end of the concession period, and clauses specifying causes and remedies for early termination of contract and stating penalties and fines for non-compliance with agreed upon terms.

4. The concessionaire is remunerated based on contractually established tariffs (with appropriate guidelines for review and adjustment) collected directly from users. These prices are typically regulated through rate-of-return or price-cap mechanisms, usually driven by the principle of “efficient financial equilibrium” – allowing the firm to earn a fair rate of return on its investments. If revenues do not cover costs, compensation mechanisms are established

Given a wide range of settings in which they are used, concessions are often far more complicated than these basic features suggest. Concession contracts also usually contain other obligations and rights that require regular regulatory oversight in monitoring compliance, reconciliation of interpretations, adjustment of tariffs in the event of contingency, periodic (usually quinquennial) tariff reviews, and renegotiation of triggers and terms. The government’s role thus involves setting rules for competition at the bidding stage and enforcing terms of agreement and compliance with regulations"

Flowchart 1: A Typical Framework of a Concession Contract
Awarding Process
Selection of Concessionary
Constructing/Building the Asset
Start of Actual Functioning of the Asset
(Status of the asset is A)
Final Evaluation at the End of the Concession period
Returning the Asset Back to the Government or
Renewing the Concession or Re-bidding (Status of the asset is B)

2.3 Awarding Concession
Generally, the awarding process has to be competitive to ensure efficiency. The common trend is to follow a competitive bidding process. However, in some exceptional situations the government has to go for direct award of the concession or through bilateral negotiations. Thus, there are two ways of awarding concession – direct award and competitive bidding.

Bilateral negotiation: is considered to be less efficient compared to competitive bidding as the concessionaire selected through this process may not be the best available in terms of ability to manage the given public asset. He may not be the one likely to

pay the highest concession fee or charge the most efficient rent from the consumer. Therefore, ‘bilateral negotiations’ to award concessions should be avoided, except when there is only one candidate for a concession.

Competitive bidding: is the most commonly followed practice throughout the world, and is used to find the most efficient firm in the market. The process starts with some pre-qualification of potential buyers based on financial and technical criteria that reduce the number of bidders, but at the same time lower the risk of non-compliance by a defective bidder. However, when compared to bilateral negotiations, competitive bidding is associated with a higher probability of renegotiation. This is because bidders under a competitive bidding process often tend to quote tariffs that are less than the long run marginal cost of providing the service. As a result, they often try to renegotiate tariff levels during the contract period.

2.4 Selection of Concessionaire
Once the concession is awarded through competitive bidding, next stage is the selecting concessionaire, which is based on an open competitive bidding. After specifying important parameters (technical and non-technical), the short listed bidders are asked to bid on various factors depending on the nature of the project. For instance, under highway projects, bidders are allowed to bid on the amount of grants sought by them. And one who states the lowest amount wins the bid. If the crucial variable is the concession fee, then the one who states the highest concession fee is the winner. And if the project is on a revenue sharing basis, then the bidder, who offers the highest revenue, share will be the winner. In some projects a bidder who asks for the lowest amount of subsidy for the concession period gets the tender if certain other conditions are satisfied. Other criteria used are minimum duration of the concession, largest investment value, minimum total revenue, largest number of retained workers, and the best overall proposal etc. Sometimes multiple criteria are also used to select the concessionaire. In such cases, combinations of two or more criteria are used in selecting the concessionaire.

2.5 Concession period
Concession period is determined by factors, which are project specific such as capacity of the asset to generate revenue, user tariffs, total investment, depreciation and operation and maintenance cost of the asset etc. For example, in port related projects, determining factors for the length of concession would be the capacity of the port terminal to handle cargo and average demand for port services. In case demand is uncertain in nature, a long concession period is preferred to mitigate the risk. Concession period usually reflects the number of years required to recover the investment. For long duration concessions, fixing a particular time period for full amortisation is usually not feasible as infrastructure services require continuous investments that cannot be predicted well in advance; investments almost always must be made toward the end of the contract and cannot be amortised before its expiration.

