Public Private Partnership

In
Highway Development

DRAFT CONCESSION AGREEMENT

for
Four-Laning of Pileru-Kalur (Tirupati Rural)
Section of NH-71. [Section-1] from Design Km
55+900/Existing Km 59.250 of NH-71 to Design
Km. 92+800/Existing Km 98.325 of NH-71 and
[Section-2] from Design Km 94+800/Existing Km.
274.231 of Old NH-205 to Design Km
95+717/Existing Km. 275.148 of Old NH-205 in the
State of Andhra Pradesh under Bharatmala
Pariyojana
Hybrid Annuity Project

Government of India

December- 2021
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

Contents
PART I
Concession Agreement
1 Definitions and Interpretation
1.1 Definitions

1.2 Interpretation

1.3 Measurements and arithmetic conventions

1.4 Priority of agreements, clauses and schedules

PART II
The Concession
2 Scope of the Project
2.1 Scope of the Project

3 Grant of Concession
3.1 The Concession

4 Conditions Precedent
4.1 Conditions Precedent

4.2 Damages for delay by the Authority

4.3 Damages for delay by the Concessionaire

4.4 Commencement of Concession Period

4.5 Deemed termination upon delay

5 Obligations of the Concessionaire

5.1 Obligations of the Concessionaire

5.2 Obligations relating to Project Agreements

5.3 Obligations relating to Change in Ownership

5.4 Obligations relating to employment of foreign nationals

5.5 Obligations relating to employment of trained personnel

5.6 Facilities for differently abled and elderly persons

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 2
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

5.7 Branding of Project

5.8 Sole purpose of the Concessionaire

5.9 Obligations relating to Local Content

6 Obligations of the Authority

6.1 Obligations of the Authority
6.2 Maintenance obligations prior to Appointed Date

6.3 Obligations relating to refinancing

7 Representations and Warranties

7.1 Representations and warranties of the Concessionaire

7.2 Representations and warranties of the Authority

7.3 Disclosure

8 Disclaimer
8.1 Disclaimer

PART III
Development and Operations
9 Performance Security
9.1 Performance Security
9.2 Appropriation of Performance Security

9.3 Release of Performance Security

9.4 Deleted

9.5 Deleted

9.6 Reference to Performance Security

9.7 Additional Performance Security

9.8 Appropriation and Release of Additional Performance

Security

10 Right of Way
10.1 The Site

10.2 Licences, Access and Right of Way

10.3 Procurement of the Site

10.4 Site to be free from Encumbrances

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 3
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

10.5 Protection of Site from Encumbrances

10.6 Special/temporary right of way

10.7 Access to the Authority and Independent Engineer

10.8 Geological and archaeological finds

10.9 Land for wayside amenities

11 Utilities, Associated Roads and Trees

11.1 Existing utilities and roads

11.2 Shifting of obstructing utilities

11.3 New utilities and roads

11.4 Felling of Trees

12 Construction of the Project

12.1 Obligations prior to commencement of construction
12.2 Drawings

12.3 Construction of the Project

12.4 Maintenance during Construction Period

12.5 Deleted

13 Monitoring of Construction
13.1 Monthly progress reports

13.2 Inspection
13.3 Tests

13.4 Delays during construction

13.5 Suspension of unsafe Construction Works

13.6 Video recording

14 Completion Certificate
14.1 Tests

14.2 Completion Certificate

14.3 Provisional Certificate

14.4 Completion of Punch List items

14.5 Withholding of Provisional or Completion Certificate

14.6 Rescheduling of Tests

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 4
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

15 Entry into Commercial Service

15.1 Commercial Operation Date (COD)
15.2 Damages for delay

16 Change of Scope
16.1 Change of Scope

16.2 Procedure for Change of Scope

16.3 Payment for Change of Scope

16.4 Restrictions on certain works

16.5 Power of the Authority to undertake works

16.6 Reduction in Scope of the Project

16.7 Effect of Change in Scope on the O&M Costs.

17 Operation and Maintenance

17.1 O&M obligations of the Concessionaire

17.2 Maintenance Requirements

17.3 Maintenance Manual

17.4 Maintenance Program

17.5 Safety, breakdowns and accidents

17.6 De-commissioning due to Emergency

17.7 Project closure

17.8 Damages for breach of maintenance obligations

17.9 Authority’s right to take remedial measures

17.10 Overriding powers of the Authority

17.11 Restoration of loss or damage to Project

17.12 Modifications to the Project

17.13 Excuse from performance of obligations

17.14 Deleted

17.15 Installation and operation of CCTV

17.16 Advertising on the site

18 Safety Requirements
18.1 Safety Requirements

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 5
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

