Siglo XXI Project (Road Infrastructure Improvement), San Pedro Sula – Honduras

Region
Latin America and Caribbean
Country
Honduras
Keywords
Roads

 

Short summary in English:

This project is a concession for the design, construction, financing, managing, maintenance and transfer of the road infrastructure public works of San Pedro Sula. The parties to the contract are Coalianza (PPP unit) and Consorcio SPS Siglo XXI (private partner.) The value of the contract is around $80 million dollars. Within the two months of the contract signing, both parties shall create a trust, in order to guarantee an efficient usage of the funds. The financial closing must be within the next 90 days after approval of the engineer evaluations. The contract establishes a mechanism for rebalancing the economical-financial equilibrium when it has been affected due to changes of law. Penalties and early termination clauses are included in the contract. There is a legal stability clause in which the contract is reaffirmed to have applied, during its term, the taxes and legal obligations applicable at the moment of its signing. Applicable law: Honduran. Conflict Resolution: Direct agreement and arbitration.   

 

Short summary in Spanish:

Este Proyecto es una concesión para el diseño, construcción, financiamiento, administración, mantenimiento y transferencia de las obras públicas de infraestructura vial de San Pedro Sula. Las partes del contrato son: Coalianza (unidad de APP) y el Consorcio SPS Siglo XXI (parte privada). EL valor del contrato es alrededor de $80 millones de dólares estadounidenses. Dentro de los 2 meses siguientes a la firma del contrato, ambas partes deben crear un fideicomiso con el fin de garantizar un uso eficiente de los fondos. El cierre financiero debe ser dentro de los 90 días siguientes a la aprobación de las evaluaciones de ingeniería. El contrato establece un mecanismo para el restablecimiento del equilibrio económico y financiero cuando haya sido afectado por cambios en la ley.  El contrato incluye multas y cláusulas de terminación anticipada. También hay una cláusula de estabilidad legal en la cual se indica que el contrato se le aplicará, durante la duración de su término, los impuestos y las obligaciones legales existentes al momento de su celebración. Le ley aplicable es la ley Hondureña, y el arreglo directo y arbitramento son los mecanismos para la resolución de controversias.   

 

Main Features:  This project is a concession for the design, construction, financing, administration, maintenance and transfer of the road infrastructure public works of San Pedro Sula under the PPP modality (Clause II.)

 

Parties: Secretaria de Estado de Obras Públicas, Transporte y Vivienda –SOPTRAVI (Conceding Entity), Coalianza (PPP unit) and Consorcio SPS Siglo XXI (private partner) (Clause III.)

 

Term: The term of the concession is 15 years, which can be extended.

 

Value of the Contract: The value of the contract is $1,845,637,424.82 Lempiras, around $80 million dollars (Clause VII.)

 

Fideicomiso (Trust): Within the two months of the contract signing, both parties shall create a Fideicomiso (trust,) in order to guarantee aspects such as: an efficient tariff collection, usage of the funds, and payment to the private partner. The Fideicomiso shall be governed by the provisions established in the contract. In case of termination of the contract, the Fideicomiso shall be liquidated according to terms of the contract as well (Clause VIII.)

 

The financial closing must be within the next 90 days after approval of the engineer evaluations (Clause XII.)

 

Financial and economical balance of the contract: The contract establishes a mechanism for rebalancing the economical-financial equilibrium when it has been affected due to changes of law. The rebalancing may be call by any of the parties by presenting the justifications for it. This mechanism shall not be applicable when the changes are result or consequence of infractions or sanctions contemplated in the contract, or stem from acts imputable to the private partner’s performance (Clause XIII.)

 

The private partner shall pay Coalianza a service fee within the following 30 day to the contract signing. (Clause XIV.18)

 

The contract provides penalties automatically deductible from disbursements to the private partner. (Clause XV, Annex VI)

 

Early Termination Causes: Termination clauses are included in the contract such as: evident negligence of the private partner on the execution of the works; unjustified abandonment of the works for a month; economic insolvency; and breach of the contract, mutual agreement, and unilateral resolution by the conceding party (Clause XVI.)

 

Force Majeure: The contract establishes a non-exhaustive list of FM events, and in order to make to valid as an exemption clause it has notify it to the counter party and make any reasonable effort to mitigate its effects (Clause XVI.)

 

Juridical stability: The parties agreed that during the term of the contract, it will have juridical stability, considering application of taxes and legal obligations existing at the contract’s signing. (Clause XIX)

 

Insurance: The private partner shall have these policy coverages during the term of the contract: civil liability; construction all risk; maintenance goods; and labor risks (Clause XX.)

 

The contract provides an Integrity clause that calls for transparency and access to the public information, in order to prevent corruption practices (Clause XXVII.)

 

The private party shall assume all responsibility in case of damages to third parties as a consequence of the works or related activities, product of culpable or willful acts (Clause XXXIII.)

 

Conflict Resolution: Direct agreement and arbitration. The arbitration procedure will start with a Technical Arbitration where the arbiter will issue a binding opinion under their technical knowledge. The non-technical controversies shall be solved by a Legal Arbitration. The procedures for both are established in the contract (Clause XXII.e.)

 

Applicable Law: Honduran Law

 

Reviewed by: Angelica Toro

Last Updated : Sun,2016-11-27