2.6 Reversal of Assets
Returning the asset back to the government in good condition is a crucial stipulation of the concession agreement. Once quality of the asset is ensured, government can either take over the asset or go for re-bidding. In India, however, most projects based on concession agreements are either at a preliminary stage or halfway through their concession periods. There is hardly any information available on projects, for which the first concession period is over. As a result, there is not much awareness about how exactly reversal of assets is carried out in infrastructure projects. However, some questions are still to be explored: what happens to the asset once the government takes it over? How does the government decide which assets will go for rebidding and which ones will be run by the government itself? How does the government ensure quality of service when it takes over the assets?

3. CONTRACTUAL DOCUMENTS INVOLVED IN YAMUNA EXPRESSWAY PROJECT

3.1 Concessionaire contract

(a) The concession contract grants JIL the following rights –


· Develop, design, engineer, finance, procure and construct the Yamuna Expressway;

· Upon completion of the Expressway and during the Concession Period, manage, operate & maintain the Expressway and regulate the use thereof by third parties;

· Demand, manage and collect appropriate Fees from vehicles and persons liable to payment of Fees for using the Yamuna Expressway or any part thereof and refuse entry of any vehicle to the Yamuna Expressway if the due Fees is not paid;

· The Concessionaire shall be granted, by YEA, rights for land development of 2500 hectares of land along the proposed Yamuna Expressway for commercial, amusement, industrial, institutional and residential development. The land for the purpose of development is being provided by YEA along the Yamuna Expressway at five or more locations. The aforesaid land for development shall be in addition to the land for construction of Yamuna Expressway;

· YEA shall grant leave and license to the Concessionaire to use the expressway between Noida Toll Bridge and Greater Noida, already constructed and opened for general public by GOUP. The Concessionaire shall be entitled to collect an retain the fee from the users of the expressway between Noida and Greater Noida during the term of the Concession Agreement;

The concession period for the project is thirty-six years (36 years) from the COD. The construction period as per the executed CA is 7 years from the date of the CA, with provision for extension. Since the Project has been delayed due to delay in land acquisition, JIL approached YEA for extension of the construction period and the same has been extended upto April 2013. This instant appraisal assumes a construction period of 39 months ending on 31 0 march 2011. JIL shall have the right to toll the traffic as soon as it receives Completion or the Substantial Provisional Completion Certificate from YEA.

(b) Land Details and handling over schedule as per C.A
Land for Yamuna Expressway
The Yamuna Expressway, in terms with the CA, has been contemplated to be developed in three phases as under:

PHASE

DISCRIPTION

PHASE 1

Expressway stretch between Greater Noida and the proposed Taj International Airport.

PHASE 2

Expressway stretch between the proposed Taj International Airport and an intermediate destination between the proposed Taj International Airport and Agra as may be mutually agreed between the Parties.

PHASE 3

Expressway stretch between the aforesaid intermediate destination and Agra.

In accordance with the envisaged Phases, the land for the Yamuna Expressway would be released as per the following stages:

STAGE

REMARKS

STAGE 1

Land for Phase 1 of the Yamuna Expressway within 6 months of finalization of Alignment of the Yamuna Expressway.

STAGE 2

Land for Phase 2 of the Yamuna Expressway within 12 months of finalisation of Alignment of the Yamuna Expressway.

STAGE 3

Land for Phase 3 of the Yamuna Expressway within 18 months of finalisation of Alignment of the Yamuna Expressway.

