EPC

(ENGINEERING PROCUREMENT AND

CONSTRUCTION)

DRAFT AGREEMENT
(VOL-I)

FOR
Construction of 2 lane pavement with
paved shoulders from Km 168.00 to
183.783 (Yesemong to Unger) on
Mokokchung to Tuli section of NH-61 in the
State of Nagaland

Ministry of Road Transport & Highways, New

Delhi

(MoRT&H)

Through

Chief Engineer

PWD (National Highways)

Kohima, Nagaland

May 2017
 Contents
Overview of the Framework 1

PART I
Preliminary

Recitals 9

1 Definitions and Interpretation 11

1.1 Definitions 11
1.2 Interpretation 11
1.3 Measurements and arithmetic conventions 14
1.4 Priority of agreements and errors/discrepancies 14
1.5 Joint and several liability 15

PART II
Scope of the Project

2 Scope of the Project 19

2.1 Scope of the Project 19

3 Obligations of the Contractor 20

3.1 Obligations of the Contractor 20
3.2 Obligations relating to sub-contracts and any other agreements 21
3.3 Employment of foreign nationals 22
3.4 Contractor‟s personnel 23
3.5 Advertisement on Project Highway 23
3.6 Contractor's care of the Works 23
3.7 Electricity, water and other services 23
3.8 Unforeseeable difficulties 23

4 Obligations of the Authority 25

4.1 Obligations of the Authority 25
4.2 Maintenance obligations prior to the Appointed Date 26
4.3 Environmental Clearances 27

5 Representations and Warranties 28

5.1 Representations and warranties of the Contractor 28
5.2 Representations and warranties of the Authority 29
5.3 Disclosure 30

6 Disclaimer 31
6.1 Disclaimer 31

PART III
Construction and Maintenance

7 Performance Security 35
7.1 Performance Security 35
7.2 Extension of Performance Security 36
7.3 Appropriation of Performance Security 36
7.4 Release of Performance Security 36
7.5 Retention Money 36

1
8 Right of Way 38
8.1 The Site 38
8.2 Procurement of the Site 38
8.3 Damages for delay in handing over the Site 39
8.4 Site to be free from Encumbrances 40
8.5 Protection of Site from encroachments 41
8.6 Special/temporary Right of Way 41
8.7 Access to the Authority and the Authority‟s Engineer 41
8.8 Geological and archaeological finds 41

9 Utilities and Trees 43

9.1 Existing utilities and roads 43
9.2 Shifting of obstructing utilities 43
9.3 New utilities 43
9.4 Felling of trees 44

10 Design and Construction of the Project Highway 45

10.1 Obligations prior to commencement of Works 45
10.2 Design and Drawings 47
10.3 Construction of the Project Highway 49
10.4 Maintenance during Construction Period 50
10.5 Extension of time for completion 50
10.6 Incomplete Works 52
10.7 Maintenance Manual 52

11 Quality Assurance, Monitoring and Supervision 54

11.1 Quality of Materials and workmanship 54
11.2 Quality control system 54
11.3 Methodology 54
11.4 Inspection and technical audit by the Authority 55
11.5 External technical audit 55
11.6 Inspection of construction records 55
11.7 Monthly progress reports 55
11.8 Inspection 55
11.9 Samples 56
11.10 Tests 56
11.11 Examination of work before covering up 57
11.12 Rejection 57
11.13 Remedial work 57
11.14 Delays during construction 58
11.15 Quality control records and Documents 58
11.16 Video recording 58
11.17 Suspension of unsafe Construction Works 58

12 Completion Certificate 60
12.1 Tests on completion 60
12.2 Provisional Certificate 60
12.3 Completion of remaining Works 62
12.4 Completion Certificate 62
12.5 Rescheduling of Tests 62

13 Change of Scope 63
13.1 Change of Scope 63
13.2 Procedure for Change of Scope 63
13.3 Payment for Change of Scope 65
13.4 Restrictions on Change of Scope 65
13.5 Power of the Authority to undertake works 65
2
14 Maintenance 67
14.1 Maintenance obligations of the Contractor 67
14.2 Maintenance Requirements 68
14.3 Maintenance Programme 68
14.4 Safety, vehicle breakdowns and accidents 68
14.5 Lane closure 69
Reduction of payment for non-performance of Maintenance 69 obligations
14.7 Authority‟s right to take remedial measures 69
14.8 Restoration of loss or damage to Project Highway 70
14.9 Overriding powers of the Authority 70

15 Supervision and Monitoring during Maintenance 72

15.1 Inspection by the Contractor 72
15.2 Inspection and payments 72
15.3 Tests 73
15.4 Reports of unusual occurrence 73

16 Traffic Regulation 74
16.1 Traffic regulation by the Contractor 74

17 Defects Liability 75
17.1 Defects Liability Period 75
17.2 Remedying Defects 75
17.3 Cost of remedying Defects 75
17.4 Contractor‟s failure to rectify Defects 76
17.5 Contractor to search cause 76
17.6 Extension of Defects Liability Period 76

18 Authority’s Engineer 77
18.1 Appointment of the Authority‟s Engineer 77
18.2 Duties and authority of the Authority‟s Engineer 77
18.3 Delegation by the Authority‟s Engineer 77
18.4 Instructions of the Authority‟s Engineer 78
18.5 Determination by the Authority‟s Engineer 78
18.6 Remuneration of the Authority‟s Engineer 79
18.7 Termination of the Authority‟s Engineer 79

PART IV
Financial Covenants

19 Payments 83
19.1 Contract Price 83
19.2 Advance Payment 83
19.3 Procedure for estimating the payment for the Works 85
19.4 Stage Payment Statement for Works 85
19.5 Stage Payment for Works 85
19.6 Monthly Maintenance Statement of the Project Highway 86
19.7 Payment for Maintenance of the Project Highway 86
19.8 Payment of Damages 87
19.9 Time of payment and interest 87
19.10. Price adjustment for the Works 88
19.11 Restrictions on price adjustment 91
19.12. Price adjustment for Maintenance of Project Highway 92
19.13 Final Payment Statement 92
19.14 Discharge 93
19.15 Final Payment Certificate 93
3
19.16 Final payment statement for Maintenance 93
19.17 Change in law 94
19.18 Correction of Interim Payment Certificates 94
19.19 Authority‟s claims 95
19.20 Bonus for early completion 95

20 Insurance 96
20.1 Insurance for Works and Maintenance 96
20.2 Notice to the Authority 97
20.3 Evidence of Insurance Cover 97
20.4 Remedy for failure to insure 97
20.5 Waiver of subrogation 98
20.6 Contractor‟s waiver 98
20.7 Cross liabilities 98
20.8 Accident or injury to workmen 98
20.9 Insurance against accident to workmen 99
20.10 Application of insurance proceeds 99
20.11 Compliance with policy conditions 99

Part V
Force Majeure and Termination

21 Force Majeure 103

21.1 Force Majeure 103
21.2 Non-Political Event 103
21.3 Indirect Political Event 104
21.4 Political Event 104
21.5 Duty to report Force Majeure Event 105
21.6 Effect of Force Majeure Event on the Agreement 105
21.7 Termination Notice for Force Majeure Event 106
21.8 Termination Payment for Force Majeure Event 106
21.9 Dispute resolution 107
21.10 Excuse from performance of obligations 107

22 Suspension of Contractor’s Rights 109

22.1 Suspension upon Contractor Default 109
22.2 Authority to act on behalf of the Contractor 109
22.3 Revocation of Suspension 109
22.4 Termination 110

23 Termination 111
23.1 Termination for Contractor Default 111
23.2 Termination for Authority Default 113
23.3 Termination for Authority‟s convenience 114
23.4 Requirements after Termination 114
23.5 Valuation of Unpaid Works 114
23.6 Termination Payment 115
23.7 Other rights and obligations of the Parties 116
23.8 Survival of rights 117

PART VI
Other Provisions

24 Assignment and Charges 121

24.1 Restrictions on assignment and charges 121
24.2 Hypothecation of Materials or Plant 121

25 Liability and Indemnity 122

4
25.1 General indemnity 122
25.2 Indemnity by the Contractor 122
25.3 Notice and contest of claims 123
25.4 Defence of claims 123
25.5 No consequential claims 124
25.6 Survival on Termination 125

26 Dispute Resolution 126

26.1 Dispute Resolution 126
26.2 Conciliation 126
26.3 Arbitration 126
Adjudication by Regulatory Authority, Tribunal or
26.4 Commission 127

27 Miscellaneous 128
27.1 Governing law and jurisdiction 128
27.2 Waiver of immunity 128
27.3 Delayed payments 128
27.4 Waiver 129
27.5 Liability for review of Documents and Drawings 129
27.6 Exclusion of implied warranties etc. 129
27.7 Survival 129
27.8 Entire Agreement 130
27.9 Severability 130
27.10 No partnership 130
27.11 Third Parties 131
27.12 Successors and assigns 131
27.13 Notices 131
27.14 Language 131
27.15 Counterparts 132
27.16 Confidentiality 132
27.17 Copyright and Intellectual Property rights 132
27.18 Limitation of Liability 133

28 Definitions 134
28.1 Definitions 134

Schedules Vol-II
 Part I
Preliminary

8
ENGINEERING, PROCUREMENT AND CONSTRUCTION
AGREEMENT
1
THIS AGREEMENT is entered into on this the ……….. day of ………, 20…..

BETWEEN

The President of India through the Ministry of Road Transport & Highways,
Government of India represented by Chief Engineer, PWD Kohima National
Highway Division, Kohima, Nagaland (hereinafter referred to as the
"Authority" which expression shall, unless repugnant to the context or
meaning thereof, include its administrators, successors and assigns) of
One

AND
2 3
{------------,} means the selected bidder having its registered office at
……………, (hereinafter referred to as the “Contractor” which expression
shall, unless repugnant to the context or meaning thereof, include its
successors and permitted assigns) of the Other Part.

WHEREAS:

(A) The Government of India had entrusted to the Authority the development,
maintenance and management of National Highway No. 61 (old) including the
sections from Construction of 2 lane pavement with paved shoulders from
Km 168.00 to Km 183.783 of NH- 61 (Length: 15.8 Km) in the State of
Nagaland.
(B) The Authority had resolved to rehabilitate and augment the existing road from
Construction of 2 lane pavement with paved shoulders from Km 168.00
to Km 183.783 of NH- 61 (Length: 15.8 Km) in the State of Nagaland
section of National Highway No. 61 (old) (hereinafter called the “NH 61
(old)”) in the state of Nagaland by Two-Lane on Engineering, Procurement,
Construction (“EPC”) basis in accordance with the terms and conditions to be
set forth in an agreement to be entered into.

(C) The Authority had accordingly invited proposals by its [Request for
Qualification No. *** dated ***] (the “Request for Qualification” or
“RFQ”) for short listing of bidders for EPC of the above referred section of
NH-61and had shortlisted certain bidders including, inter alia, the selected
bidder.

(D) The Authority had prescribed the technical and commercial terms and
conditions, and invited bids (the “Request for Proposals” or “RFP”) from
the bidders shortlisted pursuant to the RFQ for undertaking the Project.

(E) After evaluation of the bids received, the Authority had accepted the bid of
the selected bidder and issued its Letter of Acceptance No. …….. dated
9
………….. (hereinafter called the “LOA”) to the selected bidder for rehabilitation
and augmentation of the above section of NH-39 at the contract price
specified hereinafter, requiring the selected bidder to inter alia:

deliver to the Authority a legal opinion from the legal counsel of the
selected bidder with respect to the authority of the selected bidder to
enter into this Agreement and the enforceability of the provisions
thereof, within 10 (ten) days of the date of issue of LOA; and execute
this Agreement within 15 (fifteen) days of the date of issue of LOA.
The Contractor has fulfilled the requirements specified in Recital (E) above;

NOW THEREFORE in consideration of the foregoing and the respective

covenants and agreements set forth in this Agreement, the sufficiency and
adequacy of which is hereby acknowledged, the Authority hereby covenants
to pay the Contractor, in consideration of the obligations specified herein, the
Contract Price or such other sum as may become payable under the
provisions of the Agreement at the times and in the manner specified by the
Agreement and intending to be legally bound hereby, the Parties agree as
follows:

The following documents attached hereto shall be deemed to form an

integral part of this Contract:

Volume-I :
The Agreement;
Corrigendum to the Agreement;
Addendum, if any, to RFP;
Letter comprising the financial Bid;
Letter of Acceptance;
Power of Attorney;
Joint Venture Agreement, if
any; Legal opinion;
Any other document to be specified

Volume-II: Technical Bid

10
 ARTICLE 1
DEFINITIONS AND INTERPRETATION

Definitions

The words and expressions beginning with capital letters and defined in this
Agreement (including those in Article 28) shall, unless the context otherwise
requires, have the meaning ascribed thereto herein, and the words and
expressions defined in the Schedules and used therein shall have the meaning
ascribed thereto in the Schedules.

Interpretation

In this Agreement, unless the context otherwise requires,

references to any legislation or any provision thereof shall include

amendment or re-enactment or consolidation of such legislation or
any provision thereof so far as such amendment or re-enactment or
consolidation applies or is capable of applying to any transaction
entered into hereunder;

references to laws of India or Indian law or regulation having the

force of law shall include the laws, acts, ordinances, rules,
regulations, bye laws or notifications which have the force of law in
the territory of India and as from time to time may be amended,
modified, supplemented, extended or re-enacted;

references to a “person” and words denoting a natural person shall be

construed as a reference to any individual, firm, company,
corporation, society, trust, government, state or agency of a state or
any association or partnership (whether or not having separate legal
personality) of two or more of the above and shall include successors
and assigns;

the table of contents, headings or sub-headings in this Agreement are

for convenience of reference only and shall not be used in, and shall
not affect, the construction or interpretation of this Agreement;

the words “include” and “including” are to be construed without

limitation and shall be deemed to be followed by “without limitation”
or “but not limited to” whether or not they are followed by such
phrases;

references to “construction” or “building” include, unless the context

otherwise requires, survey and investigation, design, developing,
engineering, procurement, supply of plant, materials, equipment,
labour, delivery, transportation, installation, processing, fabrication,
11
testing, and commissioning of the Project Highway, including
maintenance during the Construction Period, removing of defects, if
any, and other activities incidental to the construction and “construct”
or “build” shall be construed accordingly;

references to “development” include, unless the context otherwise

requires, construction, renovation, refurbishing, augmentation, up-
gradation and other activities incidental thereto during the
Construction Period, and “develop” shall be construed accordingly;

any reference to any period of time shall mean a reference to that

according to Indian standard time;

any reference to day shall mean a reference to a calendar day;

references to a “business day” shall be construed as a reference to a

day (other than a Sunday) on which banks in [Delhi] are generally
open for business;

any reference to month shall mean a reference to a calendar month as

per the Gregorian calendar;

references to any date, period or Project Milestone shall mean and

include such date, period or Project Milestone as may be extended
pursuant to this Agreement;

any reference to any period commencing “from” a specified day or

date and “till” or “until” a specified day or date shall include both
such days or dates; provided that if the last day of any period
computed under this Agreement is not a business day, then the period
shall run until the end of the next business day;

the words importing singular shall include plural and vice versa;

references to any gender shall include the other and the neutral
gender;

“lakh” means a hundred thousand (100,000) and “crore” means ten

million (10,000,000);

“indebtedness” shall be construed so as to include any obligation

(whether incurred as principal or surety) for the payment or
repayment of money, whether present or future, actual or contingent;

references to the “winding-up”, “dissolution”, “insolvency”, or

“reorganisation” of a company or corporation shall be construed so as
to include any equivalent or analogous proceedings under the law of
the jurisdiction in which such company or corporation is incorporated
or any jurisdiction in which such company or corporation carries on
business including the seeking of liquidation, winding-up,
12
 reorganisation, dissolution, arrangement, protection or relief of
debtors;

save and except as otherwise provided in this Agreement, any

reference, at any time, to any agreement, deed, instrument, licence or
document of any description shall be construed as reference to that
agreement, deed, instrument, licence or other document as amended,
varied, supplemented, modified or suspended at the time of such
reference; provided that this Clause shall not operate so as to increase
liabilities or obligations of the Authority hereunder or pursuant hereto
in any manner whatsoever;

any agreement, consent, approval, authorisation, notice,

communication, information or report required under or pursuant to
this Agreement from or by any Party or the Authority‟s Engineer
shall be valid and effective only if it is in writing under the hand of a
duly authorised representative of such Party or the Authority‟s
Engineer, as the case may be, in this behalf and not otherwise;

the Schedules and Recitals to this Agreement form an integral part of

this Agreement and will be in full force and effect as though they
were expressly set out in the body of this Agreement;

references to Recitals, Articles, Clauses, Sub-clauses or Schedules in

this Agreement shall, except where the context otherwise requires,
mean references to Recitals, Articles, Clauses, Sub-clauses and
Schedules of or to this Agreement, and references to a Paragraph
shall, subject to any contrary indication, be construed as a reference
to a Paragraph of this Agreement or of the Schedule in which such
reference appears;

the damages payable by either Party to the other of them, as set forth
in this Agreement, whether on per diem basis or otherwise, are
mutually agreed genuine pre-estimated loss and damage likely to be
suffered and incurred by the Party entitled to receive the same and are
not by way of penalty (the “Damages”); and

time shall be of the essence in the performance of the Parties‟

respective obligations. If any time period specified herein is extended
for the reasons specified in the Agreement, such extended time shall
also be of the essence.

Unless expressly provided otherwise in this Agreement, any Documentation

required to be provided or furnished by the Contractor to the Authority shall
be provided free of cost and in three copies, and if the Authority is required
to return any such Documentation with its comments and/or approval, it shall
be entitled to retain two copies thereof.

The rule of construction, if any, that a contract should be interpreted against

13
 the parties responsible for the drafting and preparation thereof, shall not
apply.

Any word or expression used in this Agreement shall, unless otherwise

defined or construed in this Agreement, bear its ordinary English meaning
and, for these purposes, the General Clauses Act, 1897 shall not apply.

Measurements and arithmetic conventions

All measurements and calculations shall be in the metric system and

calculations done to 2 (two) decimal places, with the third digit of 5 (five) or
above being rounded up and below 5 (five) being rounded down.

Priority of agreements and errors/discrepancies

This Agreement, and all other agreements and documents forming part of or
referred to in this Agreement are to be taken as mutually explanatory and,
unless otherwise expressly provided elsewhere in this Agreement, the
priority of this Agreement and other documents and agreements forming part
hereof or referred to herein shall, in the event of any conflict between them,
be in the following order:

this Agreement; and

all other agreements and documents forming part hereof or referred to
herein; i.e. this Agreement at (a) above shall prevail over the
agreements and documents at (b).

Subject to the provisions of Clause 1.4.1, in case of ambiguities or

discrepancies within this Agreement, the following shall apply:

between two or more Clauses of this Agreement, the provisions of a

specific Clause relevant to the issue under consideration shall prevail
over those in other Clauses;

between the Clauses of this Agreement and the Schedules, the

Clauses shall prevail and between Schedules and Annexes, the
Schedules shall prevail;

between any two Schedules, the Schedule relevant to the issue shall
prevail;

between the written description on the Drawings and the

Specifications and Standards, the latter shall prevail;

between the dimension scaled from the Drawing and its specific
written dimension, the latter shall prevail; and

between any value written in numerals and that in words, the latter
shall prevail.

14
{1.5 Joint and several liability

If the Contractor has formed a Consortium of two or more persons for

implementing the Project:

these persons shall, without prejudice to the provisions of this

Agreement, be deemed to be jointly and severally liable to the
Authority for the performance of the Agreement; and

the Contractor shall ensure that no change in the composition of the

Consortium is effected without the prior consent of the Authority.

Without prejudice to the joint and several liability of all the members of the
Consortium, the Lead Member shall represent all the members of the
Consortium and shall at all times be liable and responsible for discharging
the functions and obligations of the Contractor. The Contractor shall ensure
that each member of the Consortium shall be bound by any decision,
communication, notice, action or inaction of the Lead Member on any matter
related to this Agreement and the Authority shall be entitled to rely upon any
such action, decision or communication of the Lead Member. The Authority
shall have the right to release payments solely to the Lead Member and shall
not in any manner be responsible or liable for the inter se allocation of
$
payments among members of the Consortium.}

$
This Clause 1.5 may be omitted if the Contractor is not a Consortium. Even if the Contractor is a
Consortium, the Authority may, at its discretion, delete this provision.

15
 Part II
Scope of Project

16
 ARTICLE 2
SCOPE OF THE PROJECT

Scope of the Project

Under this Agreement, the scope of the Project (the “Scope of the Project”)
shall mean and include:

construction of the Project Highway on the Site set forth in Schedule-

A and as specified in Schedule-B together with provision of Project
Facilities as specified in Schedule-C, and in conformity with the
Specifications and Standards set forth in Schedule-D;

maintenance of the Project Highway in accordance with the

provisions of this Agreement and in conformity with the
requirements set forth in Schedule-E; and

Performance and fulfilment of all other obligations of the Contractor

in accordance with the provisions of this Agreement and matters
incidental thereto or necessary for the performance of any or all of
the obligations of the Contractor under this Agreement.

17
 ARTICLE 3
OBLIGATIONS OF THE CONTRACTOR

Obligations of the Contractor

Subject to and on the terms and conditions of this Agreement, the Contractor shall
undertake the survey, investigation, design, engineering, procurement,
construction, and maintenance of the Project Highway and observe, fulfil,
comply with and perform all its obligations set out in this Agreement or
arising hereunder.

The Contractor shall comply with all Applicable Laws and Applicable Permits
(including renewals as required) in the performance of its obligations under
this Agreement.

Subject to the provisions of Clauses 3.1.1 and 3.1.2, the Contractor shall discharge
its obligations in accordance with Good Industry Practice and as a reasonable
and prudent person.

The Contractor shall remedy any and all loss or damage to the Project Highway
from the Appointed Date until the end of the Construction Period at the
Contractor‟s cost, save and except to the extent that any such loss or damage
shall have arisen from any default or neglect of the Authority.

The Contractor shall remedy any and all loss or damage to the Project Highway
during the Defects Liability Period at the Contractor‟s cost to the extent that
such loss or damage shall have arisen out of the reasons specified in Clause
17.3.

The Contractor shall remedy any and all loss or damage to the Project Highway
during the Maintenance Period at the Contractor‟s cost, including those
stated in Clause 14.1.2, save and except to the extent that any such loss or
damage shall have arisen on account of any default or neglect of the
Authority or on account of a Force Majeure Event.

The Contractor shall, at its own cost and expense, in addition to and not in
derogation of its obligations elsewhere set out in this Agreement:

make, or cause to be made, necessary applications to the relevant

Government Instrumentalities with such particulars and details as
may be required for obtaining Applicable Permits set forth in
Schedule-F and obtain and keep in force and effect such Applicable
Permits in conformity with the Applicable Laws;

procure, as required, the appropriate proprietary rights, licences, agreements

and permissions for Materials, methods, processes and systems used
or incorporated into the Project Highway;

make reasonable efforts to maintain harmony and good industrial

18
 relations among the personnel employed by it or its Sub-contractors
in connection with the performance of its obligations under this
Agreement;

ensure and procure that its Sub-contractors comply with all

Applicable Permits and Applicable Laws in the performance by them
of any of the Contractor‟s obligations under this Agreement;

not do or omit to do any act, deed or thing which may in any manner
be violative of any of the provisions of this Agreement;

support, cooperate with and facilitate the Authority in the

implementation and operation of the Project in accordance with the
provisions of this Agreement;

ensure that the Contractor and its Sub-contractors comply with the
safety and welfare measures for labour in accordance with the
Applicable Laws and Good Industry Practice;

keep, on the Site, a copy of this Agreement, publications named in

this Agreement, the Drawings, Documents relating to the Project, and
Change of Scope Orders and other communications given under this
Agreement. The Authority‟s Engineer and its authorised personnel
shall have the right of access to all these documents at all reasonable
times;

cooperate with other contractors employed by the Authority and

personnel of any public authority; and

not interfere unnecessarily or improperly with the convenience of the

public, or the access to and use and occupation of all roads and
footpaths, irrespective of whether they are public or in the possession
of the Authority or of others.
The Contractor shall undertake all necessary superintendence to plan,
arrange, direct, manage, inspect and test the Works.

Obligations relating to sub-contracts and any other agreements

The Contractor, whether Consortium/Joint Venture or sole, shall not sub-contract

any Works in more than 49% (forty nine per cent) of the total length of the
Project Highway and shall carry out Works directly under its own
supervision and through its own personnel and equipment in at least 51%
(fifty one per cent) of the total length of the Project Highway. Provided,
however, that in respect of the Works carried out directly by the Contractor,
it may enter into contracts for the supply and installation of Materials, Plant,
equipment, road furniture, safety devices and labour, as the case may be, for
such Works. For the avoidance of doubt, the Parties agree that the Contractor
may sub-divide the aforesaid length of 51% (fifty one per cent) in no more
than 5 (five) sections of the Project Highway. The
19
 Parties further agree that all obligations and liabilities under this Agreement
*
for the entire project Highway shall at all times remain with the Contractor.
In the event any sub-contract for Works, or the aggregate of such sub-
contracts with any Sub-contractor, exceeds 5% (five percent) of the Contract
Price, the Contractor shall communicate the name and particulars, including
the relevant experience of the sub-contractor, to the Authority prior to
entering into any such sub-contract. The Authority shall examine the
particulars of the sub-contractor from the national security and public interest
perspective and may require the Contractor, no later than 15 (fifteen)
business days from the date of receiving the communication from the
Contractor, not to proceed with the sub-contract, and the Contractor shall
comply therewith.

In the event any sub-contract referred to in Clause 3.2.2 relates to a sub-

contractor who has, over the preceding 3 (three) years, not undertaken at
least one work of a similar nature with a contract value exceeding 40% (forty
per cent) of the value of the sub-contract to be awarded hereunder and
received payments in respect thereof for an amount equal to at least such
40% (forty per cent), the Authority may, no later than 15 (fifteen) business
days from the date of receiving the communication from the Contractor,
require the Contractor not to proceed with such sub-contract, and the
Contractor shall comply therewith.

It is expressly agreed that the Contractor shall, at all times, be responsible

and liable for all its obligations under this Agreement notwithstanding
anything contained in the agreements with its Sub-contractors or any other
agreement that may be entered into by the Contractor, and no default under
any such agreement shall excuse the Contractor from its obligations or
liability hereunder.

Employment of foreign nationals

The Contractor acknowledges, agrees and undertakes that employment of

foreign personnel by the Contractor and/or its Sub-contractors and their sub-
contractors shall be subject to grant of requisite regulatory permits and
approvals including employment/residential visas and work permits, if any
required, and the obligation to apply for and obtain the same shall and will
always be of the Contractor. Notwithstanding anything to the contrary
contained in this Agreement, refusal of or inability to obtain any such permits
and approvals by the Contractor or any of its Sub-contractors or their sub-
contractors shall not constitute Force Majeure Event, and shall not in any
manner excuse the Contractor from the performance and discharge of its
obligations and liabilities under this Agreement.

