This agreement is approved for signature but unsigned as for Sept 2016
Main Features: Public-private partnership for the design, financing, construction, operation, maintenance and transfer of 14,320 square meters of space, including an underground parking lot (353 parking spaces) and commercial space at ground level.
The project emerged from an unsolicited proposal, or private initiative as it is denominated in Spanish.
The project company must have a minimum equity of US$1,000,000.00 to sign the concession contract, and it has to be incorporated in Lima, Peru.
The parking lot shall be operated by an operator with accredited experience of at least 5 years on parking maintenance and exploitation, for the first three years of operation.
Term: The period of the contract is 32 years from the date of signing.
Investment Value: USD $13,479, 600.00, sale tax included.
Payments: The municipality will receive 8% of the gross income, before sales tax, from the parking operations and rental income from commercial space. The private party is free to set prices on both the parking and rental operations.
The private party shall obtain and establish the rights of way in order to fulfill the obligations of the contract. The contracting entity shall help the private partner with these arrangements, but this is not a result based obligation.
The private partner may mortgage the concession rights with previous authorization of the public entity, who cannot interpose when the creditor gathers all the conditions of permitted creditors. Likewise, the private partner may be able to grant security interest on the project’s future income cash flows. These guarantee obligations can only be granted to support the payment of obligations acquired for the purposes of the project.
The contract provides for rebalancing of economic and financial terms due to changes in law.
Insurance provisions: The private party shall acquire and maintain insurance policies that cover all the aspects of the project, such as: the project’s works, workers, contractors, subcontractors, and third parties.
Force Majeure: The contract could be suspended by request of any of the parties in cases of FM not imputable to the parties. There will be no penalties by breach of contractual obligations affected by FM while the contract remains suspended.
Termination: Other than the standard causes for termination of the contract such as: term expiration, agreement of the parties, and breach of contract, the contract can be terminated unilaterally for public interest reasons by written notice sent no less than 6 months previous to the foreseen date for the early termination.
Dispute Resolution: Conflict resolution will be done through direct dealings of the parties, and if unsuccessful, through arbitration in Lima, Peru, Lima Chamber of Commerce Rules.
Reviewed by: Angelica Toro; Sara Sigrist