(C) Main obligation of JIL as per C.A
· Design, engineer, procure, construct, finance, complete and maintain the Project on BOT basis in accordance with the provisions of the CA;

· Make necessary and appropriate financial arrangements for implementation o different phases of the Yamuna Expressway project;

· Obtain necessary approvals / clearances;

· Make its own arrangement for quarrying, observe and fulfil the environmental and other requirements under Applicable Laws and Applicable Permits at its own cost and expense;

· Be responsible for soundness and durability of the Expressway ;

(D) Main obligation of YEA as per C.A
· Provide to the Concessionaire the Site and the right of way and access to the Site, free from Encumbrance and permit peaceful use of the site by the Concessionaire under and in accordance with the provisions of the CA;

· Assist and provide support to JIL in obtaining Applicable Permits;

· Enable access to vacant site free from all encumbrances;

· Assist the Concessionaire in obtaining access to all necessary infrastructure facilities and utilities;

· Ensure that external development comprising among others electricity supply, water supply, drainage arrangements etc. in relation to land already developed in Noida and Greater Noida is completed by YEA without any cost to the Concessionaire;

· Undertake external development of undeveloped land or assist the Concessionaire in getting the external development done through other authorities;

· Ensure that the expressway between Noida Toll Bridge and Greater Noida is completed in all respect by Noida/ Greater Noida Authority and transferred by Noida/Greater Noida Authority to YEA and handed over to the Concessionaire before COD;

(E) Project Development and Operation as per C.A
Use and Development of the Site
YEA grants to the Concessionaire during the Construction Period and the Concession Period the right to enter upon the Site to survey, design, procure, construct, operate and maintain the Yamuna Expressway including other facilities in accordance with the provisions of the CA.

Monitoring and supervision of construction
In terms of the provisions of the CA, the Concessionaire is required to submit to YEA monthly progress reports of actual progress of the works on the Yamuna Expressway. YEA or its representatives are entitled to inspect the works and may issue inspection reports. The Concessionaire is required to take prompt remedial action in case such reports of YEA point out any deficiencies.

Completion
The execution of the Yamuna Expressway shall be deemed to be complete and can be opened for traffic on issuance of Completion Certificate or Substantial Completion Certificate. YEA shall issue the Completion Certificate or Substantial Completion Certificate, as the case may be, after the Concessionaire as per the direction of YEA has carried out Tests. The relevant Tests would be undertaken in accordance with relevant I.S. Code / Standard Practices.

Operation and Maintenance
The Concessionaire shall operate and maintain the Yamuna Expressway by itself or through Operation and Maintenance Contractors (O&M Contractors) and if required repair or otherwise make improvements to the Yamuna Expressway to comply with specifications and standards and other requirements set for the in the CA. Further, the Concessionaire is required to:

· Permit safe, smooth and reasonably uninterrupted flow of traffic during normal operating conditions;

· Charge, collect and retain the Fees in accordance with the provisions of the CA;

· Minimize disruption to traffic in the event of accidents or other incidents affecting the safety and use of the Yamuna Expressway by providing rapid and effective response and maintaining liaison procedures with emergency services;

· Undertaking routine maintenance including prompt repairs of pot holes, cracks, joints, drains, lighting and signage;

· Undertake major maintenance such as resurfacing of pavements, repairs and refurbishment of tolling systems and hardware and other equipment;

· Carry out periodic preventive maintenance to the Yamuna Expressway, including tolling system;

· Adhere to safety requirement.

(F) Other important provisions of C.A
· The CA provides that YEA, GOUP or any other government organization or local body, shall not construct and operate either itself or have the same, interalia, built and operated on BOT basis or otherwise, any expressway or other road between, interalia, Noida and Agra "Competing Road Facility" without mutual agreement of YEA and the Concessionaire, if construction of such a facility in anyway, is likely to adversely affects the revenue of the Concessionaire. In case a Competing Road Facility is provided and it is found by the Concessionaire that it is adversely affecting the revenue of the Concessionaire, then the CA provides for extension of the Concession Period so as to place the Concessionaire in the same financial position as it would have occurred had there been no Competing Road Facility.