*
May be deleted if the Contractor is not a Consortium

20
Contractor’s personnel

The Contractor shall ensure that the personnel engaged by it or by its Sub-
contractors in the performance of its obligations under this Agreement are at
all times appropriately qualified, skilled and experienced in their respective
functions in conformity with Good Industry Practice. The Contractor will try
to hire at least 10% trained workmen as per NSQF. If necessary the requisite
workmen may be got trained through authorized training centres of
Directorate General of Training (DGT). The Contractor will organize
training at project site/sites for the trainees as and when required as per the
training schedule finalized in consultation with the training centres, and the
Project Director. The trainees are to be paid stipend (subject to maximum
limit of Rs. 15,000/- per person) on the basis of minimum wages to
compensate for loss of income during the training period. The expenditure on
training and stipend to be paid to the trainees shall be borne by Authority.

The Authority‟s Engineer may, for reasons to be specified in writing, direct

the Contractor to remove any member of the Contractor‟s or Sub-
contractor‟s personnel. Provided that any such direction issued by the
Authority‟s Engineer shall specify the reasons for the removal of such
person.

The Contractor shall on receiving such a direction from the Authority‟s

Engineer order for the removal of such person or persons with immediate
effect. It shall be the duty of the Contractor to ensure that such persons are
evicted from the Site within 10 (ten) days of any such direction being issued
in pursuance of Clause 3.4.2. The Contractor shall further ensure that such
persons have no further connection with the Works or Maintenance under
this Agreement. The Contractor shall then appoint (or cause to be appointed)
a replacement.

Advertisement on Project Highway

The Project Highway or any part thereof shall not be used in any manner to
advertise any commercial product or services.

Contractor's care of the Works

The Contractor shall bear full risk in and take full responsibility for the care
of the Works, and of the Materials, goods and equipment for incorporation
therein, from the Appointed Date until the date of Provisional Certificate
(with respect to the Works completed prior to the issuance of the Provisional
Certificate) and/or Completion Certificate (with respect to the Works
referred to in the Punch List), save and except to the extent that any such loss
or damage shall have arisen from any default or neglect of the Authority.

Electricity, water and other services

The Contractor shall be responsible for procuring of all power, water and
21
other services that it may require.

Unforeseeable difficulties

Except as otherwise stated in the Agreement:

the Contractor accepts complete responsibility for having foreseen all

difficulties and costs of successfully completing the Works;

the Contract Price shall not be adjusted to take account of any

unforeseen difficulties or costs; and

the Scheduled Completion Date shall not be adjusted to take account

of any unforeseen difficulties or costs.

22
 ARTICLE 4
OBLIGATIONS OF THE AUTHORITY

Obligations of the Authority

The Authority shall, at its own cost and expense, undertake, comply with and
perform all its obligations set out in this Agreement or arising hereunder.

The Authority shall be responsible for the correctness of the Scope of the
Project, Project Facilities, Specifications and Standards and the criteria for
testing of the completed Works.

The Authority shall provide to the Contractor:

upon receiving the Performance Security under Clause 7.1.1, the

Right of Way in accordance with the provisions of Clauses 8.2 and
8.3, within a period of 30 (thirty) days from the date of this
Agreement, on no less than 90% (ninety per cent) of the total length
of the Project Highway;

approval of the general arrangement drawings (the “GAD”) from

railway authorities to enable the Contractor to construct road over-
bridges/ under-bridges at level crossings on the Project Highway in
accordance with the Specifications and Standards, and subject to the
terms and conditions specified in such approval, within a period of 60
(sixty) days from the Appointed Date, and reimbursement of all the
costs and expenses paid by the Contractor to the railway authorities
6
for and in respect of the road over-bridges/under bridges; and
7
all environmental clearances as required under Clause 4.3.

Delay in providing the Right of Way or approval of GAD by railway

authorities, as the case may be, in accordance with the provisions of Clause
4.1.3 shall entitle the Contractor to Damages in a sum calculated in
accordance with the provisions of Clause 8.3 of this Agreement and Time
Extension in accordance with the provisions of Clause 10.5 of this
Agreement. For the avoidance of doubt, the Parties agree that the Damages
for delay in approval of GAD by the railway authorities for a particular road
over-bridge/under-bridge shall be deemed to be equal to the Damages
payable under the provisions of Clause 8.3 for delay in providing Right of

Clause (b) may be omitted if the Project does not include a road over-bridge/under-bridge.

Clause 4.1.3 (c) may be suitably modified in the event that all the environmental clearances for the
Project Highway have been received or are not required. It should be clearly stated that all the
environmental clearances for the Project Highway have been received; or such environmental
clearances for the Project Highway are not required.

23
Way for a length of 2 (two) kilometre for each such road over-bridge/under-
bridge.

Notwithstanding anything to the contrary contained in this Agreement, the

Parties expressly agree that the aggregate Damages payable under Clauses
4.1.4, 8.3 and 9.2 shall not exceed 1% (one per cent) of the Contract Price.
For the avoidance of doubt, the Damages payable by the Authority under the
aforesaid Clauses shall not be additive if they arise concurrently from more
than one cause but relate to the same part of the Project Highway.

Both the parties agree that payment of these Damages shall be full and final
settlement of all claims of the Contractor and such compensation shall be the
sole remedy against delays of the Authority and both parties further agree
this as final cure against delays of the Authority.

The Authority agrees to provide support to the Contractor and undertakes to

observe, comply with and perform, subject to and in accordance with the
provisions of this Agreement and the Applicable Laws, the following:

upon written request from the Contractor, and subject to the

Contractor complying with Applicable Laws, provide reasonable
support to the Contractor in procuring Applicable Permits required
from any Government Instrumentality for implementation of the
Project;

upon written request from the Contractor, provide reasonable

assistance to the Contractor in obtaining access to all necessary
infrastructure facilities and utilities, including water and electricity at
rates and on terms no less favourable than those generally available
to commercial customers receiving substantially equivalent services;

procure that no barriers that would have a material adverse effect on

the works are erected or placed on or about the Project Highway by
any Government Instrumentality or persons claiming through or
under it, except for reasons of Emergency, national security, law and
order or collection of inter-state taxes;

not do or omit to do any act, deed or thing which may in any manner
be violative of any of the provisions of this Agreement;

support, cooperate with and facilitate the Contractor in the

implementation of the Project in accordance with the provisions of
this Agreement; and

upon written request from the Contractor and subject to the

provisions of Clause 3.3, provide reasonable assistance to the
Contractor and any expatriate personnel of the Contractor or its Sub-
contractors to obtain applicable visas and work permits for the
24
 purposes of discharge by the Contractor or its Sub-contractors of their
obligations under this Agreement and the agreements with the Sub-
contractors.

Maintenance obligations prior to the Appointed Date

The Authority shall, prior to the Appointed Date, maintain the Project
Highway, at its own cost and expense, so that its traffic worthiness and
safety are at no time materially inferior as compared to its condition 10 (ten)
days prior to the last date for submission of the Bid, and in the event of any
material deterioration or damage other than normal wear and tear, undertake
repair thereof. For the avoidance of doubt, the Authority shall undertake only
routine maintenance prior to the Appointed Date, and it shall undertake
special repairs only in the event of excessive deterioration or damage caused
due to unforeseen events such as floods or earthquake.

Environmental Clearances

The Authority represents and warrants that the environmental clearances

required for construction of the Project shall be procured by the Authority
prior to the date of issue of LOA. For the avoidance of doubt, the present
8
status of environmental clearances is specified in Schedule-A.

8
Clause 4.3 may be suitably modified in the event that all the environmental clearances for the
Project Highway have been received or are not required. It should be clearly stated that all the
environmental clearances for the Project Highway have been received; or such environmental
clearances for the Project Highway are not required.

25
 ARTICLE 5
REPRESENTATIONS AND WARRANTIES

Representations and warranties of the Contractor

The Contractor represents and warrants to the Authority that:

it is duly organised and validly existing under the laws of India, and
has full power and authority to execute and perform its obligations
under this Agreement and to carry out the transactions contemplated
hereby;

it has taken all necessary corporate and/or other actions under

Applicable Laws to authorise the execution and delivery of this
Agreement and to validly exercise its rights and perform its
obligations under this Agreement;

this Agreement constitutes its legal, valid and binding obligation,

enforceable against it in accordance with the terms hereof, and its
obligations under this Agreement will be legally valid, binding and
enforceable obligations against it in accordance with the terms
hereof;

it is subject to the laws of India, and hereby expressly and irrevocably

waives any immunity in any jurisdiction in respect of this Agreement
or matters arising thereunder including any obligation, liability or
responsibility hereunder;

the information furnished in the Bid and as updated on or before the

date of this Agreement is true and accurate in all respects as on the
date of this Agreement;

the execution, delivery and performance of this Agreement will not

conflict with, result in the breach of, constitute a default under, or
accelerate performance required by any of the terms of its
memorandum and articles of association or any Applicable Laws or
any covenant, contract, agreement, arrangement, understanding,
decree or order to which it is a party or by which it or any of its
properties or assets is bound or affected;

there are no actions, suits, proceedings, or investigations pending or,

to its knowledge, threatened against it at law or in equity before any
court or before any other judicial, quasi-judicial or other authority,
the outcome of which may result in the breach of this Agreement or
which individually or in the aggregate may result in any material
impairment of its ability to perform any of its obligations under this
Agreement;

26
 it has no knowledge of any violation or default with respect to any
order, writ, injunction or decree of any court or any legally binding
order of any Government Instrumentality which may result in any
material adverse effect on its ability to perform its obligations under
this Agreement and no fact or circumstance exists which may give
rise to such proceedings that would adversely affect the performance
of its obligations under this Agreement;

it has complied with Applicable Laws in all material respects and has
not been subject to any fines, penalties, injunctive relief or any other
civil or criminal liabilities which in the aggregate have or may have a
material adverse effect on its ability to perform its obligations under
this Agreement;

no representation or warranty by it contained herein or in any other

document furnished by it to the Authority or to any Government
Instrumentality in relation to Applicable Permits contains or will
contain any untrue or misleading statement of material fact or omits
or will omit to state a material fact necessary to make such
representation or warranty not misleading;

no sums, in cash or kind, have been paid or will be paid, by it or on

its behalf, to any person by way of fees, commission or otherwise for
securing the contract or entering into this Agreement or for
influencing or attempting to influence any officer or employee of the
Authority in connection therewith;

all information provided by the {selected bidder/ members of the

Consortium} in response to the Request for Qualification and
Request for Proposals or otherwise, is to the best of its knowledge
and belief, true and accurate in all material respects; and

nothing contained in this Agreement shall create any contractual

relationship or obligation between the Authority and any Sub-
contractors, designers, consultants or agents of the Contractor.

Representations and warranties of the Authority

The Authority represents and warrants to the Contractor that:

it has full power and authority to execute, deliver and perform its
obligations under this Agreement and to carry out the transactions
contemplated herein and that it has taken all actions necessary to
execute this Agreement, exercise its rights and perform its
obligations, under this Agreement;

it has taken all necessary actions under the Applicable Laws to

authorise the execution, delivery and performance of this Agreement;

27
 it has the financial standing and capacity to perform its obligations
under this Agreement;

this Agreement constitutes a legal, valid and binding obligation

enforceable against it in accordance with the terms hereof;

it has no knowledge of any violation or default with respect to any

order, writ, injunction or any decree of any court or any legally
binding order of any Government Instrumentality which may result in
any material adverse effect on the Authority‟s ability to perform its
obligations under this Agreement;

it has complied with Applicable Laws in all material respects;

it has good and valid right to the Site and has the power and authority
to grant the Right of Way in respect thereof to the Contractor; and

it has procured Right of Way and environment clearances such that

the Contractor can commence construction forthwith on 90% (ninety
per cent) of the total length of the Project Highway.

Disclosure

In the event that any occurrence or circumstance comes to the attention of

either Party that renders any of its aforesaid representations or warranties
untrue or incorrect, such Party shall immediately notify the other Party of the
same. Such notification shall not have the effect of remedying any breach of
the representation or warranty that has been found to be untrue or incorrect
nor shall it adversely affect or waive any obligation of either Party under this
Agreement.

28
 ARTICLE 6
DISCLAIMER
Disclaimer

The Contractor acknowledges that prior to the execution of this Agreement, the
Contractor has, after a complete and careful examination, made an independent
evaluation of the Request for Qualification, Request for Proposal, Scope of the
Project, Specifications and Standards of design, construction and maintenance,
Site, local conditions, physical qualities of ground, subsoil and geology, traffic
volumes, suitability and availability of access routes to the Site and all
information provided by the Authority or obtained, procured or gathered
otherwise, and has determined to its satisfaction the accuracy or otherwise
thereof and the nature and extent of difficulties, risks and hazards as are likely to
arise or may be faced by it in the course of performance of its obligations
hereunder. Save as provided in Clause 4.1.2 and Clause 5.2, the Authority
makes no representation whatsoever, express, implicit or otherwise, regarding
the accuracy, adequacy, correctness, reliability and/or completeness of any
assessment, assumptions, statement or information provided by it and the
Contractor confirms that it shall have no claim whatsoever against the Authority
in this regard.

The Contractor acknowledges and hereby accepts to have satisfied itself as to

the correctness and sufficiency of the Contract Price.

The Contractor acknowledges and hereby accepts the risk of inadequacy,

mistake or error in or relating to any of the matters set forth in Clause 6.1.1
above and hereby acknowledges and agrees that the Authority shall not be
liable for the same in any manner whatsoever to the Contractor, or any
person claiming through or under any of them, and shall not lead to any
adjustment of Contract Price or Scheduled Completion Date.

The Parties agree that any mistake or error in or relating to any of the matters
set forth in Clause 6.1.1 above shall not vitiate this Agreement, or render it
voidable.

In the event that either Party becomes aware of any mistake or error relating
to any of the matters set forth in Clause 6.1.1 above, that Party shall
immediately notify the other Party, specifying the mistake or error.

Except as otherwise provided in this Agreement, all risks relating to the

Project shall be borne by the Contractor; and the Authority shall not be liable
in any manner for such risks or the consequences thereof.

29
 Part III
Construction and Maintenance

30
 ARTICLE 7
PERFORMANCE SECURITY

Performance Security

The Contractor shall, for the performance of its obligations hereunder during
the Construction Period, provide to the Authority, within 10 (ten) days of the
date of this Agreement, an irrevocable and unconditional guarantee from a
Bank in the form set forth in Schedule-G (the “Performance Security”) for an
amount equal to 5% (five percent) of the Contract Price. The Performance
Security shall be valid until 60 (sixty) days after the Defects Liability Period.
Until such time the Performance Security is provided by the Contractor
pursuant hereto and the same comes into effect, the Bid Security shall remain
in force and effect, and upon such provision of the Performance Security, the
Authority shall release the Bid Security to the Contractor.
The Contractor shall alongwith the Performance Security provide to the
Authority an irrevocable and unconditional guarantee from a Bank for a sum
equivalent to Rs. ......... crore( Rupees .... crore) in the form set forth in
Schedule-G (the "Additional Performance Security"), to be modified, mutatis
mutandis, for this purpose as security to the Authority if the Bid Price
offered by the Contractor is lower by more than 10% with respect to the
Estimated Project Cost. Additional Performance Security shall be calculated
as under:

If the bid price offered by the Contractor is lower than 10% but upto 20%
of the Estimated Project Cost, then the Additional Performance Security
shall be calculated @20% of the difference in the (a) Estimated Project
Cost (as mentioned in RFP)-10% of the Estimated Project Cost and (b)
the Bid Price offered by the selected Bidder.
If the bid price offered by the Contractor is lower than 20% of the
Estimated Project Cost, then the Additional Performance Security shall
be calculated @30% of the difference in the (a) Estimated Project Cost
(as mentioned in RFP)-10% of the Estimated Project Cost and (b) the Bid
Price offered by the selected Bidder.
(iii)The Additional Performance Security shall be valid until 28 (twenty
eight) days after the issue of Completion Certificate under Article 12 of
this Agreement.
The Additional Performance Security shall not be treated as part of
Performance Security.

Notwithstanding anything to the contrary contained in this Agreement, the

Parties agree that in the event of failure of the Contractor to provide the
Performance Security in accordance with the provisions of Clause 7.1.1 and
within the time specified therein or such extended period as may be provided
by the Authority, in accordance with the provisions of Clause 7.1.3, the
Authority may encash the Bid Security and appropriate the proceeds thereof
31
 as Damages, and thereupon all rights, privileges, claims and entitlements of
the Contractor under or arising out of this Agreement shall be deemed to
have been waived by, and to have ceased with the concurrence of the
Contractor, and this Agreement shall be deemed to have been terminated by
mutual agreement of the Parties.

In the event the Contractor fails to provide the Performance Security within
10 (ten) days of this Agreement, it may seek extension of time for a period
not exceeding 30 (Thirty) days on payment of Damages for such extended
period in a sum calculated at the rate of 0.01% (zero point zero one per cent)
of the Contract Price for each day until the Performance Security is provided.
For the avoidance of doubt the agreement shall be deemed to be terminated
on expiry of additional 30 days time period and Bid security shall be
encashed by the Authority.

Extension of Performance Security

The Contractor may initially provide the Performance Security for a period
of 2 (two) years; provided that it shall procure the extension of the validity of
the Performance Security, as necessary, at least 2 (two) months prior to the
date of expiry thereof. Upon the Contractor providing an extended
Performance Security, the previous Performance Security shall be deemed to
be released and the Authority shall return the same to the Contractor within a
period of 7 (seven) business days from the date of submission of the
extended Performance Security.

Appropriation of Performance Security

Upon occurrence of a Contractor‟s Default, the Authority shall, without

prejudice to its other rights and remedies hereunder or in law, be entitled to
encash and appropriate the relevant amounts from the Performance Security
as Damages for such Contractor‟s Default.

Upon such encashment and appropriation from the Performance Security, the
Contractor shall, within 30 (thirty) days thereof, replenish, in case of partial
appropriation, to its original level the Performance Security, and in case of
appropriation of the entire Performance Security provide a fresh
Performance Security, as the case may be, and the Contractor shall, within
the time so granted, replenish or furnish fresh Performance Security as
aforesaid failing which the Authority shall be entitled to terminate the
Agreement in accordance with Article 23. Upon replenishment or furnishing
of a fresh Performance Security, as the case may be, as aforesaid, the
Contractor shall be entitled to an additional Cure Period of 30 (thirty) days
for remedying the Contractor‟s Default, and in the event of the Contractor
not curing its default within such Cure Period, the Authority shall be entitled
to encash and appropriate such Performance Security as Damages, and to
terminate this Agreement in accordance with Article 23.

7.3.3 The Additional Performance Security shall be encashed, in case the

32
 Contractor cannot achieve the Milestones –II/III/IV … within the prescribed
period as per this Agreement due to the fault of the Contractor.

Release of Performance Security

The Authority shall return the Performance Security to the Contractor within
60 (sixty) days of the later of the expiry of the Maintenance Period or the
Defects Liability Period under this Agreement. Notwithstanding the
aforesaid, the Parties agree that the Authority shall not be obliged to release
the Performance Security until all Defects identified during the Defects
Liability Period have been rectified.

The Authority shall return the Additional Performance Security to the

Contractor within 28 (twenty eight) days from the date of issue of
Completion Certificate under Article 12 of this Agreement.
9
Retention Money
From every payment for Works due to the Contractor in accordance with the
provisions of Clause 19.5, the Authority shall deduct 6% (six per cent)
thereof as guarantee money for performance of the obligations of the
Contractor during the Construction Period (the “Retention Money”) subject
to the condition that the maximum amount of Retention Money shall not
exceed 5% (five per cent) of the Contract Price.

Upon occurrence of a Contractor‟s Default, the Authority shall, without

prejudice to its other rights and remedies hereunder or in law, be entitled to
appropriate the relevant amounts from the Retention Money as Damages for
such Contractor‟s Default.

The Contractor may, upon furnishing an irrevocable and unconditional bank

guarantee substantially in the form provided at Annex-II of Schedule-G,
require the Authority to refund the Retention Money deducted by the
Authority under the provisions of Clause 7.5.1. Provided that the refund
hereunder shall be made in tranches of not less than 1% (one per cent) of the
Contract Price.

Within 15 (fifteen) days of the date of issue of the Completion Certificate,

the Authority shall discharge the bank guarantees furnished by the
Contractor under the provisions of Clause 7.5.3 and refund the balance of
Retention Money remaining with the Authority after adjusting the amounts
appropriated under the provisions of Clause 7.5.2 and the amounts refunded
under the provisions of Clause 7.5.3.

The Parties agree that in the event of Termination of this Agreement, the

The Authority may, in its discretion, omit Clause 7.5 and in lieu thereof increase the Performance
Security under Clause 7.1 from 7.5% (seven point five per cent) to 10% (ten per cent).

33
Retention Money and the bank guarantees specified in this Clause 7.5 shall
be treated as if they are Performance Security and shall be reckoned as such
for the purposes of Termination Payment under Clause 23.6.

34
 ARTICLE 8
RIGHT OF WAY

The Site

The site of the Project Highway (the “Site”) shall comprise the site described
in Schedule-A in respect of which the Right of Way shall be provided by the
Authority to the Contractor. The Authority shall be responsible for:

acquiring and providing Right of Way on the Site in accordance with

the alignment finalised by the Authority, free from all encroachments
and encumbrances, and free access thereto for the execution of this
Agreement; and

obtaining licences and permits for environment clearance for the

Project Highway.

Procurement of the Site

The Authority Representative and the Contractor shall, within 30 (thirty)

days of the date of this Agreement, inspect the Site and prepare a
memorandum containing an inventory of the Site including the vacant and
unencumbered land, buildings, structures, road works, trees and any other
immovable property on or attached to the Site. Subject to the provisions of
Clause 8.2.3, such memorandum shall have appended thereto an appendix
(the “Appendix”) specifying in reasonable detail those parts of the Site to
which vacant access and Right of Way has not been given to the Contractor.
Signing of the memorandum, in two counterparts (each of which shall
constitute an original), by the authorised representatives of the Parties shall
be deemed to constitute a valid evidence of giving the Right of Way to the
Contractor for discharging its obligations under and in accordance with the
provisions of this Agreement and for no other purpose whatsoever.

Whenever the Authority is ready to hand over any part or parts of the Site
included in the Appendix, it shall inform the Contractor, by notice, the
proposed date and time such of handing over. The Authority Representative
and the Contractor shall, on the date so notified, inspect the specified parts of
the Site, and prepare a memorandum containing an inventory of the vacant
and unencumbered land, buildings, structures, road works, trees and any
other immovable property on or attached to the Site so handed over. Signing
of the memorandum, in two counterparts (each of which shall constitute an
original), by the authorised representatives of the Parties shall be deemed to
constitute a valid evidence of giving the relevant Right of Way to the
Contractor.

The Authority shall provide the Right of Way to the Contractor in respect of
all land included in the Appendix by the date specified in Schedule-A for
those parts of the Site referred to therein, or no later than 90 (ninety) days of
35
the Appointed Date for those parts of the Site which have not been specified
in Schedule-A, and in the event of delay for any reason other than Force
Majeure or breach of this Agreement by the Contractor, it shall pay to the
Contractor, Damages in a sum calculated in accordance with Clause 8.3.

Notwithstanding anything to the contrary contained in this Clause 8.2, the

Authority shall specify the parts of the Site, if any, for which Right of Way
shall be provided to the Contractor on the dates specified in Schedule-A.
Such parts shall also be included in the Appendix prepared in pursuance of
Clause 8.2.1. For the avoidance of doubt, the Parties expressly agree that the
Appendix shall in no event contain sections of the Project Highway the
cumulative length of which exceeds 10% (ten per cent) of the total length of
the Project Highway.

Damages for delay in handing over the Site

In the event the Right of Way to any part of the Site is not provided by the
Authority on or before the date(s) specified in Clause 8.2 for any reason
other than Force Majeure or breach of this Agreement by the Contractor, the
Authority shall pay Damages to the Contractor in a sum calculated in
accordance with the following formula for and in respect of those parts of the
Site to which the Right of Way has not been provided:

Amount of Damages in Rs. per day per metre = 0.05 x C x 1/L x 1/N

Where

C = the Contract Price; L = length of the Project Highway in metres; and

N = Completion period in days (Appointed Date to Scheduled Completion

Date)

In the event that any Damages are due and payable to the Contractor under
the provisions of this Clause 8.3.1 for delay in providing the Right of Way,
the Contractor shall, subject to the provisions of Clause 10.5, be entitled to
Time Extension equal to the period for which the Damages have become due
and payable under this Clause 8.3.1, save and except that:

if any delays involve time overlaps, the overlaps shall not be

additive; and

such Time Extension shall be restricted only to the Works which are
affected by the delay in providing the Right of Way.

For the avoidance of doubt, the Parties expressly agree that the Damages
specified hereunder and the Time Extension specified in Clause 10.5 shall be
restricted only to failure of the Authority to provide the Right of Way for and
in respect of the width of the roadway, its embankment and a parallel
working strip at least 3 (three) metres wide.
36
Notwithstanding anything to the contrary contained in this Agreement, the
Contractor expressly agrees that Works on all parts of the Site for which
Right of Way is granted within 90 (ninety) days of the Appointed Date, or
with respect to the parts of the Site provided in Schedule-A, no later than the
date(s) specified therein, as the case may be, shall be completed before the
Scheduled Completion Date and shall not qualify for any Time Extension
under the provisions of Clause 8.3.1.

Notwithstanding anything to the contrary contained in this Agreement, the

Authority may at any time withdraw any Works forming part of this
Agreement, subject to such Works not exceeding an aggregate value, such
value to be determined in accordance with Schedule-H, equal to 10(ten)
percent of the Contract Price.

Provided that if any Works cannot be undertaken within the municipal limits
of a town or within any area falling in a reserved forest or wildlife sanctuary,
as the case may be, because the requisite clearances or approvals for
commencing construction of Works therein have not been given within 240
(two hundred and forty) days of the Appointed date, the affected Works shall
be deemed to be withdrawn under the provisions of this Clause 8.3.3 unless
the Parties agree to the contrary, and such Works shall not be computed for
the purposes of the aforesaid ceiling of 10% (ten per cent) hereunder.

In the event of withdrawal of Works under Clause 8.3.3, the Contract Price
shall be reduced by an amount equal to 90 (ninety) per cent of the value of
the Works withdrawn and the Contractor shall not be entitled to any other
compensation or Damages for the withdrawal of Works.

