Draft concession agreement for sunken car park and commercial premises on DBOT basis
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Nairobi County (NCC) and developer
Developer to develop a mixed use integrated commercial and multi-level parking infrastructure in Nairobi on Design, Build, Finance, Operate and Transfer Concession Framework – includes commercial and office space as well as parking space – in accordance with applicable laws
Duration – 32.5 years (30 years operations period)
Parking charges require approval of NCC – initial charge set in contract, and recognition that can be increased by approx. 5% pa
Developer to obtain all permits but NCC will be facilitator for this (2.1.2)
Developer to pay NCC concession fee for commercial space and also a premium (as quoted by winning bidder)(3)
Contract specifies certain requirements for the car parks - but there is no specification on requirements for what the commercial or office premises should comprise
NCC to provide the project site free of encumbrances
Representations and warranties – there are most of the standard provisions but there are also some reps on the part of the developer which should in fact be covenants/ undertakings and be in a different section
Insurance provisions are relatively short – may also want to think about need to have NCC as co-insured?
Force Majeure – relatively standard FM events clause – private sector carries own costs in event of FM and so would need to look at insurance carefully
Termination – events that give rise to a termination event for default of developer are quite broad and could include relatively minor defaults as well as major defaults. In such case the project site and all construction is transferred to NCC with no compensation – this is might be a difficult provision to get finance against. It is not known whether this provision has been changed prior to signature. There is no provision on termination events in case of authority default or termination in event of force majeure.
Dispute resolution – relatively standard provision – conciliation and arbitration – arbitration local and under Arbitration Act 1995
Governing law – laws of Kenya
Boilerplate clauses - standard
There is no provision for change of scope or, as noted above, termination for NCC default or force majeure – otherwise there are quite a few standard provisions – similar to project documents developed in India
Related Information:
Tracking Reference:
Draft_Concession_Agreement_RFP_Multi-level_Car_Park_Nairobi_EN_2014