· CA entitles the Concessionaire to transfer or handing over of possession of land given by YEA to the Concessionaire for development, either in part or in full, by executing license / lease deed / sub-lease deed / or any document, as may be appropriate and required for development of said land

· CA entitles the Concessionaire to mortgage, pledge or hypothecate the land for development and Yamuna Expressway and the assets created thereon to the Financial Institutions and other lenders for financial assistance;

(G) Force Majeure event under C.A
The Force Majeure (FM) events under the concession are classified into three categories viz. Non-political FM events, political FM events and indirect Political FM events. The concession further provides for following payments for termination due to JIL under the FM events:

Termination Payment under various Force Majeure events

FM Events

Event

Termination payment

Non-Political

 

 

 

 

 

 

 

Indirect Political

(a)    Acts of God or events beyond the reasonable control, exceptionally adverse weather conditions, lightning, earthquake, cyclone, flood, volcanic eruption or fire or landslide,

(b)   Radioactive contamination or ionizing radiation,

(c)    Strikes or boycotts,

(d)   Inability of the Contractor to fulfil its obligations due of any Non-Political Event, Non-political

(e)    Any judgment of a competent jurisdiction or statutory authority in India made against the Concessionaire for reasons other than failure of the Concessionaire to comply with the provisions of the CA, etc.

 

 

(a)    An act of war, invasion, conflict or act of foreign blockade, embargo, insurrection, terrorist or action, armed enemy, riot, military

(b)   Civil commotion or politically motivated sabotage which prevents collection of Fees,

(c)    Industry wide or state wide or India wide strikes or industrial action which prevent collection of Fees

(d)   Any public agitation which prevents collection of Fees

 

In respect of land for Development

(a)    The rights of the Concessionaire in relation to the land for development to the extent such land has been transferred to the Concessionaire shall not be affected and shall survive. However, subject to the foregoing, the Concessionaire shall not be entitled to any further land for development after termination of the CA.

(b)   The Concessionaire shall have the option to return to YEA, part or full land already transferred by YEA to the Concessionaire. Should the Concessionaire opt to return to YEA any such land (either in part or in full), YEA shall pay to the Concessionaire:

(i)                 Acquisition cost of the land paid by the Concessionaire;

(ii)               All the development costs, including but not limited to the cost of development of land, construction of buildings and roads, and other facilities;

(iii)             All the incidental costs including liabilities created on the Concessionaire on account of the Termination of the CA;

(iv)             Financing cost including interest @ SBI PLR plus two percent on the costs under (i), (ii) & (iii) above.

c) YEA shall also be responsible and liable to refund all payments us may be have been made by the Concessionaire

towards such land for acquisition which

is not transferred to the Concessionaire.

 

In respect of Yamuna Expressway

The land for Yamuna Expressway along with the construction done on this land shall be transferred by the Concessionaire to YEA and YEA shall pay to the Concessionaire:

(a)    Acquisition cost of the land paid by the Concessionaire;

(b)   All development costs, including but not limited to the cost of development of land, cost of works executed on the land and cost of other facilities;

(c)    All incidental costs including liabilities created on the Concessionaire on account of the Termination of the CA;

(d)   Financing costs including interest @ SBI PLR plus two percent on the costs under i), (ii) & (iii) above.

Repayment of Interest free loan

In the event of Termination of the CA due to FM event, the Concessionaire shall not be liable to repay the balance amount of the loan in respect of Noida-Grater Noida Expressway. Jaypee InfratechLimited

Political

(a)    Change in Law,

(b)   Expropriation or compulsory acquisition by any Governmental Agency of any Project Assets or rights of JIL or of the Contractors; or

(c)    Unlawful or unauthorized or without jurisdiction revocation of, or refusal to renew or grant without valid cause any consent or approval required by JIL.