Provided that if any Works are withdrawn after commencement of the

Construction of such works, the Authority shall pay to the Contractor 110%
(one hundred and ten per cent) of the fair value of the work done, as assessed
by the Authority‟s Engineer:

Site to be free from Encumbrances

Subject to the provisions of Clause 8.2, the Site shall be made available by
the Authority to the Contractor pursuant hereto free from all Encumbrances
and occupations and without the Contractor being required to make any
payment to the Authority on account of any costs, compensation, expenses
and charges for the acquisition and use of such Site for the duration of the
Project Completion Schedule. For the avoidance of doubt, it is agreed that
the existing rights of way, easements, privileges, liberties and appurtenances
to the Site shall not be deemed to be Encumbrances. It is further agreed that,
unless otherwise specified in this Agreement, the Contractor accepts and
undertakes to bear any and all risks arising out of the inadequacy or physical
condition of the Site.

37
Protection of Site from encroachments

On and after signing the memorandum and/or subsequent memorandum

referred to in Clause 8.2.1, and until the issue of the Completion Certificate,
the Contractor shall maintain a round-the-clock vigil over the Site and shall
ensure and procure that no encroachment thereon takes place. During the
Construction Period, the Contractor shall protect the Site from any and all
occupations, encroachments or Encumbrances, and shall not place or create
nor permit any Sub-contractor or other person claiming through or under the
Agreement to place or create any Encumbrance or security threat over all or
any part of the Site or the Project Assets, or on any rights of the Contractor
therein or under this Agreement, save and except as otherwise expressly set
forth in this Agreement. In the event of any encroachment or occupation on
any part of the Site, the Contractor shall report such encroachment or
occupation forthwith to the Authority and undertake its removal at its own
cost and expenses.

Special/temporary Right of Way

The Contractor shall bear all costs and charges for any special or temporary
right of way required by it in connection with access to the Site. The
Contractor shall obtain at its cost such facilities on or outside the Site as may
be required by it for the purposes of the Project Highway and the
performance of its obligations under this Agreement.

Access to the Authority and the Authority’s Engineer

The Right of Way given to the Contractor hereunder shall always be subject
to the right of access of the Authority and the Authority‟s Engineer and their
employees and agents for inspection, viewing and exercise of their rights and
performance of their obligations under this Agreement.

The Contractor shall ensure, subject to all relevant safety procedures, that the
Authority has un-restricted access to the Site during any emergency
situation, as decided by the Authority‟s Engineer.

Geological and archaeological finds

It is expressly agreed that mining, geological or archaeological rights do not

form part of this Agreement with the Contractor for the Works, and the
Contractor hereby acknowledges that it shall not have any mining rights or
interest in the underlying minerals, fossils, antiquities, structures or other
remnants or things either of particular geological or archaeological interest
and that such rights, interest and property on or under the Site shall vest in
and belong to the Authority or the concerned Government Instrumentality.
The Contractor shall take all reasonable precautions to prevent its workmen
or any other person from removing or damaging such interest or property and
shall inform the Authority forthwith of the discovery thereof and comply
with such instructions as the concerned Government Instrumentality may
38
reasonably give for the removal of such property. For the avoidance of
doubt, it is agreed that any reasonable expenses incurred by the Contractor
hereunder shall be reimbursed by the Authority. It is also agreed that the
Authority shall procure that the instructions hereunder are issued by the
concerned Government Instrumentality within a reasonable period.

39
 ARTICLE 9
UTILITIES AND TREES

Existing utilities and roads

Notwithstanding anything to the contrary contained herein, the Contractor

shall ensure that the respective entities owning the existing roads, right of
way, level crossings, structures, or utilities on, under or above the Site are
enabled by it to keep them in continuous satisfactory use, if necessary, by
providing suitable temporary diversions with the authority of the controlling
body of that road, right of way or utility.

Shifting of obstructing utilities

The Contractor shall, in accordance with Applicable Laws and with

assistance of the Authority, cause shifting of any utility (including electric
lines, water pipes and telephone cables) to an appropriate location or
alignment, if such utility or obstruction adversely affects the execution of
Works or Maintenance of the Project Highway in accordance with this
Agreement. The actual cost of such shifting, as approved and communicated
by the entity owning the utility, shall be paid by the Contractor and
reimbursed by the Authority to the Contractor. In the event of any delay in
such shifting by the entity owning the utility beyond a period of 180 (one
hundred and eighty) days from the date of notice by the Contractor to the
entity owning the utility and to the Authority, the Contractor shall be entitled
to Damages in a sum calculated in accordance with the formula specified in
Clause 8.3.1 for the period of delay, and to Time Extension in accordance
with Clause 10.5 for and in respect of the part(s) of the Works affected by
such delay; provided that if the delays involve any time overlaps, the
overlaps shall not be additive.

New utilities

The Contractor shall allow, subject to such conditions as the Authority may
specify, access to, and use of the Site for laying telephone lines, water pipes,
electric cables or other public utilities. Where such access or use causes any
financial loss to the Contractor, it may require the user of the Site to pay
compensation or damages as per Applicable Laws. For the avoidance of
doubt, it is agreed that use of the Site under this Clause 9.3 shall not in any
manner relieve the Contractor of its obligation to construct and maintain the
Project Highway in accordance with this Agreement and any damage caused
by such use shall be restored forthwith at the cost of the Authority.

The Authority may, by notice, require the Contractor to connect any

adjoining road to the Project Highway, and the connecting portion thereof
falling within the Site shall be constructed by the Contractor at the
Authority‟s cost in accordance with Article 10.

40
The Authority may by notice require the Contractor to connect, through a
paved road, any adjoining service station, hotel, motel or any other public
facility or amenity to the Project Highway, whereupon the connecting
portion thereof that falls within the Site shall be constructed by the
Contractor on payment of the cost. The cost to be paid by the Authority to
the Contractor shall be determined by the Authority‟s Engineer. For the
avoidance of doubt, in the event such road is to be constructed for the benefit
of any entity, the Authority may require such entity to make an advance
deposit with the Contractor or the Authority, as the case may be, of an
amount equal to the estimated cost as determined by the Authority‟s
Engineer and such advance shall be adjusted against the cost of construction
as determined by the Authority‟s Engineer hereunder.

In the event the construction of any Works is affected by a new utility or

works undertaken in accordance with this Clause 9.3, the Contractor shall be
entitled to a reasonable Time Extension as determined by the Authority‟s
Engineer.

Felling of trees

The Authority shall assist the Contractor in obtaining the Applicable Permits
for felling of trees to be identified by the Authority for this purpose if and
only if such trees cause a Material Adverse Effect on the construction or
maintenance of the Project Highway. The cost of such felling shall be borne
by the Authority and in the event of any delay in felling thereof for reasons
beyond the control of the Contractor; it shall be excused for failure to
perform any of its obligations hereunder if such failure is a direct
consequence of delay in the felling of trees. The Parties hereto agree that the
felled trees shall be deemed to be owned by the Authority and shall be
disposed in such manner and subject to such conditions as the Authority may
in its sole discretion deem appropriate. For the avoidance of doubt, the
Parties agree that if any felling of trees hereunder is in a forest area, the
Applicable Permit thereof shall be procured by the Authority within the time
specified in the Agreement.

41
 ARTICLE 10
DESIGN AND CONSTRUCTION OF THE PROJECT HIGHWAY

Obligations prior to commencement of Works

Within 20 (twenty) days of the Appointed Date, the Contractor shall:

appoint its representative, duly authorised to deal with the Authority

in respect of all matters under or arising out of or relating to this
Agreement;

appoint a design director (the “Design Director”) who will head the
Contractor‟s design unit and shall be responsible for surveys,
investigations, collection of data, and preparation of preliminary and
detailed designs;

undertake and perform all such acts, deeds and things as may be
necessary or required before commencement of Works under and in
accordance with this Agreement, the Applicable Laws and
Applicable Permits; and

make its own arrangements for quarrying of materials needed for the
Project Highway under and in accordance with the Applicable Laws
and Applicable Permits.

The Authority shall, within 30 (thirty) days of the date of this Agreement,
appoint an engineer (the “Authority’s Engineer”) to discharge the functions
and duties specified in this Agreement, and shall notify to the Contractor the
name, address and the date of appointment of the Authority‟s Engineer
forthwith.

Within 30 (thirty) days of the Appointed Date, the Contractor shall submit to
the Authority and the Authority‟s Engineer a programme (the
“Programme”) for the Works, developed using networking techniques
giving the following details:

Part I Contractor‟s organisation for the Project, the general methods and
arrangements for design and construction, environmental
management plan, Quality Assurance Plan including design quality
plan, traffic management and safety plan covering safety of users and
workers during construction, Contractor‟s key personnel and
equipment.

Part II Programme for completion of all stages of construction given in

Schedule-H and Project Milestones of the Works as specified in
Project Completion Schedule set forth in Schedule-J. The Programme
shall include:

42
 the order in which the Contractor intends to carry out the Works,
including the anticipated timing of design and stages of Works;

the periods for reviews under Clause 10.2;

the sequence and timing of inspections and tests specified in this

Agreement.

The Contractor shall submit a revised programme whenever the previous

programme is inconsistent with the actual progress or with the Contractor‟s
obligations.

Part III Monthly cash flow forecast.

The Contractor shall compute, on the basis of the Drawings prepared in

accordance with Clause 10.2.4, and provide to the Authority‟s Engineer, the
length, area and numbers, as the case may be, in respect of the various items
of work specified in Schedule-H and comprising the Scope of the Project.
The Parties expressly agree that these details shall form the basis for
estimating the interim payments for the Works in accordance with the
provisions of Clause 19.3. For the avoidance of doubt, the sum of payments
to be computed in respect of all the items of work shall not exceed the
Contract Price, as may be adjusted in accordance with the provisions of this
Agreement.

The Contractor shall appoint a safety consultant (the “Safety Consultant”)

to carry out safety audit at the design stage of the Project Highway in
accordance with the Applicable Laws and Good Industry Practice. The
Safety Consultant shall be appointed after proposing to the Authority a panel
of three names of qualified and experienced firms from whom the Authority
may choose one to be the Safety Consultant. Provided, however, that if the
panel is not acceptable to the Authority and the reasons for the same are
furnished to the Contractor, the Contactor shall propose to the Authority a
revised panel of three names from the firms empanelled as safety consultants
by the [Ministry of Road Transport and Highways] for obtaining the consent
of the Authority. The Contractor shall also obtain the consent of the
Authority for the key personnel of the Safety Consultant who shall have
adequate experience and qualifications in safety audit of the highway
projects. The Authority shall, within 15 (fifteen) days of receiving a proposal
from the Contractor hereunder, convey its decision, with reasons, to the
Contractor, and if no such decision is conveyed within the said period, the
Contractor may proceed with engaging of the Safety Consultant.

The safety audit pursuant to Clause 10.1.5 shall be carried out by the Safety
Consultant in respect of all such design details that have a bearing on safety
of Users as well as pedestrians and animals involved in or associated with
accidents. The recommendations of the Safety Consultant shall be
incorporated in the design of the Project Highway and the Contractor shall
forward to the Authority‟s Engineer a certificate to this effect together with
43
the recommendations of the Safety Consultant. In the event that any works
required by the Safety Consultant shall fall beyond the scope of Schedule-B,
Schedule-C or Schedule-D, the Contractor shall make a report thereon and
seek the instructions of the Authority for Change in Scope. For the avoidance
of doubt, the Safety Consultant to be engaged by the Contractor shall be
independent of the design and implementation team of the Contractor.

Design and Drawings

Design and Drawings shall be developed in conformity with the

Specifications and Standards set forth in Schedule-D. In the event, the
Contractor requires any relaxation in design standards due to restricted Right
of Way in any section, the alternative design criteria for such section shall be
provided for review of the Authority‟s Engineer.

The Contractor shall appoint a proof check consultant (the “Proof

Consultant”) after proposing to the Authority a panel of three names of
qualified and experienced firms from whom the Authority may choose one to
be the Proof Consultant. Provided, however, that if the panel is not
acceptable to the Authority and the reasons for the same are furnished to the
Contractor, the Contactor shall propose to the Authority a revised panel of
three names from the firms empanelled as proof consultants by the [Ministry
of Road Transport and Highways] for obtaining the consent of the Authority.
The Contractor shall also obtain the consent of the Authority for two key
personnel of the Proof Consultant who shall have adequate experience and
qualifications in highways and bridges respectively. The Authority shall,
within 15 (fifteen) days of receiving a proposal from the Contractor
hereunder, convey its decision, with reasons, to the Contractor, and if no
such decision is conveyed within the said period, the Contractor may proceed
with engaging of the Proof Consultant.

The Proof Consultant shall:

evolve a systems approach with the Design Director so as to

minimise the time required for final designs and construction
drawings; and

proof check the detailed calculations, drawings and designs, which

have been approved by the Design Director.

In respect of the Contractor‟s obligations with respect to the design and

Drawings of the Project Highway as set forth in Schedule-I, the following
shall apply:

The Contractor shall prepare and submit, with reasonable promptness

and in such sequence as is consistent with the Project Completion
Schedule, three copies each of the design and Drawings, duly
certified by the Proof Consultant, to the Authority‟s Engineer for
review. Provided, however, that in respect of Major Bridges and
44
 Structures, the Authority‟s Engineer may require additional drawings
for its review in accordance with Good Industry Practice.

by submitting the Drawings for review to the Authority‟s Engineer, the

Contractor shall be deemed to have represented that it has determined
and verified that the design and engineering, including field
construction criteria related thereto, are in conformity with the Scope
of the Project, the Specifications and Standards and the Applicable
Laws;

within 15 (fifteen) days of the receipt of the Drawings, the

Authority‟s Engineer shall review the same and convey its
observations to the Contractor with particular reference to their
conformity or otherwise with the Scope of the Project and the
Specifications and Standards. The Contractor shall not be obliged to
await the observations of the Authority‟s Engineer on the Drawings
submitted pursuant hereto beyond the said period of 15 (fifteen) days
and may begin or continue Works at its own discretion and risk;
Provided, however that in case of a Major Bridge or Structure, the
aforesaid period of 15 (fifteen) days may be extended upto 30 (thirty)
days;

if the aforesaid observations of the Authority‟s Engineer indicate that

the Drawings are not in conformity with the Scope of the Project or
the Specifications and Standards, such Drawings shall be revised by
the Contractor in conformity with the provisions of this Agreement
and resubmitted to the Authority‟s Engineer for review. The
Authority‟s Engineer shall give its observations, if any, within 10
(ten) days of receipt of the revised Drawings. In the event the
Contractor fails to revise and resubmit such Drawings to the
Authority‟s Engineer for review as aforesaid, the Authority‟s
Engineer may withhold the payment for the affected works in
accordance with the provisions of Clause 19.5.4. If the Contractor
disputes any decision, direction or determination of the Authority‟s
Engineer hereunder, the Dispute shall be resolved in accordance with
the Dispute Resolution Procedure;

no review and/or observation of the Authority‟s Engineer and/or its

failure to review and/or convey its observations on any Drawings
shall relieve the Contractor of its obligations and liabilities under this
Agreement in any manner nor shall the Authority‟s Engineer or the
Authority be liable for the same in any manner; and if errors,
omissions, ambiguities, inconsistencies, inadequacies or other
Defects are found in the Drawings, they and the construction works
shall be corrected at the Contractor's cost, notwithstanding any
review under this Article 10;

the Contractor shall be responsible for delays in submitting the

Drawing as set forth in Schedule-I caused by reason of delays in
45
 surveys and field investigations, and shall not be entitled to seek any
relief in that regard from the Authority; and

the Contractor warrants that its designers, including any third parties
engaged by it, shall have the required experience and capability in
accordance with Good Industry Practice and it shall indemnify the
Authority against any damage, expense, liability, loss or claim, which
the Authority might incur, sustain or be subject to arising from any
breach of the Contractor‟s design responsibility and/or warranty set
out in this Clause.

Any cost or delay in construction arising from review by the Authority‟s

Engineer shall be borne by the Contractor.

Works shall be executed in accordance with the Drawings provided by the

Contractor in accordance with the provisions of this Clause 10.2 and the
observations of the Authority‟s Engineer thereon as communicated pursuant
to the provisions of Clause 10.2.4 (d). Such Drawings shall not be amended
or altered without prior written notice to the Authority‟s Engineer. If a Party
becomes aware of an error or defect of a technical nature in the design or
Drawings, that Party shall promptly give notice to the other Party of such
error or defect.

Within 90 (ninety) days of the Project Completion Date, the Contractor shall
furnish to the Authority and the Authority‟s Engineer a complete set of as-
built Drawings, in 2 (two) hard copies and in micro film form or in such
other medium as may be acceptable to the Authority, reflecting the Project
Highway as actually designed, engineered and constructed, including an as-
built survey illustrating the layout of the Project Highway and setback lines,
if any, of the buildings and structures forming part of Project Facilities.

Construction of the Project Highway

The Contractor shall construct the Project Highway as specified in Schedule-

B and Schedule-C, and in conformity with the Specifications and Standards
set forth in Schedule-D. The Contractor shall be responsible for the correct
positioning of all parts of the Works, and shall rectify any error in the
positions, levels, dimensions or alignment of the Works. The [650th (six
hundred and fiftieth) day] from the Appointed Date shall be the scheduled
completion date (the “Scheduled Completion Date”) and the Contractor
agrees and undertakes that the construction shall be completed on or before
the Scheduled Completion Date, including any extension thereof.

The Contractor shall construct the Project Highway in accordance with the
Project Completion Schedule set forth in Schedule-J. In the event that the
Contractor fails to achieve any Project Milestone or the Scheduled
Completion Date within a period of 30 (thirty) days from the date set forth in
Schedule-J, unless such failure has occurred due to Force Majeure or for
reasons solely attributable to the Authority, it shall pay Damages to the
46
Authority of a sum calculated at the rate of 0.05% (zero point zero five
percent) of the Contract Price for delay of each day reckoned from the date
specified in Schedule –J and until such Project Milestone is achieved or the
Works are completed; provided that if the period for any or all Project
Milestones or the Scheduled Completion Date is extended in accordance
with the provisions of this Agreement, the dates set forth in Schedule-J shall
be deemed to be modified accordingly and the provisions of this Agreement
shall apply as if Schedule-J has been amended as above; provided further
that in the event the Works are completed within or before the Scheduled
Completion Date including any Time Extension, applicable for that work or
section, the Damages paid under this Clause 10.3.2 shall be refunded by the
Authority to the Contractor, but without any interest thereon. For the
avoidance of doubt, it is agreed that recovery of Damages under this Clause
10.3.2 shall be without prejudice to the rights of the Authority under this
Agreement including the right of Termination thereof. The Parties further
agree that Time Extension hereunder shall only be reckoned for and in
respect of the affected works as specified in Clause 10.5.2.

The Authority shall notify the Contractor of its decision to impose Damages
in pursuance with the provisions of this Clause 10.3. Provided that no
deduction on account of Damages shall be effected by the Authority without
notifying the Contractor of its decision to impose the Damages, and taking
into consideration the representation, if any, made by the Contractor within
20 (twenty) days of such notice. The Parties expressly agree that the total
amount of Damages under Clause 10.3.2 shall not exceed 10% (ten percent)
of the Contract Price.

Maintenance during Construction Period

During the Construction Period, the Contractor shall maintain, at its cost, the
existing lane(s) of the Project Highway so that the traffic worthiness and
safety thereof are at no time materially inferior as compared to their
condition 10 (ten) days prior to the date of this Agreement, and shall
undertake the necessary repair and maintenance works for this purpose;
provided that the Contractor may, at its cost, interrupt and divert the flow of
traffic if such interruption and diversion is necessary for the efficient
progress of Works and conforms to Good Industry Practice; provided further
that such interruption and diversion shall be undertaken by the Contractor
only with the prior written approval of the Authority‟s Engineer which
approval shall not be unreasonably withheld. For the avoidance of doubt, it is
agreed that the Contractor shall at all times be responsible for ensuring safe
operation of the Project Highway. It is further agreed that in the event the
Project includes construction of a bypass or tunnel and realignment of the
existing carriageway, the Contractor shall maintain the existing highway in
such sections until the new Works are open to traffic.

Notwithstanding anything to the contrary contained in this Agreement, in the

event of default by the Contractor in discharging the obligations specified in
Clause 10.4.1 above, the Authority shall get these maintenance works done
47
as recommended by the Authority‟s Engineer to avoid public inconvenience
at the risk and cost of the Contractor in order to keep the road in traffic
worthy condition.

Extension of time for completion

Without prejudice to any other provision of this Agreement for and in respect
of extension of time, the Contractor shall be entitled to extension of time in
the Project Completion Schedule (the “Time Extension”) to the extent that
completion of any Project Milestone is or will be delayed by any of the
following, namely:

delay in providing the Right of Way, environmental clearances or

approval of railway authorities, specified in Clause 4.1.4;

Change of Scope (unless an adjustment to the Scheduled Completion

Date has been agreed under Article 13);

occurrence of a Force Majeure Event;

any delay, impediment or prevention caused by or attributable to the

Authority, the Authority's personnel or the Authority's other
contractors on the Site; and

any other cause or delay which entitles the Contractor to Time

Extension in accordance with the provisions of this Agreement.

The Contractor shall, no later than 15 (fifteen) business days from the
occurrence of an event or circumstance specified in Clause 10.5.1, inform the
Authority‟s Engineer by notice in writing, with a copy to the Authority,
stating in reasonable detail with supporting particulars, the event or
circumstances giving rise to the claim for Time Extension in accordance with
the provisions of this Agreement. Provided that the period of 15 (fifteen)
business days shall be calculated from the date on which the Contractor
became aware, or should have become aware, of the occurrence of such an
event or circumstance.

Provided further that notwithstanding anything to the contrary contained in

this Agreement, Time Extension shall be due and applicable only for the
Works which are affected by the aforesaid events or circumstances and shall
not in any manner affect the Project Completion Schedule for and in respect
of the Works which are not affected hereunder.

In the event of the failure of the Contractor to issue to the Authority‟s

Engineer a notice in accordance with the provisions of Clause 10.5.2 within
the time specified therein, the Contractor shall not be entitled to any Time
Extension and shall forfeit its right for any such claims in future. For the
avoidance of doubt, in the event of failure of the Contractor to issue notice as
specified in this clause 10.5.3, the Authority shall be discharged from all
48
liability in connection with the claim.

The Authority‟s Engineer shall, on receipt of the claim in accordance with

the provisions of Clause 10.5.2, examine the claim expeditiously within the
time frame specified herein. In the event the Authority‟s Engineer requires
any clarifications to examine the claim, the Authority‟s Engineer shall seek
the same within 15 (fifteen) days from the date of receiving the claim. The
Contractor shall, on receipt of the communication of the Authority‟s Engineer
requesting for clarification, furnish the same to the Authority‟s Engineer within
10 (ten) days thereof. The Authority‟s Engineer shall, within a period of 60
(sixty) days from the date of receipt of such clarifications, forward in writing to
the Contractor its determination of Time Extension.

Provided that when determining each extension of time under this Clause
10.5, the Authority‟s Engineer shall review previous determinations and may
increase, but shall not decrease, the total Time Extension.

If the event or circumstance giving rise to the notice has a continuing effect:

a fully detailed claim shall be considered as interim;

the Contractor shall, no later than 10 (ten) days after the close of each
month, send further interim claims specifying the accumulated delay,
the extension of time claimed, and such further particulars as the
Authority‟s Engineer may reasonably require; and

the Contractor shall send a final claim within 30 (thirty) days after the
effect of the event or the circumstance ceases.

Upon receipt of the claim hereunder, the Authority‟s Engineer shall examine
the same in accordance with the provisions of Clause 10.5.4 within a period
of 60 (sixty) days of the receipt thereof.

Incomplete Works
In the event the Contractor fails to complete the Works in accordance with
the Project Completion Schedule, including any Time Extension granted
under this Agreement, the Contractor shall endeavour to complete the
balance work expeditiously and shall pay Damages to the Authority in
accordance with the provisions of Clause 10.3.2 for delay of each day until
the Works are completed in accordance with the provisions of this
Agreement. Recovery of Damages under this Clause shall be without
prejudice to the rights of the Authority under this Agreement including the
right to termination under Clause 23.1.

49
Maintenance Manual
No later than 60 (sixty) days prior to the Project Completion Date, the
Contractor shall, in consultation with the Authority‟s Engineer, evolve a
maintenance manual (the “Maintenance Manual”) for the regular and
preventive maintenance of the Project Highway in conformity with the
Specifications and Standards, safety requirements and Good Industry
Practice, and shall provide 5 (five) copies thereof to the Authority‟s
Engineer. The Authority‟s Engineer shall review the Maintenance Manual
within 15 (fifteen) days of its receipt and communicate its comments to the
Contractor for necessary modifications, if any.

50
 ARTICLE 11
QUALITY ASSURANCE, MONITORING AND SUPERVISION

Quality of Materials and workmanship

The Contractor shall ensure that the Construction, Materials and

workmanship are in accordance with the requirements specified in this
Agreement, Specifications and Standards and Good Industry Practice.

Quality control system

The Contractor shall establish a quality control mechanism to ensure

compliance with the provisions of this Agreement (the “Quality Assurance
Plan” or “QAP”).

The Contractor shall, within 30 (thirty) days of the Appointed Date, submit
to the Authority‟s Engineer its Quality Assurance Plan which shall include
the following:

organisation, duties and responsibilities, procedures, inspections and

documentation;

quality control mechanism including sampling and testing of

Materials, test frequencies, standards, acceptance criteria, testing
facilities, reporting, recording and interpretation of test results,
approvals, check list for site activities, and proforma for testing and
calibration in accordance with the Specifications for Road and Bridge
Works issued by MORTH, relevant IRC specifications and Good
Industry Practice; and

internal quality audit system.

The Authority‟s Engineer shall convey its comments to the Contractor

within a period of 21 (twenty-one) days of receipt of the QAP stating the
modifications, if any, required, and the Contractor shall incorporate those in
the QAP to the extent required for conforming with the provisions of this
Clause 11.2.

The Contractor shall procure all documents, apparatus and instruments, fuel,
consumables, water, electricity, labour, Materials, samples, and qualified
personnel as are necessary for examining and testing the Project Assets and
workmanship in accordance with the Quality Assurance Plan.

The cost of testing of Construction, Materials and workmanship under this

Article 11 shall be borne by the Contractor.

51
Methodology

The Contractor shall, at least 15 (fifteen) days prior to the commencement of

the construction, submit to the Authority‟s Engineer for review the
methodology proposed to be adopted for executing the Works, giving details
of equipment to be deployed, traffic management and measures for ensuring
safety. The Authority‟s Engineer shall complete the review and convey its
comments to the Contractor within a period of 10 (ten) days from the date of
receipt of the proposed methodology from the Contractor.

Inspection and technical audit by the Authority

The Authority or any representative authorised by the Authority in this

behalf may inspect and review the progress and quality of the construction of
Project Highway and issue appropriate directions to the Authority‟s
Engineer and the Contractor for taking remedial action in the event the
Works are not in accordance with the provisions of this Agreement.