 

(H) Events of Default and termination provision under C.A
If JIL fails to perform its duties under the concession or perform its statutory obligations or construct the project as per the schedule or operate and maintain the project facilities, YEA may instruct JIL to remedy such default within a one hundred and eighty-day period or any longer period as permitted by YEA. If, however, JIL does not remedy its default to the satisfaction of YEA or goes into liquidation, reconstruction or similar process or becomes insolvent, YEA can terminate the agreement by giving a further sixty-day notice period. If as per the CA, YEA has caused Material Adverse Effect on the performance of the Project or YEA repudiates the CA or otherwise evidences an irrevocable intention not to be bound by the CA or Government of India (G01), GOUP or any either Governmental Agency have by an act of commission or omission created circumstances that have Material Adverse Effect on the performance of the Concessionaire, the Concessionaire may give ninety-day Cure Period to YEA or any other agency/ authority in default. Should YEA or such other agency/authority fails to cure the default in the Cure Period, the Concessionaire shall be entitled to terminate the CA by giving a sixty-day notice in writing to the YEA. The CA provides for the following compensation provisions on termination of the concession agreement under various events of termination:

Event of Default

Termination payment

JIL event of Default

In respect of land for Development

(a)    The rights of the Concessionaire in relation to the land for development to the extent such land has been transferred to the Concessionaire shall not be affected and shall survive. However, subject to the foregoing, the Concessionaire shall not be entitled to any further land for development after termination of C.A.

(b)   The Concessionaire shall have the option to return to YEA, part or full land already transferred by YEA to the Concessionaire. Should the Concessionaire opt to return o YEA any such land (either in part or in full), YEA shall pay to the Concessionaire:

(i)                 Acquisition cost of the land paid by the Concessionaire;

(ii)               All the development costs, including but not limited to the cost of development of land, construction of buildings and roads, and other facilities;

(iii)             All the incidental costs including liabilities created on the Concessionaire on account of the Termination of the CA;

(iv)             Financing cost including interest @ SBI PLR plus two percent on the costs under (i), (ii) & (iii) above.

 

In respect of Yamuna Expressway

The land for Yamuna Expressway along with the construction done on this land

shall be transferred by the Concessionaire to YEA and YEA shall pay to the

Concessionaire:

(i)                 Acquisition cost of the land paid by the Concessionaire;

(ii)               All development costs, including but not limited to the cost of development of land, cost of works executed on the land and cost of other facilities;

(iii)             All incidental costs including liabilities created on the Concessionaire on account of the Termination of the CA;

(iv)             Financing costs including interest @ SBI PLR plus two percent on the costs under (i), (ii) & (iii) above.

 

Repayment of interest free loan

In the event of Termination of the CA due to FM event, the Concessionaire shall not be liable to repay the balance amount of the loan in respect of Noida-Grater Noida Expressway in terms with clause 3.6 of the CA. The Concessionaire shall, without prejudice to the Concessionaire's and YEA's rights under the CA shall be liable to pay Rs Ten Crore to YEA.

 

YEA event of Default

In respect of land for development

(a)    The rights of the Concessionaire in relation to the land for development to the extent such land has been transferred to the Concessionaire shall not be affected and shall survive. However, subject to the foregoing, the Concessionaire shall not be entitled to any further land for development after Termination of the CA.

(b)   The Concessionaire shall have the option to return to YEA, part or full land already transferred by YEA to the Concessionaire should the Concessionaire opt to return to YEA any such land (either in part or in full), YEA shall pay to the Concessionaire:

(i)                 Acquisition cost of the land paid by the Concessionaire;

(ii)               All the development costs, including but not limited to the cost of development of land, construction of buildings and roads, and other facilities;

(iii)             All the incidental costs including liabilities created on the Concessionaire on account of the Termination of the CA;

(iv)             Financing cost including interest @ SBI PLR plus two percent on the costs under (i), (ii) & (iii) above.

 

(c)    YEA shall also be responsible and liable to refund all payments as may be have been made by the Concessionaire towards such land for acquisition which is not transferred to the Concessionaire.

(d)    

In respect of Yamuna Expressway

The land for YE way along with the construction done on this land shall be transferred by the Concessionaire to YEA and YEA shall pay to the Concessionaire:

(i)                 Acquisition cost of the land paid by the Concessionaire;

(ii)               All development costs, including but not limited to the cost of development of land, cost of works executed on the land and cost of other facilities;

(iii)             All incidental costs including liabilities created on the Concessionaire on account of the Termination of the CA;

(iv)             Financing costs including interest @ SBI PLR plus two percent on the costs under (i), (ii) & (iii) above.