External technical audit

At any time during construction, the Authority may appoint an external

technical auditor to conduct an audit of the quality of the Works. The
findings of the audit, to the extent accepted by the Authority, shall be
notified to the Contractor and the Authority‟s Engineer for taking remedial
action in accordance with this Agreement. The Contractor shall provide all
assistance as may be required by the auditor in the conduct of its audit
hereunder. Notwithstanding anything contained in this Clause 11.5, the
external technical audit shall not affect any obligations of the Contractor or
the Authority‟s Engineer under this Agreement.

Inspection of construction records

The Authority shall have the right to inspect the records of the Contractor
relating to the Works.

Monthly progress reports

During the Construction Period, the Contractor shall, no later than 10 (ten)
days after the close of each month, furnish to the Authority and the
Authority‟s Engineer a monthly report on progress of the Works and shall
promptly give such other relevant information as may be required by the
Authority‟s Engineer.

Inspection

The Authority‟s Engineer and its authorised representative shall at all

reasonable times:

have full access to all parts of the Site and to all places from which
natural Materials are being obtained for use in the Works; and
52
 during production, manufacture and construction at the Site and at the
place of production, be entitled to examine, inspect, measure and test
the Materials and workmanship, and to check the progress of
manufacture of Materials.

The Contractor shall give the Authority‟s Engineer and its authorised agents
access, facilities and safety equipment for carrying out their obligations
under this Agreement.

The Authority‟s Engineer shall submit a monthly inspection report (the

“Inspection Report”) to the Authority and the Contractor bringing out the
results of inspections and the remedial action taken by the Contractor in
respect of Defects or deficiencies. For the avoidance of doubt, such
inspection or submission of Inspection Report by the Authority‟s Engineer
shall not relieve or absolve the Contractor of its obligations and liabilities
under this Agreement in any manner whatsoever.

Samples

The Contractor shall submit the following samples of Materials and relevant
information to the Authority‟s Engineer for pre-construction review:

manufacturer's test reports and standard samples of manufactured

Materials; and

samples of such other Materials as the Authority‟s Engineer may

require.

Tests

11.10.1For determining that the Works conform to the Specifications and Standards,
the Authority‟s Engineer shall require the Contractor to carry out or cause to
be carried out tests, at such time and frequency and in such manner as
specified in this Agreement, and in accordance with Good Industry Practice
for quality assurance. The test checks by the Authority‟s Engineer shall
comprise at least 20 (twenty) percent of the quantity or number of tests
prescribed for each category or type of test for quality control by the
Contractor.

11.10.2 In the event that results of any tests conducted under this Clause 11.10
establish any Defects or deficiencies in the Works, the Contractor shall carry
out remedial measures and furnish a report to the Authority‟s Engineer in
this behalf. The Authority‟s Engineer shall require the Contractor to carry
out or cause to be carried out tests to determine that such remedial measures
have brought the Works into compliance with the Specifications and
Standards, and the procedure shall be repeated until such Works conform to
the Specifications and Standards. For the avoidance of doubt, the cost of
such tests and remedial measures in pursuance thereof shall be solely borne
by the Contractor.
53
 Examination of work before covering up

In respect of the work which the Authority‟s Engineer is entitled to examine,

inspect, measure and/or test before it is covered up or put out of view or any
part of the work is placed thereon, the Contractor shall give notice to the
Authority‟s Engineer whenever any such work is ready and before it is
covered up. The Authority‟s Engineer shall then either carry out the
examination, inspection or testing without unreasonable delay, or promptly
give notice to the Contractor that the Authority‟s Engineer does not require
to do so. Provided, however, that if any work is of a continuous nature where
it is not possible or prudent to keep it uncovered or incomplete, the
Contractor shall notify the schedule of carrying out such work to give
sufficient opportunity, not being less than 3 (three) business days‟ notice, to
the Authority‟s Engineer to conduct its inspection, measurement or test
while the work is continuing. Provided further that in the event the
Contractor receives no response from the Authority‟s Engineer within a
period of 3 (three) business days from the date on which the Contractor‟s
notice hereunder is delivered to the Authority‟s Engineer, the Contractor
shall be entitled to assume that the Authority‟s Engineer would not
undertake the said inspection.

Rejection

If, as a result of an examination, inspection, measurement or testing, any

Plant, Materials, design or workmanship is found to be defective or
otherwise not in accordance with the provisions of this Agreement, the
Authority‟s Engineer shall reject the Plant, Materials, design or
workmanship by giving notice to the Contractor, with reasons. The
Contractor shall then promptly make good the Defect and ensure that the
rejected item complies with the requirements of this Agreement.

If the Authority‟s Engineer requires the Plant, Materials, design or

workmanship to be retested, the tests shall be repeated under the same terms
and conditions, as applicable in each case. If the rejection and retesting cause
the Authority to incur any additional costs, such cost shall be recoverable by
the Authority from the Contractor; and may be deducted by the Authority
from any monies due to be paid to the Contractor.

Remedial work

11.13.1 Notwithstanding any previous test or certification, the Authority‟s Engineer

may instruct the Contractor to:

remove from the Site and replace any Plant or Materials which are
not in accordance with the provisions of this Agreement;

remove and re-execute any work which is not in accordance with the
provisions of this Agreement and the Specification and Standards;
and
54
 execute any work which is urgently required for the safety of the
Project Highway, whether because of an accident, unforeseeable
event or otherwise; provided that in case of any work required on
account of a Force Majeure Event, the provisions of Clause 21.6 shall
apply.

If the Contractor fails to comply with the instructions issued by the

Authority‟s Engineer under Clause 11.13.1, within the time specified in the
Authority‟s Engineer‟s notice or as mutually agreed, the Authority‟s
Engineer may advise the Authority to have the work executed by another
agency. The cost so incurred by the Authority for undertaking such work
shall, without prejudice to the rights of the Authority to recover Damages in
accordance with the provisions of this Agreement, be recoverable from the
Contractor and may be deducted by the Authority from any monies due to be
paid to the Contractor.

Delays during construction

Without prejudice to the provisions of Clause 10.3.2, in the event the

Contractor does not achieve any of the Project Milestones or the Authority‟s
Engineer shall have reasonably determined that the rate of progress of Works
is such that Completion of the Project Highway is not likely to be achieved
by the end of the Scheduled Completion Date, it shall notify the same to the
Contractor, and the Contractor shall, within 15 (fifteen) days of such notice,
by a communication inform the Authority‟s Engineer in reasonable detail
about the steps it proposes to take to expedite progress and the period within
which it shall achieve the Project Completion Date.

Quality control records and Documents

The Contractor shall hand over to the Authority‟s Engineer a copy of all its
quality control records and documents before the Completion Certificate is
issued pursuant to Clause 12.2.

Video recording

During the Construction Period, the Contractor shall provide to the Authority
for every calendar quarter, a video recording, which will be compiled into a
3 (three)-hour compact disc or digital video disc, as the case may be,
covering the status and progress of Works in that quarter. The video
recording shall be provided to the Authority no later than 15 (fifteen) days
after the close of each quarter after the Appointed Date.

Suspension of unsafe Construction Works

Upon recommendation of the Authority‟s Engineer to this effect, the
Authority may by notice require the Contractor to suspend forthwith the
whole or any part of the Works if, in the reasonable opinion of the
Authority‟s Engineer, such work threatens the safety of the Users and
pedestrians.
55
The Contractor shall, pursuant to the notice under Clause 11.17.1, suspend
the Works or any part thereof for such time and in such manner as may be
specified by the Authority and thereupon carry out remedial measures to
secure the safety of suspended works, the Users and pedestrians. The
Contractor may by notice require the Authority‟s Engineer to inspect such
remedial measures forthwith and make a report to the Authority
recommending whether or not the suspension hereunder may be revoked.
Upon receiving the recommendations of the Authority‟s Engineer, the
Authority shall either revoke such suspension or instruct the Contractor to
carry out such other and further remedial measures as may be necessary in
the reasonable opinion of the Authority, and the procedure set forth in this
Clause 11.17 shall be repeated until the suspension hereunder is revoked.

Subject to the provisions of Clause 21.6, all reasonable costs incurred for
maintaining and protecting the Works or part thereof during the period of
suspension (the “Preservation Costs”), shall be borne by the Contractor;
provided that if the suspension has occurred as a result of any breach of
this Agreement by the Authority, the Preservation Costs shall be borne by
the Authority.

If suspension of Works is for reasons not attributable to the Contractor, the

Authority‟s Engineer shall determine any Time Extension to which the
Contractor is reasonably entitled.

56
 ARTICLE 12
COMPLETION CERTIFICATE

Tests on completion

At least 30 (thirty) days prior to the likely completion of the Project

Highway, or a Section thereof, the Contractor shall notify the Authority‟s
Engineer of its intent to subject the Project Highway or a Section thereof, to
Tests. The date and time of each of the Tests shall be determined by the
Authority‟s Engineer in consultation with the Contractor, and notified to the
Authority who may designate its representative to witness the Tests. The
Contractor shall either conduct the Tests as directed by the Authority‟s
Engineer or provide such assistance as the Authority‟s Engineer may
reasonably require for conducting the Tests. In the event of the Contractor
and the Authority‟s Engineer failing to mutually agree on the dates for
conducting the Tests, the Contractor shall fix the dates by giving not less
than 10 (ten) days notice to the Authority‟s Engineer.

All Tests shall be conducted in accordance with Schedule-K. The

Authority‟s Engineer shall either conduct or observe, monitor and review the
Tests conducted by the Contractor, as the case may be, and review the results
of the Tests to determine compliance of the Project Highway or a Section
thereof, with Specifications and Standards and if it is reasonably anticipated
or determined by the Authority‟s Engineer during the course of any Test that
the performance of the Project Highway or Section or any part thereof, does
not meet the Specifications and Standards, it shall have the right to suspend
or delay such Test and require the Contractor to remedy and rectify the
Defect or deficiencies. Upon completion of each Test, the Authority‟s
Engineer shall provide to the Contractor and the Authority copies of all Test
data including detailed Test results. For the avoidance of doubt, it is
expressly agreed that the Authority‟s Engineer may require the Contractor to
carry out or cause to be carried out additional Tests, in accordance with
Good Industry Practice, for determining the compliance of the Project
Highway or Section thereof with the Specifications and Standards.

Provisional Certificate

Subject to the provisions of Clause 12.2.5, upon completion of all Works

forming part of the Project Highway, save and except the Works for which
Time Extension has been granted under Clause 10.5, the Authority‟s
Engineer shall, at the request of the Contractor, issue a provisional certificate
of completion substantially in the form set forth in Schedule-L (the
“Provisional Certificate”) if the Tests for and in respect of the completed
Works are successful. The Provisional Certificate shall have appended
thereto a list of outstanding items of work (the “Punch List”) that need to be
completed in accordance with the provisions of this Agreement. The
Contractor undertakes to complete the minor outstanding items of works in
57
respect of those Sections of the Project Highway for which the Provisional
Certificate has been issued, within a period of 30 (thirty) days of the date of
Provisional Certificate, and those parts of the Works in respect of which
Time Extension has been granted, within the extended period thereof. For the
avoidance of doubt, the Parties agree that the Punch List shall include all
Works for which Time Extension has been granted and shall also include any
minor outstanding items of work forming part of the completed Sections if
such works do not materially affect the use of the completed Sections for
their intended purpose. The Parties further agree that Provisional Certificate
shall not be issued if the completed Works can not be safely and reliably
placed in service of the Users thereof.

Upon issue of Provisional Certificate, the provisions of Articles 14 and 17

shall apply to the completed parts of the Project Highway and the property
and ownership of all such completed Works shall vest in the Authority.

If the Authority‟s Engineer determines that the Project Highway or any

completed part thereof does not conform to the provisions of this Agreement
and cannot be safely and reliably placed in operation, it shall forthwith make
a report in this behalf and send copies thereof to the Authority and the
Contractor and withhold issuance of the Provisional Certificate until the
Defects or deficiencies are rectified by the Contractor and Tests are
successful in accordance with this Article 12.

Notwithstanding anything to the contrary contained in Clause 12.2.3, the

Authority may, at any time after receiving a report from the Authority‟s
Engineer under that Clause, direct the Authority‟s Engineer to issue a
Provisional Certificate under Clause 12.2.1 and such direction shall be
complied forthwith.

No Provisional Certificate shall be issued under the provisions of this Clause

12.2 until the Contractor has submitted valid claims for payment of at least
80% (eighty per cent) of the amount arrived at after reducing the lump sum
price specified in Clause 19.1.1 by the amount attributable to works which
have been withdrawn under the provisions of Clause 8.3.3. For the avoidance
of doubt and by way of illustration, the Parties agree that if the Contract
Price specified in Clause 19.1.1 is Rs. 105 cr. (Rs. one hundred and five
crore) and the works withdrawn under Clause 8.3.3 have a value of Rs. 5 cr.
(Rs. five crore), a Provisional Certificate shall not be issued until valid
claims for payment of an amount of Rs. 80 cr. (Rs. eighty crore) have been
submitted by the Contractor in accordance with the provisions of this
Agreement. It is further agreed that all price adjustments made in pursuance
of Clause 19.10 shall not be reckoned for computation of the claims for
payments referred to in this Clause 12.2.5.

58
Completion of remaining Works

All items in the Punch List shall be completed by the Contractor in

accordance with the provisions of this Agreement. For any delay in their
completion other than for the reasons solely attributable to the Authority or
due to Force Majeure, the Authority shall be entitled to recover Damages
from the Contractor in accordance with the provisions of Clause 10.3.2 of
this Agreement.

Completion Certificate

Upon completion of all Works, including the items specified in the Punch
List, and the Authority‟s Engineer determining the Tests to be successful, it
shall forthwith issue to the Contractor and the Authority a certificate
substantially in the form set forth in Schedule-L (the “Completion
Certificate”).

Upon receiving the Completion Certificate, the Contractor shall remove its
equipment, materials, debris and temporary works from the Site within a
period of 30 (thirty) days thereof, failing which the Authority may remove or
cause to be removed, such equipment, materials, debris and temporary works
and recover from the Contractor an amount equal to 120% (one hundred and
twenty per cent) of the actual cost of removal incurred by the Authority.

Without prejudice to the obligations of the Contractor specified in Articles

14 and 17, the property and ownership of all the completed Works forming
part of the Project Highway shall vest in the Authority.

Rescheduling of Tests

If the Authority‟s Engineer certifies to the Authority and the Contractor that
it is unable to issue the Completion Certificate or Provisional Certificate, as
the case may be, because of events or circumstances on account of which the
Tests could not be held or had to be suspended, the Contractor shall be
entitled to re-schedule the Tests and hold the same as soon as reasonably
practicable.

59
 ARTICLE 13
CHANGE OF SCOPE

Change of Scope

The Authority may, notwithstanding anything to the contrary contained in

this Agreement, require the Contractor to make modifications/alterations to
the Works (“Change of Scope”) before the issue of the Completion
Certificate either by giving an instruction or by requesting the Contractor to
submit a proposal for Change of Scope involving additional cost or reduction
in cost. Any such Change of Scope shall be made and valued in accordance
with the provisions of this Article 13.

Change of Scope shall mean:

change in specifications of any item of Works;

omission of any work from the Scope of the Project except under
Clause 8.3.3; provided that, subject to Clause 13.5, the Authority
shall not omit any work under this Clause in order to get it executed
by any other authority; and / or

any additional work, Plant, Materials or services which are not

included in the Scope of the Project, including any associated Tests
on completion of construction.

If the Contractor determines at any time that a Change of Scope will, if

adopted, (i) accelerate completion, (ii) reduce the cost to the Authority of
executing, maintaining or operating the Project Highway, (iii) improve the
efficiency or value to the Authority of the completed Project Highway, or
(iv) otherwise be of benefit to the Authority, it shall prepare a proposal with
relevant details at its own cost. The Contractor shall submit such proposal,
supported with the relevant details and the amount of reduction in the
Contract Price to the Authority to consider such Change of Scope. The
Authority shall, within 15 (fifteen) days of receipt of such proposal, either
accept such Change of Scope with modifications, if any, and initiate
proceedings therefor in accordance with this Article 13 or reject the proposal
and inform the Contractor of its decision. For the avoidance of doubt, the
Parties agree that the Contractor shall not undertake any Change of Scope
without the express consent of the Authority, save and except any Works
necessary for meeting any Emergency.

Procedure for Change of Scope

In the event of the Authority determining that a Change of Scope is

necessary, it may direct the Authority‟s Engineer to issue to the Contractor a
notice specifying in reasonable detail the works and services contemplated
thereunder (the “Change of Scope Notice”).
60
Upon receipt of a Change of Scope Notice, the Contractor shall, with due
diligence, provide to the Authority and the Authority‟s Engineer such
information as is necessary, together with preliminary documentation in
support of:

the impact, if any, which the Change of Scope is likely to have on the
Project Completion Schedule if the works or services are required to
be carried out during the Construction Period; and

the options for implementing the proposed Change of Scope and the
effect, if any, each such option would have on the costs and time
thereof, including the following details:

break down of the quantities, unit rates and cost for different
items of work;

proposed design for the Change of Scope; and

proposed modifications, if any, to the Project Completion

Schedule of the Project Highway.

For the avoidance of doubt, the Parties expressly agree that, subject to the
provisions of Clause 13.4.2, the Contract Price shall be increased or
decreased, as the case may be, on account of Change of Scope.

The Contractor‟s quotation of costs for the Change of Scope shall be

determined on the following principles:

For works where Schedule of Rates (SOR) of concerned circle of

State‟s Public Works Department are available shall be applicable for
determination of costs. In case of non-availability of current SOR, the
available Schedule of Rates shall be applied by updating the same
based on WPI.
For works not similar in nature to the Works being executed, the cost
of work shall be derived on the basis of MORTH Standard Data Book
and the applicable schedule of rates for the relevant circle, as
published by the respective State Government, and such rates shall be
indexed with reference to the WPI once every year, with the base
being the month and year of the publication of the said schedule of
rates; provided, however, that for any item not included in the
schedule of rates, the prevailing market rates as determined by the
Authority‟s Engineer shall apply, and for any item in respect of
which MORTH Standard Data Book does not provide the requisite
details, the Authority‟s Engineer shall determine the rate in
accordance with Good Industry Practice.

61
 Upon reaching an agreement, the Authority shall issue an order (the
“Change of Scope Order”) requiring the Contractor to proceed with the
performance thereof. In the event that the Parties are unable to agree, the
Authority may:

issue a Change of Scope Order requiring the Contractor to proceed with

the performance thereof at the rates and conditions approved by the
Authority till the matter is resolved in accordance with Article 26; or

proceed in accordance with Clause 13.5.

The provisions of this Agreement, insofar as they relate to Works and Tests,
shall apply mutatis mutandis to the works undertaken by the Contractor
under this Article 13.

Payment for Change of Scope

Payment for Change of Scope shall be made in accordance with the payment
schedule specified in the Change of Scope Order.

Restrictions on Change of Scope

No Change of Scope shall be executed unless the Authority has issued the
Change of Scope Order save and except any Works necessary for meeting
any Emergency.

Unless the Parties mutually agree to the contrary, the total value of all
Change of Scope Orders shall not exceed 10 (ten) per cent of the Contract
Price.

Notwithstanding anything to the contrary in this Article 13, no change made

necessary because of any default of the Contractor in the performance of its
obligations under this Agreement shall be deemed to be Change of Scope,
and shall not result in any adjustment of the Contract Price or the Project
Completion Schedule.

Power of the Authority to undertake works

In the event the Parties are unable to agree to the proposed Change of Scope
Orders in accordance with Clause 13.2, the Authority may, after giving
notice to the Contractor and considering its reply thereto, award such works
or services to any person on the basis of open competitive bidding from
amongst bidders who are pre-qualified for undertaking the additional work;
provided that the Contractor shall have the option of matching the first
ranked bid in terms of the selection criteria, subject to payment of 2% (two
$
per cent) of the bid amount to the Authority , and thereupon securing the
$
The Authority shall transfer 75% (seventy five percent) of the amount so received to the first ranked
bidder whose bid shall have been matched by the Contractor.

62
award of such works or services. For the avoidance of doubt, it is agreed that
the Contractor shall be entitled to exercise such option only if it has
participated in the bidding process and its bid does not exceed the first
ranked bid by more than 10% (ten percent) thereof. It is also agreed that the
Contractor shall provide assistance and cooperation to the person who
undertakes the works or services hereunder, but shall not be responsible for
rectification of any Defects and/ or maintenance of works carried out by
other agencies.

The works undertaken in accordance with this Clause 13.5 shall conform to
the Specifications and Standards and shall be carried out in a manner that
minimises the disruption in operation of the Project Highway. The provisions
of this Agreement, insofar as they relate to Works and Tests, shall apply
mutatis mutandis to the works carried out under this Clause 13.5.

63
 ARTICLE 14
MAINTENANCE

Maintenance obligations of the Contractor

The Contractor shall maintain the Project Highway for a period of 4 (four)
years commencing from the date of the Provisional Certificate (the
“Maintenance Period”). For the performance of its Maintenance
obligations, the contractor shall be paid 0.5% of the Contract Price for the
first year and 1%, 1.5%, 2% of the Contract Price for the second, third and
fourth year respectively in case of road projects. But in case of stand alone
Bridge / structure work, the contractor shall be paid 0.25%, 0.5%, 0.5% and
0.5% of the Contract Price for the first, second, third and fourth year
respectively. Amount shall be, inclusive of all taxes. The amount payable for
maintenance shall be adjusted to reflect any increase or decrease arising out
of variation in WPI to be determined in accordance with the provisions of
Clause 19.12. For the avoidance of doubt, it is agreed that in the event no
Provisional Certificate is issued, the Maintenance Period shall commence
from the date of the Completion Certificate. It is further agreed that the
Contract Price hereunder shall be reckoned with reference to the amount
specified in Clause 19.1.1, which shall be adjusted to the extent of Change of
Scope and the works withdrawn under the provisions of Clause 8.3.3, but
shall not include any price adjustments in pursuance of Clause 19.10.

During the Maintenance Period, the Authority shall provide to the Contractor
access to the Site for Maintenance in accordance with this Agreement. The
obligations of the Contractor hereunder shall include:

permitting safe, smooth and uninterrupted flow of traffic on the

Project Highway;

undertaking routine maintenance including prompt repairs of

potholes, cracks, joints, drains, embankments, structures, pavement
markings, lighting, road signs and other traffic control devices;

undertaking repairs to structures;

informing the Authority of any unauthorised use of the Project

Highway;

informing the Authority of any encroachments on the Project

Highway; and

operation and maintenance of all communication, patrolling, and

administrative systems necessary for the efficient maintenance of the
Project Highway in accordance with the provisions of this
Agreement.

64
In respect of any Defect or deficiency not specified in Schedule-E, the
Contractor shall, at its own cost, undertake repair or rectification in
accordance with Good Industry Practice, save and except to the extent that
such Defect or deficiency shall have arisen on account of any default or
neglect of the Authority or a Force Majeure Event.

The Contractor shall remove promptly from the Project Highway any waste
materials (including hazardous materials and waste water), rubbish and other
debris (including, without limitation, accident debris) and keep the Project
Highway in a clean, tidy and orderly condition, and in conformity with the
Applicable Laws, Applicable Permits and Good Industry Practice.

Maintenance Requirements
The Contractor shall ensure and procure that at all times during the
Maintenance Period, the Project Highway conforms to the maintenance
requirements set forth in Schedule-E (the “Maintenance Requirements”).

Maintenance Programme

The Contractor shall prepare a monthly maintenance programme (the

Maintenance Programme”) in consultation with the Authority‟s Engineer
and submit the same to the Authority‟s Engineer not later than 10 (ten) days
prior to the commencement of the month in which the Maintenance is to be
carried out. For this purpose a joint monthly inspection by the Contractor and
the Authority‟s Engineer shall be undertaken. The Maintenance Programme
shall contain the following:

The condition of the road in the format prescribed by the Authority‟s

Engineer;

the proposed maintenance works; and

deployment of resources for maintenance works.

Safety, vehicle breakdowns and accidents

The Contractor shall ensure safe conditions for the Users, and in the event of
unsafe conditions, lane closures, diversions, vehicle breakdowns and
accidents, it shall follow the relevant operating procedures for removal of
obstruction and debris without delay. Such procedures shall conform to the
provisions of this Agreement, Applicable Laws, Applicable Permits and
Good Industry Practice.

The Contractor shall maintain and operate a round-the-clock vehicle rescue

post with one mobile crane having the capacity to lift a truck with a Gross
Vehicle Weight of 30,000 (thirty thousand) kilograms; and such post shall be
located at ****. The Contractor shall promptly remove any damaged
vehicles and debris from the Project Highway to enable safe movement of
traffic and shall report all accidents to the police forthwith.
65
 Lane closure

14.5.1The Contractor shall not close any lane of the Project Highway for
undertaking maintenance works except with the prior written approval of the
Authority‟s Engineer. Such approval shall be sought by the Contractor
through a written request to be made at least 10 (ten) days before the
proposed closure of lane and shall be accompanied by particulars thereof.
Within 5 (five) business days of receiving such request, the Authority‟s
Engineer shall grant permission with such modifications as it may deem
necessary and a copy of such permission shall be sent to the Authority.

Upon receiving the permission pursuant to Clause 14.5.1, the Contractor

shall be entitled to close the designated lane for the period specified therein,
and in the event of any delay in re-opening such lane, the Contractor shall,
for every stretch of 250 (two hundred and fifty) metres, or part thereof, pay
Damages to the Authority calculated at the rate of 0.1% (zero point one per
cent) of the monthly maintenance payment for each day of delay until the
lane has been re-opened for traffic.

Reduction of payment for non-performance of Maintenance obligations

In the event that the Contractor fails to repair or rectify any Defect or
deficiency set forth in Schedule-E within the period specified therein, it shall
be deemed as failure of performance of Maintenance obligations by the
Contractor and the Authority shall be entitled to effect reduction in monthly
lump sum payment for maintenance in accordance with Clause 19.7 and
Schedule-M, without prejudice to the rights of the Authority under this
Agreement, including Termination thereof.

If the nature and extent of any Defect justifies more time for its repair or
rectification than the time specified in Schedule-E, the Contractor shall be
entitled to additional time in conformity with Good Industry Practice. Such
additional time shall be determined by the Authority‟s Engineer and
conveyed to the Contractor and the Authority with reasons thereof.

Authority’s right to take remedial measures

In the event the Contractor does not maintain and/or repair the Project
Highway or any part thereof in conformity with the Maintenance
Requirements, the Maintenance Manual or the Maintenance Programme, as
the case may be, and fails to commence remedial works within 15 (fifteen)
days of receipt of the Maintenance Inspection Report under Clause 15.2 or a
notice in this behalf from the Authority or the Authority‟s Engineer, as the
case may be, the Authority shall, without prejudice to its rights under this
Agreement including Termination thereof, be entitled to undertake such
remedial measures at the cost of the Contractor, and to recover its cost from
the Contractor. In addition to recovery of the aforesaid cost, a sum equal to
20% (twenty per cent) of such cost shall be paid by the Contractor to the
Authority as Damages.
66
Restoration of loss or damage to Project Highway

Save and except as otherwise expressly provided in this Agreement, in the

event that the Project Highway or any part thereof suffers any loss or damage
during the Maintenance from any cause attributable to the Contractor, the
Contractor shall, at its cost and expense, rectify and remedy such loss or
damage forthwith so that the Project Highway conforms to the provisions of
this Agreement.

Overriding powers of the Authority

If in the reasonable opinion of the Authority, the Contractor is in material

breach of its obligations under this Agreement and, in particular, the
Maintenance Requirements, and such breach is causing or likely to cause
material hardship or danger to the Users and pedestrians, the Authority may,
without prejudice to any of its rights under this Agreement including
Termination thereof, by notice require the Contractor to take reasonable
measures immediately for rectifying or removing such hardship or danger, as
the case may be.

In the event that the Contractor, upon notice under Clause 14.9.1, fails to
rectify or remove any hardship or danger within a reasonable period, the
Authority may exercise overriding powers under this Clause 14.9.2 and take
over the performance of any or all the obligations of the Contractor to the
extent deemed necessary by it for rectifying or removing such hardship or
danger; provided that the exercise of such overriding powers by the
Authority shall be of no greater scope and of no longer duration than is
reasonably required hereunder; provided further that any costs and expenses
incurred by the Authority in discharge of its obligations hereunder shall be
recovered by the Authority from the Contractor, and the Authority shall be
entitled to deduct any such costs and expenses incurred from the payments
due to the Contractor under Clause 19.7 for the performance of its
Maintenance obligations.

In the event of a national emergency, civil commotion or any other

circumstances specified in Clause 21.3, the Authority may take over the
performance of any or all the obligations of the Contractor to the extent
deemed necessary by it, and exercise such control over the Project Highway
or give such directions to the Contractor as may be deemed necessary;
provided that the exercise of such overriding powers by the Authority shall
be of no greater scope and of no longer duration than is reasonably required
in the circumstances which caused the exercise of such overriding power by
the Authority. For the avoidance of doubt, it is agreed that the consequences
of such action shall be dealt in accordance with the provisions of Article 21.
It is also agreed that the Contractor shall comply with such instructions as the
Authority may issue in pursuance of the provisions of this Clause 14.9.3, and
shall provide assistance and cooperation to the Authority, on a best effort
basis, for performance of its obligations hereunder.
67
 ARTICLE 15
SUPERVISION AND MONITORING DURING MAINTENANCE

Inspection by the Contractor

The Authority‟s Engineer shall undertake regular inspections to evaluate

continuously the compliance with the Maintenance Requirements.

The Contractor shall carry out a detailed pre-monsoon inspection of all

bridges, culverts and drainage system in accordance with the guidelines
contained in IRC: SP35. Report of this inspection together with details of
proposed maintenance works as required shall be conveyed to the
Authority‟s Engineer forthwith. The Contractor shall complete the proposed
maintenance works before the onset of the monsoon and send a compliance
report to the Authority‟s Engineer. Post monsoon inspection shall be
undertaken by the Contractor and the inspection report together with details
of any damages observed and proposed action to remedy the same shall be
conveyed to the Authority‟s Engineer forthwith.

Inspection and payments

The Authority‟s Engineer may inspect the Project Highway at any time, but
at least once every month, to ensure compliance with the Maintenance
Requirements. It shall make a report of such inspection (“Maintenance
Inspection Report”) stating in reasonable detail the Defects or deficiencies,
if any, with particular reference to the Maintenance Requirements, the
Maintenance Manual, and the Maintenance Programme, and send a copy
thereof to the Authority and the Contractor within 10 (ten) days of such
inspection.

After the Contractor submits to the Authority‟s Engineer the Monthly

Maintenance Statement for the Project Highway pursuant to Clause 19.6, the
Authority‟s Engineer shall carry out an inspection within 10 (ten) days to
certify the amount payable to the Contractor. The Authority‟s Engineer shall
inform the Contractor of its intention to carry out the inspection at least 3
(three) business days in advance of such inspection. The Contractor shall
assist the Authority‟s Engineer in verifying compliance with the
Maintenance Requirements.

For each case of non-compliance of Maintenance Requirements as specified

in the inspection report of the Authority‟s Engineer, the Authority‟s
Engineer shall calculate the amount of reduction in payment in accordance
with the formula specified in Schedule-M.

Any deduction made on account of non-compliance will not be paid

subsequently even after establishing the compliance thereof. Such deductions
will continue to be made every month until the compliance is procured.

68
Tests

For determining that the Project Highway conforms to the Maintenance

Requirements, the Authority‟s Engineer shall require the Contractor to carry
out, or cause to be carried out, tests specified by it in accordance with Good
Industry Practice. The Contractor shall, with due diligence, carry out or
cause to be carried out all such tests in accordance with the instructions of
the Authority‟s Engineer and furnish the results of such tests forthwith to the
Authority‟s Engineer.

Reports of unusual occurrence

The Contractor shall, during the Maintenance Period, prior to the close of
each day, send to the Authority and the Authority‟s Engineer, by facsimile or
e-mail, a report stating accidents and unusual occurrences on the Project
Highway relating to the safety and security of the Users and Project
Highway. A monthly summary of such reports shall also be sent within 3
(three) business days of the closing of month. For the purposes of this Clause
15.4, accidents and unusual occurrences on the Project Highway shall
include:

accident, death or severe injury to any person;

damaged or dislodged fixed equipment;

flooding of Project Highway; and

any other unusual occurrence.

69
 ARTICLE 16
TRAFFIC REGULATION

Traffic regulation by the Contractor

The Contractor shall take all the required measures and make arrangements
for the safety of Users during the construction and maintenance of the Project
Highway or a Section thereof in accordance with the provisions of MORTH
Specifications. It shall provide, erect and maintain all such barricades, signs,
markings, flags, and lights as may be required by Good Industry Practice for
the safety of the traffic passing through the Section under construction or
maintenance.

All works shall be carried out in a manner creating least interference to

traffic passing through the Project Highway or a Section thereof. In stretches
where construction or maintenance works on the carriageway are taken up,
the Contractor shall ensure that proper passage is provided for the traffic.
Where it is not possible or safe to allow traffic on part width of the
carriageway, a temporary diversion of proper specifications shall be
constructed by the Contractor at its own cost. The Contractor shall take prior
approval of the Authority‟s Engineer for any proposed arrangement for
traffic regulation during Construction and Maintenance, which approval shall
not be unreasonably withheld.

70
 ARTICLE 17
DEFECTS LIABILITY

Defects Liability Period

The Contractor shall be responsible for all the Defects and deficiencies,
except usual wear and tear in the Project Highway or any Section thereof, till
the expiry of a period of 4 (four) years commencing from the date of
Provisional Certificate (the “Defects Liability Period”). Provided that the
Defects Liability Period shall in no case be less than 42 (forty two) months
from the date of Completion Certificate for and in respect of works for which
Time Extension was granted. Provided further that in the event no
Provisional Certificate is issued, the Defects Liability Period shall commence
from the date of the Completion Certificate. For the avoidance of doubt, any
repairs or restoration on account of usual wear or tear in the Project Highway
or any Section thereof shall form a part of the Maintenance obligations of the
Contractor as specified in Article 14.

Deleted.

Remedying Defects

Save and except as provided in Clause 14.1.2, the Contractor shall repair or
rectify all Defects and deficiencies observed by the Authority‟s Engineer
during the Defects Liability Period within a period of 15 (fifteen) days from
the date of notice issued by the Authority‟s Engineer in this behalf, or within
such reasonable period as may be determined by the Authority‟s Engineer at
the request of the Contractor, in accordance with Good Industry Practice.

Cost of remedying Defects

For the avoidance of doubt, any repair or rectification undertaken in

accordance with the provisions of Clause 17.2, including any additional
testing, shall be carried out by the Contractor at its own risk and cost, to the
extent that such rectification or repair is attributable to:

the design of the Project;

Plant, Materials or workmanship not being in accordance with this

Agreement and the Specifications and Standards;

improper maintenance during construction of the Project Highway by

the Contractor; and/ or

failure by the Contractor to comply with any other obligation under

this Agreement.

71
Contractor’s failure to rectify Defects

In the event that the Contractor fails to repair or rectify such Defect or
deficiency within the period specified in Clause 17.2, the Authority shall be
entitled to get the same repaired, rectified or remedied at the Contractor‟s
cost so as to make the Project Highway conform to the Specifications and
Standards and the provisions of this Agreement. All costs consequent
thereon shall, after due consultation with the Authority and the Contractor,
be determined by the Authority‟s Engineer. The cost so determined and an
amount equal to twenty percent of the cost as Damages shall be recoverable
by the Authority from the Contractor and may be deducted by the Authority
from any monies due to the Contractor.

Contractor to search cause

The Authority‟s Engineer may instruct the Contractor to examine the cause
of any Defect in the Works or part thereof before the expiry of the Defects
Liability Period.

In the event any Defect identified under Clause 17.5.1 is attributable to the
Contractor, the Contractor shall rectify such Defect within the period
specified by the Authority‟s Engineer, and shall bear the cost of the
examination and rectification of such Defect.

In the event such Defect is not attributable to the Contractor, the Authority‟s
Engineer shall, after due consultation with the Authority and the Contractor,
determine the costs incurred by the Contractor on such examination and
notify the same to the Contractor, with a copy to the Authority, and the
Contractor shall be entitled to payment of such costs by the Authority.

Extension of Defects Liability Period

The Defects Liability Period shall be deemed to be extended till the

identified Defects under Clause 17.2 have been remedied.

72
 ARTICLE 18
AUTHORITY’S ENGINEER

Appointment of the Authority’s Engineer

The Authority shall appoint a consulting engineering firm substantially in

accordance with the selection criteria set forth in Schedule-N, to be the
engineer under this Agreement (the “Authority’s Engineer”).

The Authority‟s Engineer should be appointed within 30 days from the date
of this Agreement or before declaration of Appointed Date. The Authority
shall notify the appointment or replacement of the Authority‟s Engineer to
the Contractor.

The staff of the Authority‟s Engineer shall include suitably qualified engineers
and other professionals who are competent to assist the Authority‟s
Engineer to carry out its duties.

Duties and authority of the Authority’s Engineer

The Authority‟s Engineer shall perform the duties and exercise the authority
in accordance with the provisions of this Agreement, and substantially in
accordance with the terms of reference (“Terms of Reference” or “TOR”)
set forth in Annex 1 of Schedule N, but subject to obtaining prior written
approval of the Authority before determining:

any Time Extension;

any additional cost to be paid by the Authority to the Contractor;

the Termination Payment; or

any other matter which is not specified in (a), (b) or (c) above and
which creates an obligation or liability on either Party for a sum
exceeding Rs. 5,000,000 (Rs. fifty lakh).

No decision or communication of the Authority‟s Engineer shall be effective

or valid unless it is accompanied by an attested true copy of the approval of
the Authority for and in respect of any matter specified in Clause 18.2.1.

The Authority‟s Engineer shall submit regular periodic reports, at least once
every month, to the Authority in respect of its duties and functions under this
Agreement. Such reports shall be submitted by the Authority‟s Engineer
within 10 (ten) days of the beginning of every month. For the avoidance of
doubt, the Authority‟s Engineer shall include in its report, compliance of the
recommendations of the Safety Consultant.

73
 Delegation by the Authority’s Engineer

The Authority‟s Engineer may, by order in writing, delegate any of his

duties and responsibilities to suitably qualified and experienced personnel
who are accountable to Authority‟s Engineer, or may revoke any such
delegation, under intimation to the Authority and the Contractor. Provided,
however, that the Authority‟s Engineer shall be responsible and liable for all
actions and omissions of such personnel.

Any failure of the Authority‟s Engineer to disapprove any work, Plant or

Materials shall not constitute approval, and shall therefore not prejudice the
right of the Authority to reject the work, Plant or Materials, which is not in
accordance with the provisions of this Agreement and the Specifications and
Standards.

Notwithstanding anything stated in Clause 18.3.1 above, the Authority‟s

Engineer shall not delegate the authority to refer any matter for the
Authority‟s prior approval wherever required in accordance with the
provisions of Clause 18.2.

Instructions of the Authority’s Engineer

The Authority‟s Engineer may issue to the Contractor instructions for

remedying any Defect. The Contractor shall take such instructions from the
Authority‟s Engineer, or from an assistant to whom appropriate authority has
been delegated under Clause 18.3.

The instructions issued by the Authority‟s Engineer shall be in writing.

However, if the Authority‟s Engineer issues any oral instructions to the
Contractor, it shall confirm in writing the oral instructions within 2 (two)
working days of issuing them.

In case the Contractor does not receive the confirmation of the oral
instruction within the time specified in Clause 18.4.2, the Contractor shall
seek the written confirmation of the oral instructions from the Authority‟s
Engineer. The Contractor shall obtain acknowledgement from the
Authority‟s Engineer of the communication seeking written confirmation. In
case of failure of the Authority‟s Engineer or its delegated assistant to reply
to the Contractor within 2 (two) days of the receipt of the communication
from the Contractor, the Contractor may not carry out the instruction.

In case of any dispute on any of the instructions issued by the delegated assistant,
the Contractor may refer the dispute to the Authority‟s Engineer, who shall
then confirm, reverse or vary the instructions within [3 (three)] business days
of the dispute being referred.

74
Determination by the Authority’s Engineer

The Authority‟s Engineer shall consult with each Party in an endeavour to

reach agreement wherever this Agreement provides for the determination of
any matter by the Authority‟s Engineer. If such agreement is not achieved,
the Authority‟s Engineer shall make a fair determination in accordance with
this Agreement having due regard to all relevant circumstances. The
Authority‟s Engineer shall give notice to both the Parties of each agreement
or determination, with supporting particulars.

Each Party shall give effect to each agreement or determination made by the
Authority‟s Engineer in accordance with the provisions of this Agreement.
Provided, however, that if any Party disputes any instruction, decision,
direction or determination of the Authority‟s Engineer, the Dispute shall be
resolved in accordance with the Dispute Resolution Procedure.

Remuneration of the Authority’s Engineer

The remuneration, cost and expenses of the Authority‟s Engineer shall be

paid by the Authority.

Termination of the Authority’s Engineer

The Authority may, in its discretion, replace the Authority‟s Engineer at any
time, but only after appointment of another Authority‟s Engineer in
accordance with Clause 18.1.

If the Contractor has reasons to believe that the Authority‟s Engineer is not
discharging its duties and functions in accordance with the provisions of this
Agreement, it may make a written representation to the Authority and seek
termination of the appointment of the Authority‟s Engineer. Upon receipt of
such representation, the Authority shall hold a tripartite meeting with the
Contractor and Authority‟s Engineer and make best efforts for an amicable
resolution of the representation. In the event that the appointment of the
Authority‟s Engineer is terminated hereunder, the Authority shall appoint
forthwith another Authority‟s Engineer in accordance with Clause 18.1.

75
 Part IV
Financial Covenants

76
 ARTICLE 19
PAYMENTS

Contract Price

The Authority shall make payments to the Contractor for the Works on the
basis of the lump sum price accepted by the Authority in consideration of the
obligations specified in this Agreement for an amount of Rs. … … … …
(Rs. … … … … … … … …) (the “Contract Price”), which shall be subject
to adjustments in accordance with the provisions of this Agreement. For the
avoidance of doubt, the Parties expressly agree that the Contract Price shall
not include the cost of Maintenance which shall be paid separately in
accordance with the provisions of Clause 19.7. The Parties further agree that
save and except as provided in this Agreement, the Contract Price shall be
valid and effective until issue of Completion Certificate.

The Contract Price includes all duties, taxes, royalty, and fees that may be
levied in accordance with the laws and regulations in force as on the Base
Date on the Contractor's equipment, Plant, Materials and supplies acquired
for the purpose of this Agreement and on the services performed under this
Agreement. Nothing in this Agreement shall relieve the Contractor from its
responsibility to pay any tax including any tax that may be levied in India on
profits made by it in respect of this Agreement.

The Contract Price shall not be adjusted for any change in costs stated in
Clause 19.1.2 above, except as stated in Clauses 19.10 and 19.17.

The Contract Price shall not be adjusted to take account of any unforeseen
difficulties or costs, unless otherwise provided for in this Agreement.

Unless otherwise stated in this Agreement, the Contract Price covers all the
Contractor‟s obligations for the Works under this Agreement and all things
necessary for the Construction and the remedying of any Defects in the
Project Highway.

All payments under this Agreement shall be made in Indian Rupees.

Advance Payment
$
The Authority shall make an interest-bearing (@ Bank Rate ) advance payment
(the “Advance Payment”), equal in amount to 10 (ten) percent of
the Contract Price, exclusive for mobilisation expenses. The Advance
Payment for mobilisation expenses shall be made in two instalments each
equal to 5% (five percent) of the Contract Price. The second 5% (five
percent) mobilisation advance would be released after submission of

$
Bank Rate shall be as declared by Reserve Bank of India (RBI).

77
 utilization certificate by the Contractor for the first 5% advance already
released earlier.

In addition to above, the Authority shall make an additional interest-bearing

advance payment against newly purchased key construction equipment
required for the works as per agreed construction programme and brought to
the site, if so requested by the Contractor subject to the same terms and
conditions specified for Advance Payment for mobilisation expenses in this
Agreement. The maximum of such advance shall be 5% (five percent) of the
Contract Price against Bank Guarantee. This advance shall be further subject
to the condition that (i) such new equipment are considered by the
Authority‟s Engineer to be necessary for the works and (ii) these new
equipment should be procured in the name of Contractor and is verified by
Authority‟s Engineer to have been brought to site.

The Advance Payment for mobilization expenses and for acquisition of key
new construction equipment would be deemed as interest bearing advance at
Bank Rate, to be compounded annually. The interest would be recovered
along with the recovery of mobilization Advance Payment in equal
installments as per provision laid down for the mobilization advance
recovery..

The Contractor may apply to the Authority for the first instalment of the
Advance Payment at any time after the Appointed Date, along with an
irrevocable and unconditional guarantee from a Bank for an amount
equivalent to 110% (one hundred and ten per cent) of such instalment,
substantially in the form provided at Annex-III of Schedule-G, to remain
effective till the complete and full repayment thereof.

Deleted.

At any time, after 60 (sixty) days from the Appointed Date, the Contractor may
apply to the Authority for the second instalment of the Advance Payment
along with an irrevocable and unconditional guarantee from a Bank for an
amount equivalent to 110% (one hundred and ten per cent) of such
instalment, substantially in the form provided at Annex-III of Schedule-G, to
remain effective till the complete and full repayment thereof.
The Advance Payment shall be paid by the Authority to the Contractor within 15
(fifteen) days of the receipt of its respective requests in accordance with the
provisions of this Clause 19.2.

Deleted.

The advance payment shall be repaid through percentage deductions from the
stage payments determined by the Authority‟s Engineer in accordance with
Sub-Clause 19.5, as follows:

(a) deductions shall commence in the next Stage Payment Statement

following that in which the total of all certified stage payments
78
 (excluding the advance payment and deductions and repayments of
retention) exceeds 20% (twenty percent) of the Contract Price; and

deductions shall be made at the rate of 15% (fifteen percent) of each

Stage Payment Statement until such time as the advance payment has
been repaid; provided that the advance payment shall be completely
repaid prior to the time when 80% (80 percent) of the Contract Price has
been certified for payment.

If the Advance Payment has not been fully repaid prior to Termination under
Clause 21.7 or Article 23, as the case may be, the whole of the balance then
outstanding shall immediately become due and payable by the Contractor to
the Authority. Without prejudice to the provisions of Clause 19.2.7, in the
event of Termination for Contractor Default, the Advance Payment shall be
deemed to carry interest at the rate of 10% (ten per cent) per annum from the
date of Advance Payment to the date of recovery by encashment of the Bank
Guarantee for the Advance Payment. For the avoidance of doubt, the
aforesaid interest shall be payable on each instalment of the Advance
Payment, regardless of whether the instalment or any part thereof has been
repaid to the Authority prior to Termination.

Procedure for estimating the payment for the Works

The Authority shall make interim payments to the Contractor as certified by the
Authority‟s Engineer on completion of a stage, in a length, number or area
as specified, and valued in accordance with the proportion of the Contract
Price assigned to each item and its stage in Schedule-H.

The Contractor shall base its claim for interim payment for the stages completed
till the end of the month for which the payment is claimed, valued in
accordance with Clause 19.3.1, supported with necessary particulars and
documents in accordance with this Agreement.

Any reduction in the Contract Price arising out of Change of Scope or the works
withdrawn under Clause 8.3 shall not affect the amounts payable for the
items or stage payments thereof which are not affected by such Change of
Scope or withdrawal. For avoidance of doubt and by way of illustration, the
Parties agree that if the amount assigned to Major Bridges is reduced from
Rs. 100 crore to Rs. 80 crore owing to Change of Scope or withdrawal of
work, the reduction in payment shall be restricted to relevant payments for
Major Bridges only and the payment due in respect of all other stage
payments under the item Major Bridges shall not be affected in any manner.
The Parties further agree that the adjustments arising out of the aforesaid
modifications shall be carried out in a manner that the impact of such
modifications is restricted to the said Change of Scope or withdrawal, as the
case may be, and does not alter the payments due for and in respect of items
or stage payments which do not form part of such Change of Scope or
withdrawal.

79
Stage Payment Statement for Works

The Contractor shall submit a statement (the “Stage Payment Statement”),

th
in 3 copies, by the 7 (seventh) day of the month to the Authority‟s
Engineer in the form set forth in Schedule-O, showing the amount calculated
in accordance with Clause 19.3 to which the Contractor considers himself
entitled for completed stage(s) of the Works. The Stage Payment Statement
shall be accompanied with the progress reports and any other supporting
documents. The Contractor shall not submit any claim for payment of
incomplete stages of work.

Stage Payment for Works

Within 10 (ten) days of receipt of the Stage Payment Statement from the
Contractor pursuant to Clause 19.4, the Authority‟s Engineer shall broadly
determine the amount due to the Contractor and recommend the release of 90
(ninety) percent of the amount so determined as part payment against the
Stage Payment Statement, pending issue of the Interim Payment Certificate
by the Authority‟s Engineer. Within 10 (ten) days of the receipt of
recommendation of the Authority‟s Engineer, the Authority shall make
electronic payment directly to the Contractor‟s bank account.

Within 15 (fifteen) days of the receipt of the Stage Payment Statement referred
to in Clause 19.4, the Authority‟s Engineer shall determine and shall deliver
to the Authority and the Contractor an IPC certifying the amount due and
payable to the Contractor, after adjusting the payments already released to
the Contractor against the said statement. For the avoidance of doubt, the
Parties agree that the IPC shall specify all the amounts that have been
deducted from the Stage Payment Statement and the reasons therefor.

In cases where there is a difference of opinion as to the value of any stage, the
Authority‟s Engineer‟s view shall prevail and interim payments shall be
made to the Contractor on this basis; provided that the foregoing shall be
without prejudice to the Contractor‟s right to raise a Dispute.
The Authority‟s Engineer may, for reasons to be recorded, withhold from
payment:
the estimated value of work or obligation that the Contractor has
failed to perform in accordance with this Agreement and the
Authority‟s Engineer had notified the Contractor; and

the estimated cost of rectification of work done being not in

accordance with this Agreement.

Payment by the Authority shall not be deemed to indicate the Authority's

acceptance, approval, consent or satisfaction with the work done.

80
Monthly Maintenance Statement of the Project Highway

The Contractor shall submit to the Authority‟s Engineer a monthly maintenance

statement (“Monthly Maintenance Statement”) in 3 (three) copies by the
th
7 (seventh) day of each month in the format set forth in Schedule-O for the
Maintenance of the Project Highway during the previous month.
th
The monthly lump sum amount payable for Maintenance shall be 1/12 (one-
twelfth) of the annual cost of Maintenance as specified in Clause 14.1.1.

Payment for Maintenance of the Project Highway

Within 15 (fifteen) days of receipt of the Monthly Maintenance Statement from

the Contractor pursuant to Clause 19.6, the Authority‟s Engineer shall verify
the Contractor‟s monthly maintenance statement and certify the amount to
be paid to the Contractor taking into account:

Compliance with the Maintenance Requirements; and

reduction for non-compliance with the Maintenance Requirement in

accordance with Clause 19.7.2.

The Authority‟s Engineer shall deliver to the Authority an IPC approving or

amending the monthly maintenance statement to reflect the amount due to
the Contractor in accordance with this Agreement.

Maintenance shall be measured in units of one kilometer each; provided,

however, that payment thereof shall be made in fixed monthly amounts in
accordance with this Agreement. If the Maintenance Requirements set forth
in Schedule-E are not met, reduction in payments shall be made in
accordance with the provisions of Schedule-M. The reductions for non-
compliance with the Maintenance Requirements shall be applied on the basis
of monthly inspections by the Authority‟s Engineer.

The deduction made on account of non-compliance with the Maintenance

Requirements shall not be subsequently considered for payment after the
compliance is achieved by repair or rectification.

The Authority shall pay to the Contractor every quarter any amount due under
any IPC under this Clause 19.7. The payment shall be made no later than 30
(thirty) days from the date of submission of the last IPC for the relevant
quarter.

81
 Payment of Damages

The Contractor may claim Damages due and payable to it in accordance with the
provisions of this Agreement.

The Authority‟s Engineer shall issue the IPC within 15 (fifteen) days of the
receipt of the claim under Clause 19.8.1, after making adjustments in
accordance with the provisions of this Agreement. The Authority shall pay to
the Contractor the amount due under any IPC within a period of 30 (thirty)
days from the date of the submission of the claim under this Clause 19.8. In
the event of the failure of the Authority to make payment to the Contractor
within the specified time, the Authority shall be liable to pay to the
Contractor interest thereon and the provisions of Clause 19.9 shall apply
mutatis mutandis thereto.

Time of payment and interest

The Authority shall pay to the Contractor any amount due under any payment
certificate issued by the Authority‟s Engineer in accordance with the
provisions of this Article 19, or in accordance with any other clause of this
Agreement as follows:

payment shall be made no later than 30 (thirty) days from the date of
submission of the Stage Payment Statement by the Contractor to the
Authority‟s Engineer for certification in accordance with the
provisions of Clause 19.4 for an IPC; provided that, in the event the
IPC is not issued by the Authority‟s Engineer within the aforesaid
period of 30 (thirty) days, the Authority shall pay the amount shown
in the Contractor‟s Stage Payment Statement and any discrepancy
therein shall be added to, or deducted from, the next payment
certificate issued to the Contractor; and

payment shall be made no later than 30 (thirty) days from the date of
submission of the Final Payment Certificate for Works along with the
discharge submitted to the Authority‟s Engineer in accordance with
the provisions of Clause 19.15 for certification.