 

Repayment of Interest free loan

In the event of Termination of the CA due to FM event, the Concessionaire shall not be liable to repay the balance amount of the loan in respect of Noida-Grater Noida Expressway in terms with clause 3.6 of the

3.2 YAMUNA EXPRESWAY LEASE AGREEMENT
The total land required for Yamuna Expressway is 5106 acres. The said land for the Yamuna Expressway is proposed to be leased to JIL for the period of the Concession by YEA. JIL has executed/would execute appropriate Lease Deed for such land. The salient

Features of the Lease Deed are as under:

FEATURES

REMARKS

Lessor

YEA

Lessee

JIL

Period of Lease

From the date of possession of Leased Land till expiry or termination of the Concession A

Lease Rental

Rs 100/hectare of land leased per year

Right to create encumbrances

The Lessee shall have the right to mortgage, pledge, hypothecate or otherwise alienate in any manner the Leased Land as well as all its rights, titles and interests in the said land in favour of the Lessee's lenders/trustees for the lenders of the Lessee.

Right of the Mortgagee

The Mortgagee shall have the right, with prior notice to the Lessor, to deal with and dispose off within the provisions of law in any manner whatsoever the Mortgaged Land for realization of any or all amounts due and payable by the Lessee to the Mortgagee.

Right to create encumbrances
The Lessee shall have the right to mortgage, pledge, hypothecate or otherwise alienate in any manner the Leased Land as well as all its rights, titles and interests in the said land in favour of the Lessee's lenders/trustees for the lenders of the Lessee.

Right of the Mortgagee
The Mortgagee shall have the right, with prior notice to the Lessor, to deal with and dispose off within the provisions of law in any manner whatsoever the Mortgaged Land for realization of any or all amounts due and payable by the Lessee to the Mortgagee.

3.3 Lease agreement of Developable Land
The total land required for Real Estate Development is 6175 acres. JIL has executed/would execute appropriate Lease Deed for such land. The salient features of the Lease Deed are as under:

Features

Remarks

Lessor

YEA

Lessee

JIL

Lease Rental

Rs 100/hectare of land released per year

Right to sub-lease the whole or part

The Lessee shall have the unfettered right to sub-lease the whole or any part of the Leased Land, whether developed or undeveloped, and whether by way of plots or constructed properties or give on leave and license or otherwise dispose of its interest in the Leased Land or part thereof / permit to any person in any manner whatsoever, without requiring any consent or approval of or payment of any additional charges. The Sub-lessees of the Leased Land are also permitted to further lease land in their possession. Hence, the Lease Deed permits multiple sub-lease of the Leased Land in smaller parts.

Right to encumbrances

The Lessee shall have the right to mortgage, pledge, hypothecate or otherwise alienate in any manner the Leased Land as well as all its rights, titles and interests in the said land in favour of the Lessee's lenders/trustees for the lenders of the Lessee.

Right of the Mortgagee

The Mortgagee shall have the right, with prior notice to the Lessor, to deal with and dispose off within the provisions of law in any manner whatsoever the Mortgaged Land for realization of any or all amounts due and payable by the Lessee to the Mortgage

Right to sub-lease the whole or part
The Lessee shall have the unfettered right to sub-lease the whole or any part of the Leased Land, whether developed or undeveloped, and whether by way of plots or constructed properties or give on leave and license or otherwise dispose of its interest in the Leased Land or part thereof / permit to any person in any manner whatsoever, without requiring any consent or approval of or payment of any additional charges. The Sub-lessees of the Leased Land are also permitted to further lease land in their possession. Hence, the Lease Deed permits multiple sub-lease of the Leased Land in smaller parts.

Right to encumbrances
The Lessee shall have the right to mortgage, pledge, hypothecate or otherwise alienate in any manner the Leased Land as well as all its rights, titles and interests in the said land in favour of the Lessee's lenders/trustees for the lenders of the Lessee.