In the event of the failure of the Authority to make payment to the Contractor
within the time period stated in this Clause 19.9, the Authority shall be liable
to pay to the Contractor interest at the Base Rate plus 2% (two percent),
calculated at quarterly rests, on all sums remaining unpaid from the date on
which the same should have been paid, calculated in accordance with the
provisions of Clause 19.9.1(a) and (b) and till the date of actual payment.

19.10. Price adjustment for the Works

19.10.1 The amounts payable to the Contractor for Works shall be adjusted in
accordance with the provisions of this Clause 19.10.

82
Subject to the provisions of Clause 19.10.3, the amounts payable to the
Contractor for Works, shall be adjusted in the IPC issued by the Authority‟s
Engineer for the increase or decrease in the index cost of inputs for the
Works, by the addition or subtraction of the amounts determined by the
formulae prescribed in Clause 19.10.4.

To the extent that full compensation for any increase or decrease in costs to the
Contractor is not covered by the provisions of this or other Clauses in this
Agreement, the costs and prices payable under this Agreement shall be
deemed to include the amounts required to cover the contingency of such
other increase or decrease of costs and prices.

The Contract Price shall be adjusted for increase or decrease in rates and price of
labour, cement, steel, Plant, machinery and spares, bitumen, fuel and
lubricants, and other material inputs in accordance with the principles,
procedures and formulae specified below:

Price adjustment shall be applied on completion of the specified stage

of the respective item of work in accordance with Schedule-H;

Adjustment for each item of work/stage shall be made separately.

The following expressions and meanings are assigned to the value of

the work done:

RW= Value of work done for the completion of a stage under the
following items of Schedule-H:
Road works; and
Other works

BR = Value of work done for the completion of a stage under the

items Major Bridges and Structures (Schedule-H)

Price adjustment for changes in cost shall be paid in accordance with

the following formulae:

VRW= 0.85 RW x [PL x (LI – LO)/LO + PA x (AI – AO)/AO

PF x (FI –FO)/FO + PB x (BI – BO)/BO + PM x (MI –
MO)/MO + PC x (CI – CO)/CO+ PS x (SI – SO)/SO]

VBR = 0.85 BR x [PL x (LI – LO)/LO + PA x (AI – AO)/AO

PF x (FI –FO)/FO + PM x (MI – MO)/MO+ PC x (CI –
CO)/CO + PS x (SI – SO)/SO ]

Where

VRW = Increase or decrease in the cost of road works/other works during the
83
 period under consideration due to changes in the rates for relevant
components as stated in sub-paragraph (e)

VBR = Increase or decrease in the cost of Major Bridges and Structures

during the period under consideration due to changes in the rates for
relevant components as stated in sub-paragraph (e)

PB, PC, PL, PM, and PS are the percentages of bitumen, cement, labour,
other materials, and steel/components (including strands and cables)
respectively for the relevant item as stated in sub-paragraph (e)

PA is the percentage of Plant, machinery and spares component for the

relevant item as stated in sub-paragraph (e).

PF is the percentage of fuel and lubricants for the relevant items as stated in
sub-paragraph (e).

AO = The wholesale price index as published by the Ministry of Commerce

& Industry, Government of India (hereinafter called “WPI”) for
construction machinery for the month of the Base Date.

AI = The WPI for construction machinery for the month three months prior
to the month to which the IPC relates.

BO = The official retail price of bitumen at the nearest refinery at [Panipat]

on the Base Date.

BI = The official retail price of bitumen at nearest refinery at [Panipat], on

the first day of the month three months prior to the month to which the
IPC relates.

CO = The WPI for grey cement for the month of the Base Date..

CI = The WPI for grey cement for the month three months prior to the month
to which the IPC relates.FO = The official retail price of high speed
diesel (HSD) oil at the existing consumer pumps of Indian Oil
Corporation (“IOC”) in the State of [Haryana] on the Base Date.

FI = The official retail price of HSD at the existing consumer pumps of IOC
in the State of [Haryana] on the first day of the month three months
prior to the month to which the IPC relates.

LO = The consumer price index for industrial workers for the [circle **** in
the State of Uttar Pradesh], published by Labour Bureau, Ministry of
Labour, Government of India, (hereinafter called “CPI”) for the month
of the Base Date.

84
 LI = The CPI for the month three months prior to the month to which the IPC
relates.

MO = The WPI for all commodities for the month of the Base Date.

MI = The WPI for all commodities for the month three months prior to the
month to which the IPC relates.

SO = The WPI for steel (re-bars) for the month of the Base Date.

SI = The WPI for steel (re-bars) for the month three months prior to the
month to which the IPC relates.

(e) The following percentages shall govern the price adjustment of the
Contract Price:
Item
Road Works
Earthwork, Bitumin Cement Culverts, Major
Component Granular ous Concrete Bridges
work, and work Pavement minor and
Other works bridges and Structures
other
structures
Labour [20%] [20%] [20%] [15%] [15%]
(PL)

Cement [5%] Nil [20%] [15%] [15%]

(PC)

Steel Nil Nil Nil [15%] [20%]

(PS)
Bitumen Nil [15%] Nil Nil Nil
(PB)

Fuel and [10%] [10%] [10%] [10%] [10%]

lubricants
(PF)

Other [50%] [40%] [35%] [30%] [25%]

Materials
(PM)

85
 Plant, [15%] [15%] [15%] [15%] [15%]
machinery
and spares.
(PA)

Total 100% 100% 100% 100% 100%

In case an IPC relates to a month which is within 3 (three) months from the Base
Date, no price adjustment shall be applicable.

Restrictions on price adjustment

Price adjustment shall be due and payable only in respect of the stages of
Works for which the Stage Payment Statement has been submitted by the
Contractor no later than 30 (thirty) days from the date of the applicable
Project Milestone or the Scheduled Completion Date, as the case may be,
including any Time Extension granted therefor in accordance with the
provisions of this Agreement. For the avoidance of doubt, in the event of
submission of any Stage Payment Statement after the period specified herein,
price adjustment shall be applicable until the date of the respective Project
Milestone or the Scheduled Completion Date, as the case may be.

Price adjustment for Maintenance of Project Highway

Lump sum payment for Maintenance shall be adjusted every quarter for
changes in rates and prices of various inputs in accordance with the formula
given below:
I O O
V = P X (W -W )/W
V =Increase or decrease in the quarterly lump sum payment

P = Quarterly lump sum payment due to the Contractor after adjusting any
reduction in payment for non compliance of the Maintenance
Requirements
O
W = The wholesale price index (all commodities) for the month of the Base
Date.
I
W = The wholesale price index (all commodities) for the first day of the
quarter under consideration for determining the price adjustment.

19.13 Final Payment Statement

19.13.1 Within 60 (sixty) days after receiving the Completion Certificate under
Clause 12.4, the Contractor shall submit to the Authority‟s Engineer for
consideration six copies of a Final Payment Statement (the “Final Payment
86
 Statement”) for Works, with supporting documents showing in detail, in the
form prescribed by the Authority‟s Engineer:

the summary of Contractor‟s Stage Payment claims for Works as

submitted in accordance with Clause 19.4;

the amounts received from the Authority against each claim; and

any further sums which the Contractor considers due to it from the
Authority.

If the Authority‟s Engineer disagrees with or cannot verify any part of the
Final Payment Statement, the Contractor shall submit such further
information as the Authority‟s Engineer may reasonably require. The
Authority‟s Engineer shall deliver to the Authority:

an IPC for those parts of the Final Payment Statement which are not
in dispute, along with a list of disputed items which shall then be
settled in accordance with the provisions of Article 26; or

a Final Payment Certificate in accordance with Clause 19.15 if there

are no disputed items.

19.13.2 If the Authority‟s Engineer does not prescribe the form referred to in Clause
19.13.1 within 15 (fifteen) of the date of issue of the Completion Certificate,
the Contractor shall submit the statement in such form as it deems fit.

Discharge

Upon submission of the Final Payment Statement for Works under Clause
19.13, the Contractor shall give to the Authority, with a copy to the
Authority‟s Engineer, a written discharge confirming that the total of the
Final Payment Statement represents full and final settlement of all monies
due to the Contractor in respect of this Agreement for all the Works arising
out of this Agreement, except for any monies due to either Party on account
of any Defect. Provided that such discharge shall become effective only after
the payment due has been made in accordance with the Final Payment
Certificate issued pursuant to Clause 19.15.

Final Payment Certificate

19.15.1 Within 30 (thirty) days after receipt of the Final Payment Statement for
Works under Clause 19.13, and the written discharge under Clause 19.14,
and there being no disputed items of claim, the Authority‟s Engineer shall
deliver to the Authority, with a copy to the Contractor, a final payment
certificate (the “Final Payment Certificate”) stating the amount which, in
the opinion of the Authority‟s Engineer, is finally due under this Agreement
or otherwise. For the avoidance of doubt, before issuing the Final Payment
Certificate, the Authority‟s Engineer shall ascertain from the Authority all
87
 amounts previously paid by the Authority and for all sums to which the
Authority is entitled, the balance, if any, due from the Authority to the
Contractor or from the Contractor to the Authority, as the case may be.

19.15.2 The Authority shall, in accordance with the provisions of Clause 19.9, pay
to the Contractor the amount which is stated as being finally due in the Final
Payment Certificate.

19.16 Final payment statement for Maintenance

19.16.1 Within 30 (thirty) days after completion of the Maintenance Period, the
Contractor shall submit to the Authority‟s Engineer six copies of the final
payment statement for Maintenance of the Project Highway, with supporting
documents showing the details set forth below in the form prescribed by the
Authority‟s Engineer :

the total amount claimed in accordance with the monthly statement

for Maintenance of Project Highway;

the amount paid in accordance with the Interim Payment Certificates;

and

any sums which the Contractor considers to be due to it, with

supporting documents.

19.16.2 The Authority‟s Engineer shall certify final payment within 30 (thirty) days
of the receipt of the final payment statement of Maintenance under Clause
19.16.1, segregating the items of amount payable from the items of amount
disallowed. The Authority shall make payment on the basis of the final
payment authorised by the Authority‟s Engineer within a period of 30
(thirty) days of the receipt of the Final Payment Statement from the
Authority‟s Engineer.

19.16.3 If the Authority‟s Engineer does not prescribe the form within 15 (fifteen)
days of the date of issue of the Completion Certificate, the Contractor shall
submit the statement in such form as it deems fit.

19.17 Change in law

If as a result of Change in Law, the Contractor suffers any additional costs in the
execution of the Works or in relation to the performance of its other
obligations under this Agreement, the Contractor shall, within 15 (fifteen)
days from the date it becomes reasonably aware of such addition in cost,
notify the Authority with a copy to the Authority‟s Engineer of such
additional cost due to Change in Law.

If as a result of Change in Law, the Contractor benefits from any reduction in

costs for the execution of this Agreement or in accordance with the
provisions of this Agreement, either Party shall, within 15 (fifteen) days
88
 from the date it becomes reasonably aware of such reduction in cost, notify
the other Party with a copy to the Authority‟s Engineer of such reduction in
cost due to Change in Law.

19.17.3 The Authority‟s Engineer shall, within 15 (fifteen) days from the date of
receipt of the notice from the Contractor or the Authority, determine any
addition or reduction to the Contract Price, as the case may be, due to the
Change in Law.

Correction of Interim Payment Certificates

The Authority‟s Engineer may by an Interim Payment Certificate make any

correction or modification in any previous Interim Payment Certificate
issued by the Authority‟s Engineer.

Authority’s claims

If the Authority considers itself to be entitled to any payment from the

Contractor under any Clause of this Agreement, it shall give notice and
particulars to the Contractor 20 (twenty) days before making the recovery
from any amount due to the Contractor, and shall take into consideration the
representation, if any, made by the Contractor in this behalf, before making
such recovery.

Bonus for early completion

In the event that the Project Completion Date occurs prior to the Scheduled
Completion Date, the Contractor shall be entitled to receive a payment of
bonus equivalent to 0.03% (zero point zero three per cent) of the Contract
Price for each day by which the Project Completion Date precedes the
Scheduled Completion Date, but subject to a maximum of 5% (five per cent)
of the Contract Price. Provided, however, that the payment of bonus, if any,
shall be made only after the issue of the Completion Certificate. For the
avoidance of the doubt, the Parties agree that for the purpose of determining
the bonus payable hereunder, the Contract Price shall always be deemed to
be the amount specified in Clause 19.1.1, and shall exclude any revision
thereof for any reason. The Parties also agree that bonus shall be payable
only if each work for which Extension of Time has been granted is
completed within respective Extended Time.

89
 ARTICLE 20
INSURANCE

Insurance for Works and Maintenance

The Contractor shall effect and maintain at its own cost the insurances specified
in Schedule-P and as per the requirements under the Applicable Laws.

Subject to the provisions of Clause 21.6, the Authority and the Contractor shall,
in accordance with its obligations as provided for in this Agreement, be
liable to bear the cost of any loss or damage that does not fall within the
scope of this Article 20 or cannot be recovered from the insurers.

Subject to the exceptions specified in Clause 20.1.4 below, the Contractor shall,
save and except as provided for in this Agreement, fully indemnify, hold
harmless and defend the Authority from and against any and all losses,
damages, costs, charges and/or claims with respect to:

the death of or injury to any person; or

the loss of or damage to any property (other than the Works);

that may arise out of or in consequence of any breach by the Contractor of

this Agreement during the execution of the Works or the remedying of any
Defects therein.

Notwithstanding anything stated above in Clause 20.1.3, the Authority shall

fully indemnify the Contractor from and against any and all losses, damages,
costs, charges, proceedings and/or claims arising out of or with respect to

the use or occupation of land or any part thereof by the Authority;

the right of the Authority to execute the Works, or any part thereof,
on, over, under, in or through any land;

the damage to property which is the unavoidable result of the

execution and completion of the Works, or the remedying of any
Defects therein, in accordance with this Agreement; and

the death of or injury to persons or loss of or damage to property

resulting from any act or neglect of the Authority, its agents, servants
or other contractors, not being employed by the Contractor.

Provided that, in the event of any injury or damage as a result of the

contributory negligence of the Contractor, the Authority shall be liable to
indemnify the Contractor from and against any and all losses, damages,
costs, charges, proceedings and/or claims to the extent as may be
90
 proportionately determined to be the liability of the Authority, its servants or
agents or other contractors not associated with the Contractor in such injury
or damage.

Without prejudice to the obligations of the Parties as specified under Clauses

20.1.3 and 20.1.4, the Contractor shall maintain or effect such third party
insurances as may be required under the Applicable Laws.

The Contractor shall provide to the Authority, within 30 days of the Appointed
Date, evidence of professional liability insurance maintained by its Design
Director and/or consultants to cover the risk of professional negligence in the
design of Works. The professional liability coverage shall be for a sum of not
less than [3% (three per cent)] of the Contract Price and shall be maintained
until the end of the Defects Liability Period.

Notice to the Authority

No later than 15 (fifteen) days after the date of this Agreement, the Contractor
shall by notice furnish to the Authority, in reasonable detail, information in
respect of the insurances that it proposes to effect and maintain in accordance
with this Article 20. Within 15 (fifteen) days of receipt of such notice, the
Authority may require the Contractor to effect and maintain such other
insurances as may be necessary pursuant hereto, and in the event of any
difference or disagreement relating to any such insurance, the Dispute
Resolution Procedure shall apply.

Evidence of Insurance Cover

All insurances obtained by the Contractor in accordance with this Article 20

shall be maintained with insurers on terms consistent with Good Industry
Practice. Within 10 (ten) days from the Appointed Date, the Contractor shall
furnish to the Authority notarised true copies of the certificate(s) of
insurance, copies of insurance policies and premia payment receipts in
respect of such insurance, and no such insurance shall be cancelled,
modified, or allowed to expire or lapse until the expiration of at least 45
(forty-five) days after notice of such proposed cancellation, modification or
non-renewal has been delivered by the Contractor to the Authority. The
Contractor shall act in accordance with the directions of the Authority.
Provided that the Contractor shall produce to the Authority the insurance
policies in force and the receipts for payment of the current premia.

The Contractor shall ensure the adequacy of the insurances at all times in
accordance with the provisions of this Agreement.

Remedy for failure to insure

If the Contractor shall fail to effect and keep in force all insurances for which
it is responsible pursuant hereto, the Authority shall have the option to either
keep in force any such insurances, and pay such premia and recover the costs
91
 thereof from the Contractor, or in the event of computation of a Termination
Payment, treat an amount equal to the Insurance Cover as deemed to have
been received by the Contractor.

Waiver of subrogation

All insurance policies in respect of the insurance obtained by the Contractor

pursuant to this Article 20 shall include a waiver of any and all rights of
subrogation or recovery of the insurers thereunder against, inter alia, the
Authority, and its assigns, successors, undertakings and their subsidiaries,
Affiliates, employees, insurers and underwriters, and of any right of the
insurers to any set-off or counterclaim or any other deduction, whether by
attachment or otherwise, in respect of any liability of any such person
insured under any such policy or in any way connected with any loss,
liability or obligation covered by such policies of insurance.

Contractor’s waiver

The Contractor hereby further releases, assigns and waives any and all rights
of subrogation or recovery against, inter alia, the Authority and its assigns,
undertakings and their subsidiaries, Affiliates, employees, successors,
insurers and underwriters, which the Contractor may otherwise have or
acquire in or from or in any way connected with any loss, liability or
obligation covered by policies of insurance maintained or required to be
maintained by the Contractor pursuant to this Agreement (other than third
party liability insurance policies) or because of deductible clauses in or
inadequacy of limits of any such policies of insurance.

Cross liabilities

Any such insurance maintained or effected in pursuance of this Article 20

shall include a cross liability clause such that the insurance shall apply to the
Contractor and to the Authority as separately insured.

Accident or injury to workmen

Notwithstanding anything stated in this Agreement, it is hereby expressly

agreed between the Parties that the Authority shall not be liable for or in
respect of any damages or compensation payable to any workman or other
person in the employment of the Contractor or Sub-contractor, save and
except as for death or injury resulting from any act, omission or default of
the Authority, its agents or servants. The Contractor shall indemnify and
keep indemnified the Authority from and against all such claims,
proceedings, damages, costs, charges, and expenses whatsoever in respect of
the above save and except for those acts, omissions or defaults for which the
Authority shall be liable.

92
Insurance against accident to workmen

The Contractor shall effect and maintain during the Agreement such
insurances as may be required to insure the Contractor‟s personnel and any
other persons employed by it on the Project Highway from and against any
liability incurred in pursuance of this Article 20. Provided that for the
purposes of this Clause 20.9, the Contractor‟s personnel/any person
employed by the Contractor shall include the Sub-contractor and its
personnel. It is further provided that, in respect of any persons employed by
any Sub-contractor, the Contractor's obligations to insure as aforesaid under
this Clause 20.9 shall be discharged if the Sub-contractor shall have insured
against any liability in respect of such persons in such manner that the
Authority is indemnified under the policy. The Contractor shall require such
Sub-contractor to produce before the Authority, when required, such policy
of insurance and the receipt for payment of the current premium within 10
(ten) days of such demand being made by the Authority.

Application of insurance proceeds

The proceeds from all insurance claims, except for life and injury, shall be
applied for any necessary repair, reconstruction, reinstatement, replacement,
improvement, delivery or installation of the Project Highway and the
provisions of this Agreement in respect of construction of works shall apply
mutatis mutandis to the works undertaken out of the proceeds of insurance.

Compliance with policy conditions

Each Party hereby expressly agrees to fully indemnify the other Party from
and against all losses and claims arising from its failure to comply with
conditions imposed by the insurance policies effected in accordance with this
Agreement.

93
 Part V
Force Majeure and Termination

94
 ARTICLE 21
FORCE MAJEURE

Force Majeure
As used in this Agreement, the expression “Force Majeure” or “Force
Majeure Event” shall mean occurrence in India of any or all of Non-Political
Event, Indirect Political Event and Political Event, as defined in Clauses
21.2, 21.3 and 21.4 respectively, if it affects the performance by the Party
claiming the benefit of Force Majeure (the “Affected Party”) of its
obligations under this Agreement and which act or event (i) is beyond the
reasonable control of the Affected Party, and (ii) the Affected Party could
not have prevented or overcome by exercise of due diligence and following
Good Industry Practice, and (iii) has Material Adverse Effect on the Affected
Party.

Non-Political Event

A Non-Political Event shall mean one or more of the following acts or

events:

act of God, epidemic, extremely adverse weather conditions,

lightning, earthquake, landslide, cyclone, flood, volcanic eruption,
chemical or radioactive contamination or ionising radiation, fire or
explosion (to the extent of contamination or radiation or fire or
explosion originating from a source external to the Site);

strikes or boycotts (other than those involving the Contractor, Sub-

contractors or their respective employees/representatives, or
attributable to any act or omission of any of them) interrupting
supplies and services to the Project Highway for a continuous period
of 24 (twenty-four) hours and an aggregate period exceeding 10 (ten)
days in an Accounting Year, and not being an Indirect Political Event
set forth in Clause 21.3;

any failure or delay of a Sub-contractor but only to the extent caused

by another Non-Political Event;

any judgement or order of any court of competent jurisdiction or

statutory authority made against the Contractor in any proceedings
for reasons other than (i) failure of the Contractor to comply with any
Applicable Law or Applicable Permit, or (ii) on account of breach of
any Applicable Law or Applicable Permit or of any contract, or (iii)
enforcement of this Agreement, or (iv) exercise of any of its rights
under this Agreement by the Authority;

the discovery of geological conditions, toxic contamination or

archaeological remains on the Site that could not reasonably have
been expected to be discovered through a site inspection; or
95
 any event or circumstances of a nature analogous to any of the
foregoing.

Indirect Political Event

An Indirect Political Event shall mean one or more of the following acts or
events:

an act of war (whether declared or undeclared), invasion, armed

conflict or act of foreign enemy, blockade, embargo, riot,
insurrection, terrorist or military action, civil commotion or
politically motivated sabotage;

industry-wide or State-wide strikes or industrial action for a

continuous period of 24 (twenty-four) hours and exceeding an
aggregate period of 10 (ten) days in an Accounting Year;

any civil commotion, boycott or political agitation which prevents

construction of the Project Highway by the Contractor for an
aggregate period exceeding 10 (ten) days in an Accounting Year;

any failure or delay of a Sub-contractor to the extent caused by any

Indirect Political Event;

any Indirect Political Event that causes a Non-Political Event; or

any event or circumstances of a nature analogous to any of the

foregoing.

Political Event

A Political Event shall mean one or more of the following acts or events by
or on account of any Government Instrumentality:

Change in Law, only if consequences thereof cannot be dealt with

under and in accordance with the provisions of Clause 19.17;

compulsory acquisition in national interest or expropriation of any

Project Assets or rights of the Contractor or of the Sub-Contractors;

unlawful or unauthorised or without jurisdiction revocation of, or

refusal to renew or grant without valid cause, any clearance, licence,
permit, authorisation, no objection certificate, consent, approval or
exemption required by the Contractor or any of the Sub-contractors to
perform their respective obligations under this Agreement; provided
that such delay, modification, denial, refusal or revocation did not
result from the Contractor‟s or any Sub-contractor‟s inability or
failure to comply with any condition relating to grant, maintenance or
renewal of such clearance, licence, authorisation, no objection
certificate, exemption, consent, approval or permit;
96
 any failure or delay of a Sub-contractor but only to the extent caused
by another Political Event; or

any event or circumstances of a nature analogous to any of the

foregoing.

Duty to report Force Majeure Event

Upon occurrence of a Force Majeure Event, the Affected Party shall by notice
report such occurrence to the other Party forthwith. Any notice pursuant
hereto shall include full particulars of:

the nature and extent of each Force Majeure Event which is the
subject of any claim for relief under this Article 21 with evidence in
support thereof;

the estimated duration and the effect or probable effect which such
Force Majeure Event is having or will have on the Affected Party‟s
performance of its obligations under this Agreement;

the measures which the Affected Party is taking or proposes to take

for alleviating the impact of such Force Majeure Event; and

any other information relevant to the Affected Party‟s claim.

The Affected Party shall not be entitled to any relief for or in respect of a Force
Majeure Event unless it shall have notified the other Party of the occurrence
of the Force Majeure Event as soon as reasonably practicable, and in any
event no later than 10 (ten) days after the Affected Party knew, or ought
reasonably to have known, of its occurrence, and shall have given particulars
of the probable material effect that the Force Majeure Event is likely to have
on the performance of its obligations under this Agreement.

For so long as the Affected Party continues to claim to be materially affected by

such Force Majeure Event, it shall provide the other Party with regular (and
not less than weekly) reports containing information as required by Clause
21.5.1, and such other information as the other Party may reasonably request
the Affected Party to provide.

Effect of Force Majeure Event on the Agreement

Upon the occurrence of any Force Majeure after the Appointed Date, the costs
incurred and attributable to such event and directly relating to this
Agreement (the “Force Majeure costs”) shall be allocated and paid as
follows:

upon occurrence of a Non-Political Event, the Parties shall bear their

respective Force Majeure costs and neither Party shall be required to
pay to the other Party any costs thereof;

97
 upon occurrence of an Indirect Political Event, all Force Majeure
costs attributable to such Indirect Political Event, and not exceeding
the Insurance Cover for such Indirect Political Event, shall be borne
by the Contractor, and to the extent Force Majeure costs exceed such
Insurance Cover, one half of such excess amount shall be reimbursed
by the Authority to the Contractor for the Force Majeure events; and

upon occurrence of a Political Event, all Force Majeure costs

attributable to such Political Event shall be reimbursed by the
Authority to the Contractor.

For the avoidance of doubt, Force Majeure costs may include costs directly
attributable to the Force Majeure Event, but shall not include debt repayment
obligations, if any, of the Contractor.

Save and except as expressly provided in this Article 21, neither Party shall be
liable in any manner whatsoever to the other Party in respect of any loss,
damage, cost, expense, claims, demands and proceedings relating to or
arising out of occurrence or existence of any Force Majeure Event or
exercise of any right pursuant hereto.

Upon the occurrence of any Force Majeure Event during the Construction
Period, the Project Completion Schedule for and in respect of the affected
Works shall be extended on a day for day basis for such period as
performance of the Contractor‟s obligations is affected on account of the
Force Majeure Event or its subsisting effects.

Termination Notice for Force Majeure Event

If a Force Majeure Event subsists for a period of 60 (sixty) days or more within a
continuous period of 120 (one hundred and twenty) days, either Party may in
its discretion terminate this Agreement by issuing a Termination Notice to
the other Party without being liable in any manner whatsoever, save as
provided in this Article 21, and upon issue of such Termination Notice, this
Agreement shall, notwithstanding anything to the contrary contained herein,
stand terminated forthwith; provided that before issuing such Termination
Notice, the Party intending to issue the Termination Notice shall inform the
other Party of such intention and grant 15 (fifteen) days time to make a
representation, and may after the expiry of such 15 (fifteen) days period,
whether or not it is in receipt of such representation, in its sole discretion
issue the Termination Notice.

Termination Payment for Force Majeure Event

In the event of this Agreement being terminated on account of a Non-Political
Event, the Termination Payment shall be an amount equal to the sum payable
under Clause 23.5.
Provided that in the event Termination occurs during the Maintenance
Period, the Authority‟s Engineer shall only determine the value of Works
associated with Maintenance.
98
If Termination is on account of an Indirect Political Event, the Termination
Payment shall include:

any sums due and payable under Clause 23.5; and

the reasonable cost, as determined by the Authority‟s Engineer, of

the Plant and Materials procured by the Contractor and transferred to
the Authority for use in Construction or Maintenance, only if such
Plant and Materials are in conformity with the Specifications and
Standards;

Provided that in the event Termination occurs during the Maintenance

Period, the Authority‟s Engineer shall only determine the value of Works
associated with Maintenance.

If Termination is on account of a Political Event, the Authority shall make a

Termination Payment to the Contractor in an amount that would be payable
under Clause 23.6.2 as if it were an Authority Default.

Dispute resolution

In the event that the Parties are unable to agree in good faith about the
occurrence or existence of a Force Majeure Event, such Dispute shall be
finally settled in accordance with the Dispute Resolution Procedure;
provided that the burden of proof as to the occurrence or existence of such
Force Majeure Event shall be upon the Party claiming relief and/or excuse on
account of such Force Majeure Event.

Excuse from performance of obligations

If the Affected Party is rendered wholly or partially unable to perform its

obligations under this Agreement because of a Force Majeure Event, it shall
be excused from performance of such of its obligations to the extent it is
unable to perform on account of such Force Majeure Event; provided that:

the suspension of performance shall be of no greater scope and of no

longer duration than is reasonably required by the Force Majeure
Event;

the Affected Party shall make all reasonable efforts to mitigate or

limit damage to the other Party arising out of or as a result of the
existence or occurrence of such Force Majeure Event and to cure the
same with due diligence; and

when the Affected Party is able to resume performance of its

obligations under this Agreement, it shall give to the other Party
notice to that effect and shall promptly resume performance of its
obligations hereunder.

99
 ARTICLE 22
SUSPENSION OF CONTRACTOR’S RIGHTS

Suspension upon Contractor Default

Upon occurrence of a Contractor Default, the Authority shall be entitled,

without prejudice to its other rights and remedies under this Agreement
including its rights of Termination hereunder, to (i) suspend carrying out of
the Works or Maintenance or any part thereof, and (ii) carry out such Works
or Maintenance itself or authorise any other person to exercise or perform the
same on its behalf during such suspension (the “Suspension”). Suspension
hereunder shall be effective forthwith upon issue of notice by the Authority
to the Contractor and may extend up to a period not exceeding 90 (ninety)
days from the date of issue of such notice.

Authority to act on behalf of Contractor

During the period of Suspension hereunder, all rights and liabilities vested in
the Contractor in accordance with the provisions of this Agreement shall
continue to vest therein and all things done or actions taken, including
expenditure incurred by the Authority for discharging the obligations of the
Contractor under and in accordance with this Agreement shall be deemed to
have been done or taken for and on behalf of the Contractor and the
Contractor undertakes to indemnify the Authority for all costs incurred
during such period. The Contractor hereby licences and sub-licences
respectively, the Authority or any other person authorised by it under Clause
22.1 to use during Suspension, all Intellectual Property belonging to or
licenced to the Contractor with respect to the Project Highway and its design,
engineering, construction and maintenance, and which is used or created by
the Contractor in performing its obligations under the Agreement.

Revocation of Suspension

In the event that the Authority shall have rectified or removed the cause of
Suspension within a period not exceeding 60 (sixty) days from the date of
Suspension, it shall revoke the Suspension forthwith and restore all rights of
the Contractor under this Agreement. For the avoidance of doubt, the Parties
expressly agree that the Authority may, in its discretion, revoke the
Suspension at any time, whether or not the cause of Suspension has been
rectified or removed hereunder.

Upon the Contractor having cured the Contractor Default within a period not
exceeding 60 (sixty) days from the date of Suspension, the Authority shall
revoke the Suspension forthwith and restore all rights of the Contractor
under this Agreement.

100
Termination

At any time during the period of Suspension under this Article 22, the Contractor
may by notice require the Authority to revoke the Suspension and issue a
Termination Notice. The Authority shall, within 15 (fifteen) days of receipt
of such notice, terminate this Agreement under and in accordance with
Article 23.

Notwithstanding anything to the contrary contained in this Agreement, in the

event that Suspension is not revoked within 90 (ninety) days from the date of
Suspension hereunder, the Agreement shall, upon expiry of the aforesaid
period, be deemed to have been terminated by mutual agreement of the
Parties and all the provisions of this Agreement shall apply, mutatis
mutandis, to such Termination as if a Termination Notice had been issued by
the Authority upon occurrence of a Contractor Default.

101
 ARTICLE 23
TERMINATION

Termination for Contractor Default

Save as otherwise provided in this Agreement, in the event that any of the
defaults specified below shall have occurred, and the Contractor fails to cure
the default within the Cure Period set forth below, or where no Cure Period
is specified, then within a Cure Period of 60 (sixty) days, the Contractor shall
be deemed to be in default of this Agreement (the “Contractor Default”),
unless the default has occurred solely as a result of any breach of this
Agreement by the Authority or due to Force Majeure. The defaults referred
to herein shall include:

the Contractor fails to provide, extend or replenish, as the case may

be, the Performance Security in accordance with this Agreement;

subsequent to the replenishment or furnishing of fresh Performance

Security in accordance with Clause 7.3, the Contractor fails to cure,
within a Cure Period of 30 (thirty) days, the Contractor Default for
which the whole or part of the Performance Security was
appropriated;

the Contractor does not achieve the latest outstanding Project

Milestone due in accordance with the provisions of Schedule-J,
subject to any Time Extension, and continues to be in default for 45
(forty five) days;

the Contractor abandons or manifests intention to abandon the

construction or Maintenance of the Project Highway without the prior
written consent of the Authority;

the Contractor fails to proceed with the Works in accordance with the
provisions of Clause 10.1 or stops Works and/or the Maintenance for
30 (thirty) days without reflecting the same in the current programme
and such stoppage has not been authorised by the Authority‟s
Engineer;

the Project Completion Date does not occur within the period
specified in Schedule-J for the Scheduled Completion Date, or any
extension thereof;

failure to complete the Punch List items within the periods stipulated
therefor in Clause 12.2.1;

the Contractor fails to rectify any Defect, the non rectification of

which shall have a Material Adverse Effect on the Project, within the
time specified in this Agreement or as directed by the Authority‟s
102
 Engineer;

the Contractor subcontracts the Works or any part thereof in violation of

this Agreement or assigns any part of the Works or the Maintenance
without the prior approval of the Authority;

the Contractor creates any Encumbrance in breach of this Agreement;

an execution levied on any of the assets of the Contractor has caused a

Material Adverse Effect ;

the Contractor is adjudged bankrupt or insolvent, or if a trustee or

receiver is appointed for the Contractor or for the whole or material
part of its assets that has a material bearing on the Project;

the Contractor has been, or is in the process of being liquidated,

dissolved, wound-up, amalgamated or reconstituted in a manner that
would cause, in the reasonable opinion of the Authority, a Material
Adverse Effect;

a resolution for winding up of the Contractor is passed, or any petition

for winding up of the Contractor is admitted by a court of competent
jurisdiction and a provisional liquidator or receiver is appointed and
such order has not been set aside within 90 (ninety) days of the date
thereof or the Contractor is ordered to be wound up by court except
for the purpose of amalgamation or reconstruction; provided that, as
part of such amalgamation or reconstruction, the entire property,
assets and undertaking of the Contractor are transferred to the
amalgamated or reconstructed entity and that the amalgamated or
reconstructed entity has unconditionally assumed the obligations of
the Contractor under this Agreement; and provided that:

the amalgamated or reconstructed entity has the capability and

experience necessary for the performance of its obligations
under this Agreement; and

the amalgamated or reconstructed entity has the financial

standing to perform its obligations under this Agreement and
has a credit worthiness at least as good as that of the
Contractor as at the Appointed Date;

any representation or warranty of the Contractor herein contained which

is, as of the date hereof, found to be materially false or the Contractor
is at any time hereafter found to be in breach thereof;

the Contractor submits to the Authority any statement, notice or other

document, in written or electronic form, which has a material effect on
the Authority‟s rights, obligations or interests and which is false in
103
 material particulars;

the Contractor has failed to fulfil any obligation, for which failure
Termination has been specified in this Agreement; or

the Contractor commits a default in complying with any other

provision of this Agreement if such a default causes a Material
Adverse Effect on the Project or on the Authority.

Without prejudice to any other rights or remedies which the Authority may have
under this Agreement, upon occurrence of a Contractor Default, the
Authority shall be entitled to terminate this Agreement by issuing a
Termination Notice to the Contractor; provided that before issuing the
Termination Notice, the Authority shall by a notice inform the Contractor of
its intention to issue such Termination Notice and grant 15 (fifteen) days to
the Contractor to make a representation, and may after the expiry of such 15
(fifteen) days, whether or not it is in receipt of such representation, issue the
Termination Notice.

After termination of this Agreement for Contractor Default, the Authority may
complete the Works and/or arrange for any other entities to do so. The
Authority and these entities may then use any Materials, Plant and
equipment, Contractor‟s documents and other design documents made by or
on behalf of the Contractor.

Termination for Authority Default

In the event that any of the defaults specified below shall have occurred, and the
Authority fails to cure such default within a Cure Period of 90 (ninety) days
or such longer period as has been expressly provided in this Agreement, the
Authority shall be deemed to be in default of this Agreement (the
“Authority Default”) unless the default has occurred as a result of any
breach of this Agreement by the Contractor or due to Force Majeure. The
defaults referred to herein shall include:

the Authority commits a material default in complying with any of

the provisions of this Agreement and such default has a Material
Adverse Effect on the Contractor;

the Authority has failed to make payment of any amount due and
payable to the Contractor within the period specified in this
Agreement;

the Authority has failed to provide, within a period of 180 (one

hundred and eighty) days from the Appointed Date, the
environmental clearances required for construction of the Project
Highway;

the Authority repudiates this Agreement or otherwise takes any action

104
 that amounts to or manifests an irrevocable intention not to be bound
by this Agreement; or

the Authority‟s Engineer fails to issue the relevant Interim Payment

Certificate within 60 (sixty) days after receiving a statement and
supporting documents.

Without prejudice to any other right or remedy which the Contractor may have
under this Agreement, upon occurrence of an Authority Default, the
Contractor shall be entitled to terminate this Agreement by issuing a
Termination Notice to the Authority; provided that before issuing the
Termination Notice, the Contractor shall by a notice inform the Authority of
its intention to issue the Termination Notice and grant 15 (fifteen) days to the
Authority to make a representation, and may after the expiry of such 15
(fifteen) days, whether or not it is in receipt of such representation, issue the
Termination Notice.

If on the consideration of the Authority‟s representation or otherwise, the

th
contractor does not issue the Termination Notice on such 15 day and
prefers to continue with the project, it is deemed that the cause of action of
the Termination Notice has been condoned by the Contractor. Hence he
forfeits his right to any other remedy on that count.

Termination for Authority’s convenience

Notwithstanding anything stated hereinabove, the Authority may terminate

this Agreement for convenience. The termination shall take effect 30 (thirty)
days from the date of notice hereunder.

Requirements after Termination

Upon Termination of this Agreement in accordance with the terms of this

Article 23, the Contractor shall comply with and conform to the following:

deliver to the Authority all Plant and Materials which shall have
become the property of the Authority under this Article 23;

deliver all relevant records, reports, Intellectual Property and other

licences pertaining to the Works, Maintenance, other design
documents and in case of Termination occurring after the Provisional
Certificate has been issued, the “as built‟ Drawings for the Works;

transfer and/or deliver all Applicable Permits to the extent

permissible under Applicable Laws; and

vacate the Site within 15 (fifteen) days.

105
Valuation of Unpaid Works

Within a period of 45 (forty-five) days after Termination under Clause 23.1, 23.2
or 23.3, as the case may be, has taken effect, the Authority‟s Engineer shall
proceed in accordance with Clause 18.5 to determine as follows the valuation
of unpaid Works (the “Valuation of Unpaid Works”):

value of the completed stage of the Works, less payments already

made;

reasonable value of the partially completed stages of works as on the

date of Termination, only if such works conform with the
Specifications and Standards; and

value of Maintenance, if any, for completed months, less payments

already made,

and shall adjust from the sum thereof (i) any other amounts payable or
recoverable, as the case may be, in accordance with the provisions of this
Agreement; and (ii) all taxes due to be deducted at source.

The Valuation of Unpaid Works shall be communicated to the Authority, with a

copy to the Contractor, within a period of 30 (thirty) days from the date of
Termination.

Termination Payment

Upon Termination on account of Contractor‟s Default under Clause 23.1, the

Authority shall:
encash and appropriate the Performance Security and Retention
Money, or in the event the Contractor has failed to replenish or extend
the Performance Security, claim the amount stipulated in Clause 7.1.1,
as agreed pre-determined compensation to the Authority for any
losses, delays and cost of completing the Works and Maintenance, if
any;
encash and appropriate the bank guarantee, if any, for and in respect
of the outstanding Advance Payment and interest thereon; and
pay to the Contractor, by way of Termination Payment, an amount
equivalent to the Valuation of Unpaid Works after adjusting any other
sums payable or recoverable, as the case may be, in accordance with
the provisions of this Agreement.

106
Upon Termination on account of an Authority Default under Clause 23.2 or for
Authority‟s convenience under Clause 23.3, the Authority shall:

return the Performance Security and Retention Money forthwith;

encash and appropriate the bank guarantee, if any, for and in respect of
the outstanding Advance Payment; and

pay to the Contractor, by way of Termination Payment, an amount

equal to:

Valuation of Unpaid Works;

the reasonable cost, as determined by the Authority‟s

Engineer, of the Plant and Materials procured by the
Contractor and transferred to the Authority for its use, only if
such Plant and Materials are in conformity with the
Specifications and Standards;

the reasonable cost of temporary works, as determined by the

Authority‟s Engineer; and

10% (ten per cent) of the cost of the Works and Maintenance
that are not commenced or not completed,

and shall adjust from the sum thereof (i) any other amounts payable or
recoverable, as the case may be, in accordance with the provisions of this
Agreement, and (ii) all taxes due to be deducted at source.

Termination Payment shall become due and payable to the Contractor within 30
(thirty) days of a demand being made by the Contractor to the Authority with
the necessary particulars, and in the event of any delay, the Authority shall
pay interest at the Base Rate plus 2% (two percent), calculated at quarterly
rests, on the amount of Termination Payment remaining unpaid; provided
that such delay shall not exceed 90 (ninety) days. For the avoidance of doubt,
it is expressly agreed that Termination Payment shall constitute full
discharge by the Authority of its payment obligations in respect thereof
hereunder.

The Contractor expressly agrees that Termination Payment under this Article 23
shall constitute a full and final settlement of all claims of the Contractor on
account of Termination of this Agreement and that it shall not have any
further right or claim under any law, treaty, convention, contract or
otherwise.

107
Other rights and obligations of the Parties

Upon Termination for any reason whatsoever

property and ownership in all Materials, Plant and Works and the
Project Highway shall, as between the Contractor and the Authority,
vest in the Authority in whole; provided that the foregoing shall be
without prejudice to Clause 23.6

risk of loss or damage to any Materials, Plant or Works and the care
and custody thereof shall pass from the Contractor to the Authority;
and

the Authority shall be entitled to restrain the Contractor and any

person claiming through or under the Agreement from entering upon
the Site or any part of the Project except for taking possession of
materials, stores, implements, construction plants and equipment of
the Contractor, which have not been vested in the Authority in
accordance with the provisions of this Agreement.

Survival of rights

Notwithstanding anything to the contrary contained in this Agreement any

Termination pursuant to the provisions of this Agreement shall be without
prejudice to the accrued rights of either Party including its right to claim and
recover money damages, insurance proceeds, security deposits, and other
rights and remedies, which it may have in law or Agreement. All rights and
obligations of either Party under this Agreement, including Termination
Payments, shall survive the Termination to the extent such survival is
necessary for giving effect to such rights and obligations.

108
 Part VI
Other Provisions

109
 ARTICLE 24
ASSIGNMENT AND CHARGES

Restrictions on assignment and charges

This Agreement shall not be assigned by the Contractor to any person, save
and except with the prior consent in writing of the Authority, which consent
the Authority shall be entitled to decline without assigning any reason.

Hypothecation of Materials or Plant

Notwithstanding the provisions of Clause 24.1, the Contractor may pledge or

hypothecate to its lenders, any Materials or Plant prior to their incorporation
in the Works. Further, the Contractor may, by written notice to the Authority,
assign its right to receive payments under this Agreement either absolutely or
by way of charge, to any person providing financing to the Contractor in
connection with the performance of the Contractor‟s obligations under this
Agreement. The Contractor acknowledges that any such assignment by the
Contractor shall not relieve the Contractor from any obligations, duty or
responsibility under this Agreement.

110
 ARTICLE 25
LIABILITY AND INDEMNITY

General indemnity

The Contractor will indemnify, defend, save and hold harmless the Authority
and its officers, servants, agents, Government Instrumentalities and
Government owned and/or controlled entities/enterprises, (the “Authority
Indemnified Persons”) against any and all suits, proceedings, actions,
demands and third party claims for any loss, damage, cost and expense of
whatever kind and nature, whether arising out of any breach by the
Contractor of any of its obligations under this Agreement or from any
negligence under the Agreement, including any errors or deficiencies in the
design documents, or tort or on any other ground whatsoever, except to the
extent that any such suits, proceedings, actions, demands and claims have
arisen due to any negligent act or omission, or breach or default of this
Agreement on the part of the Authority Indemnified Persons.

Indemnity by the Contractor

Without limiting the generality of Clause 25.1, the Contractor shall fully
indemnify, hold harmless and defend the Authority and the Authority
Indemnified Persons from and against any and all loss and/or damages
arising out of or with respect to:

failure of the Contractor to comply with Applicable Laws and

Applicable Permits;

payment of taxes required to be made by the Contractor in respect of

the income or other taxes of the Sub-contractors, suppliers and
representatives; or

non-payment of amounts due as a result of Materials or services

furnished to the Contractor or any of its Sub-contractors which are
payable by the Contractor or any of its Sub-contractors.

Without limiting the generality of the provisions of this Article 25, the
Contractor shall fully indemnify, hold harmless and defend the Authority
Indemnified Persons from and against any and all suits, proceedings, actions,
claims, demands, liabilities and damages which the Authority Indemnified
Persons may hereafter suffer, or pay by reason of any demands, claims, suits
or proceedings arising out of claims of infringement of any domestic or
foreign patent rights, copyrights or other intellectual property, proprietary or
confidentiality rights with respect to any materials, information, design or
process used by the Contractor or by the Sub-contractors in performing the
Contractor‟s obligations or in any way incorporated in or related to the
Project. If in any such suit, action, claim or proceedings, a temporary
restraint order or preliminary injunction is granted, the Contractor shall make
every reasonable effort, by giving a satisfactory bond or otherwise, to secure
111
 the revocation or suspension of the injunction or restraint order. If, in any
such suit, action, claim or proceedings, the Project Highway, or any part
thereof or comprised therein, is held to constitute an infringement and its use
is permanently enjoined, the Contractor shall promptly make every
reasonable effort to secure for the Authority a licence, at no cost to the
Authority, authorising continued use of the infringing work. If the Contractor
is unable to secure such licence within a reasonable time, the Contractor
shall, at its own expense, and without impairing the Specifications and
Standards, either replace the affected work, or part, or process thereof with
non-infringing work or part or process, or modify the same so that it
becomes non-infringing.

Notice and contest of claims

In the event that either Party receives a claim or demand from a third party in
respect of which it is entitled to the benefit of an indemnity under this Article
25 (the “Indemnified Party”) it shall notify the other Party (the
“Indemnifying Party”) within 15 (fifteen) days of receipt of the claim or
demand and shall not settle or pay the claim without the prior approval of the
Indemnifying Party, which approval shall not be unreasonably withheld or
delayed. In the event that the Indemnifying Party wishes to contest or dispute
the claim or demand, it may conduct the proceedings in the name of the
Indemnified Party, subject to the Indemnified Party being secured against
any costs involved, to its reasonable satisfaction.

Defence of claims

The Indemnified Party shall have the right, but not the obligation, to contest, defend
and litigate any claim, action, suit or proceeding by any third party alleged or
asserted against such Party in respect of, resulting from, related to or arising out
of any matter for which it is entitled to be indemnified hereunder, and
reasonable costs and expenses thereof shall be indemnified by the Indemnifying
Party. If the Indemnifying Party acknowledges in writing its obligation to
indemnify the Indemnified Party in respect of loss to the full extent provided by
this Article 25, the Indemnifying Party shall be entitled, at its option, to assume
and control the defence of such claim, action, suit or proceeding, liabilities,
payments and obligations at its expense and through the counsel of its choice;
provided it gives prompt notice of its intention to do so to the Indemnified Party
and reimburses the Indemnified Party for the reasonable cost and expenses
incurred by the Indemnified Party prior to the assumption by the Indemnifying
Party of such defence. The Indemnifying Party shall not be entitled to settle or
compromise any claim, demand, action, suit or proceeding without the prior
written consent of the Indemnified Party, unless the Indemnifying Party
provides such security to the Indemnified Party as shall be reasonably required
by the Indemnified Party to secure the loss to be indemnified hereunder to the
extent so compromised or settled.

112
If the Indemnifying Party has exercised its rights under Clause 25.3, the
Indemnified Party shall not be entitled to settle or compromise any claim,
action, suit or proceeding without the prior written consent of the
Indemnifying Party (which consent shall not be unreasonably withheld or
delayed).

If the Indemnifying Party exercises its rights under Clause 25.3, the Indemnified
Party shall nevertheless have the right to employ its own counsel, and such
counsel may participate in such action, but the fees and expenses of such
counsel shall be at the expense of the Indemnified Party, when and as
incurred, unless:

the employment of counsel by such party has been authorised in

writing by the Indemnifying Party; or

the Indemnified Party shall have reasonably concluded that there may
be a conflict of interest between the Indemnifying Party and the
Indemnified Party in the conduct of the defence of such action; or

the Indemnifying Party shall not, in fact, have employed independent

counsel reasonably satisfactory to the Indemnified Party, to assume
the defence of such action and shall have been so notified by the
Indemnified Party; or

the Indemnified Party shall have reasonably concluded and

specifically notified the Indemnifying Party either:

that there may be specific defences available to it which are

different from or additional to those available to the
Indemnifying Party; or
that such claim, action, suit or proceeding involves or could
have a material adverse effect upon it beyond the scope of this
Agreement:
Provided that if Sub-clauses (b), (c) or (d) of this Clause 25.4.3 shall be
applicable, the counsel for the Indemnified Party shall have the right to direct
the defence of such claim, demand, action, suit or proceeding on behalf of
the Indemnified Party, and the reasonable fees and disbursements of such
counsel shall constitute legal or other expenses hereunder.

No consequential claims

Notwithstanding anything to the contrary contained in this Article 25, the

indemnities herein provided shall not include any claim or recovery in
respect of any cost, expense, loss or damage of an indirect, incidental or
consequential nature, including loss of profit, except as expressly provided in
this Agreement.

Survival on Termination
The provisions of this Article 25 shall survive Termination.
113
 ARTICLE 26
DISPUTE RESOLUTION

Dispute Resolution

Any dispute, difference or controversy of whatever nature howsoever arising

under or out of or in relation to this Agreement (including its interpretation)
between the Parties, and so notified in writing by either Party to the other
Party (the “Dispute”) shall, in the first instance, be attempted to be resolved
amicably in accordance with the conciliation procedure set forth in Clause
26.2.

The Parties agree to use their best efforts for resolving all Disputes arising under
or in respect of this Agreement promptly, equitably and in good faith, and
further agree to provide each other with reasonable access during normal
business hours to all non-privileged records, information and data pertaining
to any Dispute.

Conciliation

In the event of any Dispute between the Parties, either Party may call upon
the Authority‟s Engineer, or such other person as the Parties may mutually
agree upon (the “Conciliator”) to mediate and assist the Parties in arriving at
an amicable settlement thereof. Failing mediation by the Conciliator or
without the intervention of the Conciliator, either Party may require such
Dispute to be referred to the Chairman of the Authority and the Chairman of
the Board of Directors of the Contractor for amicable settlement, and upon
such reference, the said persons shall meet no later than 7 (seven) business
days from the date of reference to discuss and attempt to amicably resolve
the Dispute. If such meeting does not take place within the 7 (seven) business
day period or the Dispute is not amicably settled within 15 (fifteen) days of
the meeting or the Dispute is not resolved as evidenced by the signing of
written terms of settlement within 30 (thirty) days of the notice in writing
referred to in Clause 26.1.1 or such longer period as may be mutually agreed
by the Parties, either Party may refer the Dispute to arbitration in accordance
with the provisions of Clause 26.3.

Arbitration

Any Dispute which is not resolved amicably by conciliation, as provided in

Clause 26.2, shall be finally finally settled by arbitration in accordance with
the rules of arbitration of the SOCIETY FOR AFFORDABLE REDRESSAL
OF DISPUTES (SAROD).

Deleted.

The arbitrators shall make a reasoned award (the “Award”). Any Award
114
 made in any arbitration held pursuant to this Article 26 shall be final and
binding on the Parties as from the date it is made, and the Contractor and the
Authority agree and undertake to carry out such Award without delay.

The Contractor and the Authority agree that an Award may be enforced against
the Contractor and/or the Authority, as the case may be, and their respective
assets wherever situated.

This Agreement and the rights and obligations of the Parties shall remain in full
force and effect, pending the Award in any arbitration proceedings
hereunder.

In the event the Party against whom the Award has been granted challenges the
Award for any reason in a court of law, it shall make an interim payment to
the other Party for an amount equal to 75% (seventy five per cent) of the
Award, pending final settlement of the Dispute. The aforesaid amount shall
be paid forthwith upon furnishing an irrevocable Bank Guarantee for a sum
equal to 120 % (one hundred and twenty per cent) of the aforesaid amount.
Upon final settlement of the Dispute, the aforesaid interim payment shall be
adjusted and any balance amount due to be paid or returned, as the case may
be, shall be paid or returned with interest calculated at the rate of 10% (ten
per cent) per annum from the date of interim payment to the date of final
settlement of such balance.