Right of the Mortgagee
The Mortgagee shall have the right, with prior notice to the Lessor, to deal with and dispose off within the provisions of law in any manner whatsoever the Mortgaged Land for realization of any or all amounts due and payable by the Lessee to the Mortgage

Bibliography:
1. Confidential Documents of JIL covered Concession contract between JIL and YEA; Lease agreement between JIL and YEA
4. http://www.cuts-international.org/pdf/Viewpointpaper-InfrastrConcessContract-intro.pdf

Authors contact info - articles The  author can be reached at: gaurav.25@legalserviceindia.com




1 2 3 4 5
Rate this article!     Poor
Excellent    

Most viewed articles in Contracts laws category
Void & Voidable Agreements
Privity of contract & third party beneficiary in a contract
Specific performance of Contracts
Wagering Agreements
Regulation of Contract Labour
Perspectives on Contract Labour Act
Standard form of Contract
Indemnity in a contract
Nemo Dat Quod Non Habet
Pre-incorporation contracts
Contract Ratification
Fundamental Breach of Contract
Time is the essance of the Contract
Contract- II: Bailment
Joint & Several Liability
Standard Form Contract
Most recent articles in Contracts laws category
Government Contracts
Offer in a Contract
Standard Form of Contracts: Effect Of Unequal Bargaining Power
John Lockes Social Contract Theory
Rescission of contract
Nemo Dat Quod Non Habet
Comparative Analysis of a Treaty Governed By Vienna Convention And A Contract Regulated by Indian Contract Act
Fundamental Principles of Contract Drafting
Importance of Consideration in Contract
Anti Competitive Agreements and whether Consumers can be a Party to such Agreements?
Position Finder of Goods under Indian Contract Act
Deemed Sale
A Legal Perspective on Public Private Partnerships in India
Study of Contractual Documents Involved In Yamuna Expressway Project
Perspectives on Contract Labour Act
Fundamental Breach of Contract

Article Comments

there are no comments...

Post Your Comments
Name

Email

Your comments

Note : Your email address is only visible to admin, other members / users cannot see it.

You can use following FXCodes


BOLD : [b]
Italic : [i]

[b] Legal Services India [/b] is a [i]nice website[/i].
[url= http://www.legalservicesindia.com/article/ ]click here to visit.[/url]

Legal Services India is a nice website.
Click here to visit

 

Note : Currently, user comments are moderated and will be posted only after approval.



Welcome!
Please login or register a new free account.

Random Pick
This article analyses the yet-to-be introduced "One Person Company" concept in the Indian Company Law scenario....

Statistics
» Total Articles
1374
» Total Authors
3989
» Total Views
15543263
» Total categories
40

Law Forum


Legal Articles

Lawyers in India- Click on a link below for legal Services

lawyers in Chennai
lawyers in Bangalore
lawyers in Hyderabad
lawyers in Cochin
lawyers in Pondicherry
lawyers in Guwahati
lawyers in Nashik

lawyers in Jaipur
lawyers in New Delhi
lawyers in Dimapur
lawyers in Agra
Noida lawyers
lawyers in Siliguri

For Mutual consent Divorce in Delhi

Ph no: 9650499965
For online Copyright Registration

Ph no: 9891244487
Law Articles

lawyers in Delhi
lawyers in Chandigarh
lawyers in Allahabad
lawyers in Lucknow
lawyers in Jodhpur
Faridabad lawyers

lawyers in Mumbai
lawyers in Pune
lawyers in Nagpur
lawyers in Ahmedabad
lawyers in Surat
Ghaziabad lawyers

lawyers in Kolkata
lawyers in Janjgir
lawyers in Rajkot
lawyers in Indore
lawyers in Ludhiana
Gurgaon lawyers

TOP

India's Most Trusted Online law library
Legal Services India is Copyrighted under the Registrar of Copyright Act ( Govt of India) 2000-2016
 ISBN No: 978-81-928510-1-3