Adjudication by Regulatory Authority, Tribunal or Commission

In the event of constitution of a statutory regulatory authority, tribunal or

commission, as the case may be, with powers to adjudicate upon disputes
between the Contractor and the Authority, all Disputes arising after such
constitution shall, instead of reference to arbitration under Clause 26.3, be
adjudicated upon by such regulatory authority, tribunal or commission in
accordance with the Applicable Law and all references to Dispute Resolution
Procedure shall be construed accordingly. For the avoidance of doubt, the
Parties hereto agree that the adjudication hereunder shall not be final and
binding until an appeal against such adjudication has been decided by an
appellate tribunal or court of competent jurisdiction, as the case may be, or
no such appeal has been preferred within the time specified in the Applicable
Law.

115
 ARTICLE 27
MISCELLANEOUS

Governing law and jurisdiction

This Agreement shall be construed and interpreted in accordance with and

governed by the laws of India, and the courts at [Delhi] shall have exclusive
jurisdiction over matters arising out of or relating to this Agreement.

Waiver of immunity

Each Party unconditionally and irrevocably:

agrees that the execution, delivery and performance by it of this

Agreement constitute commercial acts done and performed for
commercial purpose;

agrees that, should any proceedings be brought against it or its assets,

property or revenues in any jurisdiction in relation to this Agreement
or any transaction contemplated by this Agreement, no immunity
(whether by reason of sovereignty or otherwise) from such
proceedings shall be claimed by or on behalf of the Party with respect
to its assets;

waives any right of immunity which it or its assets, property or

revenues now has, may acquire in the future or which may be
attributed to it in any jurisdiction; and

consents generally in respect of the enforcement of any judgement or

award against it in any such proceedings to the giving of any relief or
the issue of any process in any jurisdiction in connection with such
proceedings (including the making, enforcement or execution against
it or in respect of any assets, property or revenues whatsoever
irrespective of their use or intended use of any order or judgement
that may be made or given in connection therewith).

Delayed payments

The Parties hereto agree that payments due from one Party to the other Party
under the provisions of this Agreement shall be made within the period set
forth therein, and if no such period is specified, within 30 (thirty) days of
receiving a demand along with the necessary particulars. In the event of
delay beyond such period, the defaulting Party shall pay interest for the
period of delay calculated at a rate equal to Base Rate plus 2 (two) percent,
calculated at quarterly rests, and recovery thereof shall be without prejudice
to the rights of the Parties under this Agreement including Termination
thereof.

116
Waiver

Waiver, including partial or conditional waiver, by either Party of any default by

the other Party in the observance and performance of any provision of or
obligations under this Agreement:-

shall not operate or be construed as a waiver of any other or

subsequent default hereof or of other provisions of or obligations
under this Agreement;

shall not be effective unless it is in writing and executed by a duly

authorised representative of the Party; and

shall not affect the validity or enforceability of this Agreement in any

manner.

Neither the failure by either Party to insist on any occasion upon the
performance of the terms, conditions and provisions of this Agreement or
any obligation thereunder nor time or other indulgence granted by a Party to
the other Party shall be treated or deemed as waiver of such breach or
acceptance of any variation or the relinquishment of any such right
hereunder.

Liability for review of Documents and Drawings

Except to the extent expressly provided in this Agreement:

no review, comment or approval by the Authority or the Authority‟s

Engineer of any Document or Drawing submitted by the Contractor
nor any observation or inspection of the construction, or maintenance
of the Project Highway nor the failure to review, approve, comment,
observe or inspect hereunder shall relieve or absolve the Contractor
from its obligations, duties and liabilities under this Agreement, the
Applicable Laws and Applicable Permits; and

the Authority shall not be liable to the Contractor by reason of any

review, comment, approval, observation or inspection referred to in
Sub-clause (a) above.

Exclusion of implied warranties etc.

This Agreement expressly excludes any warranty, condition or other

undertaking implied at law or by custom or otherwise arising out of any
other agreement between the Parties or any representation by either Party not
contained in a binding legal agreement executed by both Parties.

117
Survival

Termination shall:

not relieve the Contractor or the Authority, as the case may be, of any
obligations hereunder which expressly or by implication survive
Termination hereof; and

except as otherwise provided in any provision of this Agreement

expressly limiting the liability of either Party, not relieve either Party
of any obligations or liabilities for loss or damage to the other Party
arising out of, or caused by, acts or omissions of such Party prior to
the effectiveness of such Termination or arising out of such
Termination.

All obligations surviving Termination shall only survive for a period of 3 (three)
years following the date of such Termination.

Entire Agreement

This Agreement and the Schedules together constitute a complete and

exclusive statement of the terms of the agreement between the Parties on the
subject hereof, and no amendment or modification hereto shall be valid and
effective unless such modification or amendment is agreed to in writing by
the Parties and duly executed by persons especially empowered in this behalf
by the respective Parties. All prior written or oral understandings, offers or
other communications of every kind pertaining to this Agreement are
abrogated and withdrawn. For the avoidance of doubt, the Parties hereto
agree that any obligations of the Contractor arising from the Request for
Qualification or Request for Proposals, as the case may be, shall be deemed
to form part of this Agreement and treated as such.

Severability

If for any reason whatever, any provision of this Agreement is or becomes

invalid, illegal or unenforceable or is declared by any court of competent
jurisdiction or any other instrumentality to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remaining
provisions shall not be affected in any manner, and the Parties will negotiate
in good faith with a view to agreeing to one or more provisions which may
be substituted for such invalid, unenforceable or illegal provisions, as nearly
as is practicable to such invalid, illegal or unenforceable provision. Failure to
agree upon any such provisions shall not be subject to the Dispute Resolution
Procedure set forth under this Agreement or otherwise.

No partnership

This Agreement shall not be interpreted or construed to create an association,

joint venture or partnership between the Parties, or to impose any partnership
118
 obligation or liability upon either Party, and neither Party shall have any
right, power or authority to enter into any agreement or undertaking for, or
act on behalf of, or to act as or be an agent or representative of, or to
otherwise bind, the other Party.

Third parties

This Agreement is intended solely for the benefit of the Parties, and their
respective successors and permitted assigns, and nothing in this Agreement
shall be construed to create any duty to, standard of care with reference to, or
any liability to, any person not a Party to this Agreement.

Successors and assigns

This Agreement shall be binding upon, and inure to the benefit of the Parties
and their respective successors and permitted assigns.

Notices
Any notice or other communication to be given by any Party to the other
Party under or in connection with the matters contemplated by this
Agreement shall be in writing and shall:

in the case of the Contractor, be given by facsimile or e-mail and by

letter delivered by hand to the address given and marked for attention
of the person set out below or to such other person as the Contractor
may from time to time designate by notice to the Authority; provided
that notices or other communications to be given to an address
outside [Delhi] may, if they are subsequently confirmed by sending a
copy thereof by registered acknowledgement due, air mail or by
courier, be sent by facsimile or e-mail to the person as the Contractor
may from time to time designate by notice to the Authority;
[***]
in the case of the Authority, be given by facsimile or e-mail and by
letter delivered by hand and be addressed to the [Chairman] of the
Authority with a copy delivered to the Authority Representative or
such other person as the Authority may from time to time designate
by notice to the Contractor; provided that if the Contractor does not
have an office in [Delhi] it may send such notice by facsimile or e-
mail and by registered acknowledgement due, air mail or by courier;
and

any notice or communication by a Party to the other Party, given in

accordance herewith, shall be deemed to have been delivered when in
the normal course of post it ought to have been delivered and in all
other cases, it shall be deemed to have been delivered on the actual
date and time of delivery; provided that in the case of facsimile or e-
mail, it shall be deemed to have been delivered on the working day
following the date of its delivery.
119
Language

All notices required to be given by one Party to the other Party and all other
communications, Documentation and proceedings which are in any way
relevant to this Agreement shall be in writing and in English language.

Counterparts

This Agreement may be executed in two counterparts, each of which, when

executed and delivered, shall constitute an original of this Agreement.

Confidentiality

The Parties shall treat the details of this Agreement as private and
confidential, except to the extent necessary to carry out obligations under it
or to comply with Applicable Laws. The Contractor shall not publish, permit
to be published, or disclose any particulars of the Works in any trade or
technical paper or elsewhere without the previous agreement of the
Authority.

Copyright and Intellectual Property rights

As between the Parties, the Contractor shall retain the copyright and other
intellectual property rights in the Contractor's Documents and other design
documents made by (or on behalf of) the Contractor. The Contractor shall be
deemed (by signing this Agreement) to give to the Authority a non-
terminable transferable non-exclusive royalty-free licence to copy, use and
communicate the Contractor's Documents, including making and using
modifications of them. This licence shall:

apply throughout the actual or intended working life (whichever is

longer) of the relevant parts of the Works,
entitle any person in proper possession of the relevant part of the
Works to copy, use and communicate the Contractor's Documents for
the purposes of completing, operating, maintaining, altering,
adjusting, repairing and demolishing the Works, and
in the case of Contractor's Documents which are in the form of
computer programs and other software, permit their use on any
computer on the Site and other places as envisaged by this
Agreement, including replacements of any computers supplied by the
Contractor:
The Contractor's Documents and other design documents made by (or on behalf
of) the Contractor shall not, without the Contractor's consent, be used, copied
or communicated to a third party by (or on behalf of) the Authority for
purposes other than those permitted under this Clause 27.17.

As between the Parties, the Authority shall retain the copyright and other
intellectual property rights in this Agreement and other documents made by
120
 (or on behalf of) the Authority. The Contractor may, at its cost, copy, use,
and obtain communication of these documents for the purposes of this
Agreement. They shall not, without the Authority's consent, be copied, used
or communicated to a third party by the Contractor, except as necessary for
the purposes of the contract.

27.18 Limitation of Liability

Neither Party shall be liable to the other Party for loss of use of any Works, loss
of profit, loss of any contract or for any indirect or consequential loss or
damage which may be suffered by the other Party in connection with this
Agreement, save and except as provided under Articles 23 and 25.

The total liability of one Party to the other Party under and in accordance with
the provisions of this Agreement, save and except as provided in Articles 23
and 25, shall not exceed the Contract Price. For the avoidance of doubt, this
Clause shall not limit the liability in any case of fraud, deliberate default or
reckless misconduct by the defaulting Party.

121
 ARTICLE 28
DEFINITIONS

Definitions

In this Agreement, the following words and expressions shall, unless

repugnant to the context or meaning thereof, have the meaning hereinafter
respectively assigned to them:

“Accounting Year” means the financial year commencing from the first day
of April of any calendar year and ending on the thirty-first day of March of
the next calendar year;

“Advance Payment” shall have the meaning set forth in Clause 19.2;

“Affected Party” shall have the meaning set forth in Clause 21.1;

“Affiliate” means, in relation to either Party {and/or Members}, a person

who controls, is controlled by, or is under the common control with such
Party {or Member} (as used in this definition, the expression “control”
means, with respect to a person which is a company or corporation, the
ownership, directly or indirectly, of more than 50% (fifty per cent) of the
voting shares of such person, and with respect to a person which is not a
company or corporation, the power to direct the management and policies of
such person, whether by operation of law or by contract or otherwise);

“Agreement” means this Agreement, its Recitals, the Schedules hereto and
any amendments thereto made in accordance with the provisions contained
in this Agreement;

“Applicable Laws” means all laws, brought into force and effect by GOI or
the State Government including rules, regulations and notifications made
thereunder, and judgements, decrees, injunctions, writs and orders of any
court of record, applicable to this Agreement and the exercise, performance
and discharge of the respective rights and obligations of the Parties
hereunder, as may be in force and effect during the subsistence of this
Agreement;

“Applicable Permits” means all clearances, licences, permits,

authorisations, no objection certificates, consents, approvals and exemptions
required to be obtained or maintained under Applicable Laws in connection
with the construction, operation and maintenance of the Project Highway
during the subsistence of this Agreement;
th
“Appointed Date” means that date which is later of the 30 day of the date
of this Agreement, the date on which the Contractor has delivered the
Performance Security in accordance with the provisions of Article 7 and the
date on which the Authority has provided the working front on no less than
90% (Ninety per cent) of the total length of Project Highway;
122
“Arbitration Act” means the Arbitration and Conciliation Act, 1996 and
shall include modifications to or any re-enactment thereof, as in force from
time to time;

“Authority” shall have the meaning attributed thereto in the array of Parties
hereinabove as set forth in the Recitals;

“Authority Default” shall have the meaning set forth in Clause 23.2;

“Authority’s Engineer” shall have the meaning set forth in Clause 18.1;

“Authority Representative” means such person or persons as may be

authorised in writing by the Authority to act on its behalf under this
Agreement and shall include any person or persons having authority to
exercise any rights or perform and fulfil any obligations of the Authority
under this Agreement;

“Bank” means a bank incorporated in India and having a minimum net

worth of Rs. 1,000 crore (Rupees one thousand crore) or any other bank
acceptable to the Authority;

“Base Rate” means the floor rate of interest announced by the State Bank of
India for all its lending operations;

“Base Date” means the last date of that calender month, which date precedes
the Bid Due Date by at least 28 (twenty eight) days;

“Bid” means the documents in their entirety comprised in the bid submitted
by the [selected bidder/Consortium] in response to the Request for Proposals
in accordance with the provisions thereof;

“Bid Security” means the bid security provided by the Contractor to the
Authority in accordance with the Request for Proposal, and which is to
remain in force until substituted by the Performance Security;

“Change in Law” means the occurrence of any of the following after the
Base Date:

the enactment of any new Indian law;

the repeal, modification or re-enactment of any existing
Indian law;
the commencement of any Indian law which has not entered
into effect until the Base Date;
a change in the interpretation or application of any Indian law
by a judgement of a court of record which has become final,
conclusive and binding, as compared to such interpretation or
application by a court of record prior to the Base Date; or
123
 “Change of Scope” shall have the meaning set forth in Article 13;

“Change of Scope Notice” shall have the meaning set forth in Clause
13.2.1;

“Change of Scope Order” shall have the meaning set forth in Clause
13.2.4;

“Completion Certificate” shall have the meaning set forth in Clause 12.4;

{“Consortium” means the consortium of entities which have formed a joint

venture for implementation of this Project;}$
“Construction” shall have the meaning set forth in Clause 1.2.1 (f);

“Construction Period” means the period commencing from the Appointed

Date and ending on the date of the Completion Certificate;

“Contract Price” means the amount specified in Clause 19.1.1;

“Contractor” shall have the meaning attributed thereto in the array of

Parties hereinabove as set forth in the Recitals;

“Contractor Default” shall have the meaning set forth in Clause 23.1;

“Cure Period” means the period specified in this Agreement for curing any
breach or default of any provision of this Agreement by the Party responsible
for such breach or default and shall:

commence from the date on which a notice is delivered by

one Party to the other Party asking the latter to cure the breach
or default specified in such notice;

not relieve any Party from liability to pay Damages or

compensation under the provisions of this Agreement; and

not in any way be extended by any period of Suspension

under this Agreement; provided that if the cure of any breach
by the Contractor requires any reasonable action by the
Contractor that must be approved by the Authority or the
Authority‟s Engineer hereunder, the applicable Cure Period
shall be extended by the period taken by the Authority or the
Authority‟s Engineer to accord their approval;
$
This definition may be omitted if the Contractor is not a Consortium.

124
“Damages” shall have the meaning set forth in paragraph (w) of Clause
1.2.1;

“Defect” means any defect or deficiency in Construction of the Works or

any part thereof, which does not conform with the Specifications and
Standards, and in the case of Maintenance, means any defect or deficiency
which is specified in Schedule-E;

“Defects Liability Period” shall have the meaning set forth in Clause 17.1;

“Dispute” shall have the meaning set forth in Clause 26.1.1;

“Dispute Resolution Procedure” means the procedure for resolution of

Disputes set forth in Article 26;

“Drawings” means all of the drawings, calculations and documents

pertaining to the Project Highway as set forth in Schedule-I, and shall
include „as built‟ drawings of the Project Highway;

“Document” or “Documentation” means documentation in printed or

written form, or in tapes, discs, drawings, computer programmes, writings,
reports, photographs, films, cassettes, or expressed in any other written,
electronic, audio or visual form;

“Emergency” means a condition or situation that is likely to endanger the

safety or security of the individuals on or about the Project Highway,
including Users thereof, or which poses an immediate threat of material
damage to any of the Project Assets;

“Encumbrances” means, in relation to the Project Highway, any

encumbrances such as mortgage, charge, pledge, lien, hypothecation,
security interest, assignment, privilege or priority of any kind having the
effect of security or other such obligations, and shall include any designation
of loss payees or beneficiaries or any similar arrangement under any
insurance policy pertaining to the Project Highway, where applicable herein
but excluding utilities referred to in Clause 9.1;

“EPC” means engineering, procurement and construction;

“Final Payment Certificate” shall have the meaning set forth in Clause
19.15.1;

“Final Payment Statement” shall have the meaning set forth in Clause
19.13.1;

“Force Majeure” or “Force Majeure Event” shall have the meaning

ascribed to it in Clause 21.1;

“GAD” or “General Arrangement Drawings” shall have the meaning set

forth in Clause 4.1.3 (b);
125
“GOI” or “Government” means the Government of India;

“Good Industry Practice” means the practices, methods, techniques,

designs, standards, skills, diligence, efficiency, reliability and prudence
which are generally and reasonably expected from a reasonably skilled and
experienced contractor engaged in the same type of undertaking as envisaged
under this Agreement and which would be expected to result in the
performance of its obligations by the Contractor in accordance with this
Agreement, Applicable Laws and Applicable Permits in reliable, safe,
economical and efficient manner;

“Government Instrumentality” means any department, division or sub-

division of the Government or the State Government and includes any
commission, board, authority, agency or municipal and other local authority
or statutory body including panchayat under the control of the Government
or the State Government, as the case may be, and having jurisdiction over all
or any part of the Project Highway or the performance of all or any of the
services or obligations of the Contractor under or pursuant to this
Agreement;

“IRC” means the Indian Roads Congress;

“Indemnified Party” means the Party entitled to the benefit of an indemnity

pursuant to Article 25;

“Indemnifying Party” means the Party obligated to indemnify the other

Party pursuant to Article 25;

“Indirect Political Event” shall have the meaning set forth in Clause 21.3;

“Insurance Cover” means the aggregate of the maximum sums insured

under the insurances taken out by the Contractor pursuant to Article 20, and
includes all insurances required to be taken out by the Contractor under
Clauses 20.1 and 20.9 but not actually taken, and when used in the context of
any act or event, it shall mean the aggregate of the maximum sums insured
and payable or deemed to be insured and payable in relation to such act or
event;

“Intellectual Property” means all patents, trade marks, service marks,

logos, get-up, trade names, internet domain names, rights in designs, blue
prints, programmes and manuals, drawings, copyright (including rights in
computer software), database rights, semi-conductor, topography rights,
utility models, rights in know-how and other intellectual property rights, in
each case whether registered or unregistered and including applications for
registration, and all rights or forms of protection having equivalent or similar
effect anywhere in the world;

“Interim Payment Certificate” or “IPC” means the interim payment

certificate issued by the Authority‟s Engineer for payment to the Contractor
126
 in respect of Contractor‟s claims for payment raised in accordance with the
provisions of this Agreement;

{ “Lead Member” shall, in the case of a consortium, mean the member of

such consortium who shall have the authority to bind the contractor and each
member of the Consortium; and shall be deemed to be the Contractor for the
purposes of this Agreement; }$
“LOA” or “Letter of Acceptance” means the letter of acceptance referred
to in Recital (E);

“Maintenance” means the maintenance of the Project Highway as set forth

in Article 14 for the period specified therein;

“Maintenance Inspection Report” shall have the meaning set forth in

Clause 15.2.1;

“Maintenance Manual” shall have the meaning ascribed to it in Clause

10.7;

“Maintenance Programme” shall have the meaning set forth in Clause

14.3;

“Maintenance Period” shall have the meaning set forth in Clause 14.1.1;

“Maintenance Requirements” shall have the meaning set forth in Clause

14.2;

“Major Bridge” means a bridge having a total length of more than 60 (sixty)
metres between the inner faces of the dirt walls as specified in IRC:5-1998;

“Manual” shall mean the Manual of Standards and Specifications for Two
Laning of Highways (IRC:SP:73-2007);

“Material Adverse Effect” means a material adverse effect of any act or

event on the ability of either Party to perform any of its obligations under
and in accordance with the provisions of this Agreement and which act or
event causes a material financial burden or loss to either Party;

“Materials” are all the supplies used by the Contractor for incorporation in
the Works or for the maintenance of the Project Highway;

“Monthly Maintenance Statement shall have the meaning set forth in

Clause 19.6.1;

$ This definition may be omitted if the Contractor is not a Consortium.

127
“MORTH” means the Ministry of Road Transport and Highways or any
substitute thereof dealing with Highways;

“Non-Political Event” shall have the meaning set forth in Clause 21.2;

“Parties” means the parties to this Agreement collectively and “Party” shall
mean any of the parties to this Agreement individually;

“Performance Security” shall have the meaning set forth in Clause 7.1;

“Plant” means the apparatus and machinery intended to form or forming

part of the Works;

“Political Event” shall have the meaning set forth in Clause 21.4;

“Programme” shall have the meaning set forth in Clause 10.1.3;

“Project” means the construction and maintenance of the Project Highway

in accordance with the provisions of this Agreement, and includes all works,
services and equipment relating to or in respect of the Scope of the Project;

“Project Assets” means all physical and other assets relating to (a) tangible
assets such as civil works and equipment including foundations,
embankments, pavements, road surface, interchanges, bridges, culverts, road
over-bridges, drainage works, traffic signals, sign boards, kilometre-stones,
[toll plaza(s)], electrical systems, communication systems, rest areas, relief
centres, maintenance depots and administrative offices; and (b) Project
Facilities situated on the Site;

“Project Completion Date” means the date on which the Provisional

Certificate is issued and in the event no Provisional Certificate is issued, the
date on which the Completion Certificate is issued;

“Project Completion Schedule” means the progressive Project Milestones

set forth in Schedule-J for completion of the Project Highway on or before
the Scheduled Completion Date;

“Project Facilities” means all the amenities and facilities situated on the
Site, as described in Schedule-C;

“Project Highway” means the Site comprising the existing road {, proposed
bypasses and tunnels} forming part of [NH-** from km ** to km **] and all
Project Assets, and its subsequent development and augmentation in
accordance with this Agreement;

“Project Milestone” means the project milestone set forth in Schedule-J;

“Proof Consultant” shall have the meaning set forth in Clause 10.2.2;

128
“Provisional Certificate” shall have the meaning set forth in Clause 12.2;

“Punch List” shall have the meaning set forth in Clause 12.2.1;

“Quality Assurance Plan” or “QAP” shall have the meaning set forth in
Clause 11.2;

“Re.”, “Rs.” or “Rupees” or “Indian Rupees” means the lawful currency

of the Republic of India;

“Request for Proposals” or “RFP” shall have the meaning set forth in
Recital „D‟;

“Request for Qualification” or “RFQ” shall have the meaning set forth in
Recital „C‟;

“Retention Money” shall have the meaning set forth in Clause 7.5.1;

“Right of Way” means the constructive possession of the Site free from
encroachments and encumbrances, together with all way leaves, easements,
unrestricted access and other rights of way, howsoever described, necessary
for construction and maintenance of the Project Highway in accordance with
this Agreement;

“Safety Consultant” shall have the meaning set forth in Clause 10.1.5;

“Scheduled Completion Date” shall be the date set forth in Clause 10.3.1;

“Scope of the Project” shall have the meaning set forth in Clause 2.1;

“Section” means a part of the Project Highway;

“Site” shall have the meaning set forth in Clause 8.1;

“Specifications and Standards” means the specifications and standards

relating to the quality, quantity, capacity and other requirements for the
Project Highway, as set forth in Schedule-D, and any modifications thereof,
or additions thereto, as included in the design and engineering for the Project
Highway submitted by the Contractor to, and expressly approved by, the
Authority;

"Stage Payment Statement" shall have the meaning set forth in Clause
19.4;

“Structures” means an elevated road or a flyover, as the case may be;

“Sub-contractor” means any person or persons to whom a part of the

Works or the Maintenance has been subcontracted by the Contractor and the
129
permitted legal successors in title to such person, but not an assignee to such
person;

“Suspension” shall have the meaning set forth in Article 22;

“Taxes” means any Indian taxes including excise duties, customs duties,
value added tax, sales tax, local taxes, cess and any impost or surcharge of
like nature (whether Central, State or local) on the goods, Materials,
equipment and services incorporated in and forming part of the Project
Highway charged, levied or imposed by any Government Instrumentality,
but excluding any interest, penalties and other sums in relation thereto
imposed on any account whatsoever. For the avoidance of doubt, Taxes shall
not include taxes on corporate income;

“Termination” means the expiry or termination of this Agreement;

“Termination Notice” means the communication issued in accordance with

this Agreement by one Party to the other Party terminating this Agreement;

“Termination Payment” means the amount payable by either Party to the

other upon Termination in accordance with Article 23;

“Terms of Reference” or “TOR” shall have the meaning set forth in Clause
18.2.1;

“Tests” means the tests set forth in Schedule-K to determine the completion
of Works in accordance with the provisions of this Agreement;

“Time Extension” shall have the meaning set forth in Clause 10.5.1;

“User” means a person who travels or intends to travel on the Project

Highway or any part thereof in/on any vehicle;

“Valuation of Unpaid works” shall have the meaning set forth in Clause
23.5.1;

“Works” means all works including survey and investigation, design,

engineering, procurement, construction, Plant, Materials, maintenance,
temporary works and other things necessary to complete the Project
Highway in accordance with this Agreement; and

“WPI” means the wholesale price index for various commodities as

published by the Ministry of Commerce and Industry, GOI and shall include
any index which substitutes the WPI, and any reference to WPI shall, unless
the context otherwise requires, be construed as a reference to the WPI
published for the period ending with the preceding month.

130
IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED AND
DELIVERED THIS AGREEMENT AS OF THE DAY, MONTH AND YEAR
FIRST ABOVE WRITTEN.

SIGNED, SEALED AND SIGNED, SEALED AND

DELIVERED DELIVERED

For and on behalf of For and on behalf of

[THE NATIONAL HIGHWAYS THE CONTRACTOR by:

AUTHORITY OF INDIA ] by:

(Signature) (Signature)

(Name) (Name)

(Designation) (Designation)

In the presence of: 1.

2.

{COUNTERSIGNED and accepted by:

Name and particulars of other members of the Consortium}

131
Continued in volume-II (Schedule)