18.2 Expenditure on Safety Requirements

19 Monitoring of Operation and Maintenance

19.1 Monthly status reports

19.2 Inspection

19.3 Tests

19.4 Remedial measures

19.5 Reports of unusual occurrence

20 Regulation and Management

20.1 Traffic regulation by the Concessionaire

20.2 Police assistance

20.3 Buildings for Traffic Aid Posts

20.4 Medical Aid Posts

20.5 Buildings for Medical Aid Posts

20.6 Computer systems and network

20.7 Recurring expenditure on Police assistance

20.8 Recurring expenditure on Medical Aid Post

21 Independent Engineer

21.1 Appointment of Independent Engineer

21.2 Duties and functions

21.3 Remuneration

21.4 Termination of appointment

21.5 Authorized signatories

21.6 Dispute resolution

21.7 Interim arrangement

PART IV
Financial Covenants
22 Financial Close

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 6
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

22.1 Financial Close

22.2 Termination due to failure to achieve Financial Close

23 Payment of Bid Project Cost

23.1 Bid Project Cost

23.2 Adjust Bid Project Cost

23.3 Payment of Bid Project Cost

23.4 Payment during Construction Period

23.5 Bonus on early completion

23.6 Annuity Payments during Operation Period

23.7 O&M Payments

23.8 Mobilization advance

23.9 Treatment of incomplete works

24 Article 24
Deleted

25 Escrow Account
25.1 Escrow Account

25.2 Deposits into Escrow Account

25.3 Withdrawals during Concession Period

25.4 Withdrawals upon Termination

26 Insurance
26.1 Insurance during Concession Period

26.2 Insurance Cover

26.3 Notices to the Authority

26.4 Evidence of insurance Cover

26.5 Remedy for failure to insure

26.6 Waiver for subrogation

26.7 Concessionaire’s waiver

26.8 Application of insurance proceeds

26.9 Compliance with conditions of insurance policies

27 Account And Audit

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 7
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

27.1 Audited Accounts

27.2 Appointment of Auditors

27.3 Certification of claims by Statutory Auditors

27.4 Set-off

27.5 Dispute resolution

Part-V
Force Majeure and Termination
28 Force Majeure
28.1 Force Majeure
28.2 Non-Political Event

28.3 Indirect Political Event

28.4 Political Event

28.5 Duty to report Force Majeure Event

28.6 Effect of Force Majeure Event on the Concession

28.7 Allocation of costs arising out of Force Majeure

28.8 Termination Notice for Force Majeure Event

28.9 Termination Payment for Force Majeure Event

28.10 Dispute resolution

28.11 Excuse from performance of obligations

28.12 Deleted

29 Compensation for Breach of Agreement

29.1 Compensation for default by the Concessionaire
29.2 Compensation for default by the Authority

29.3 Deleted

29.4 Mitigation of costs and damage

30 Suspension Of Concessionaire’s Rights

30.1 Suspension upon Concessionaire Default

30.2 Authority to act on behalf of Concessionaire

30.3 Revocation of Suspension

30.4 Substitution of Concessionaire

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 8
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

30.5 Termination

31 Termination
31.1 Termination for Concessionaire Default

31.2 Termination for Authority Default

31.3 Termination Payment

31.4 Certain limitations on Termination Payment

31.5 Other rights and obligations of the Authority

31.6 Survival of rights

32 Divestment of Rights And Interest

32.1 Divestment Requirements

32.2 Inspection and cure

32.3 Cooperation and assistance on transfer of Project

32.4 Vesting Certificate

32.5 Divestment costs etc.

33 Defects Liability after Termination

33.1 Liability for defects after Termination

33.2 Retention in Escrow Account

Part VI
Other Provisions
34 Assignment and Charges
34.1 Restrictions on assignment and charges

34.2 Permitted assignment and charges

34.3 Substitution Agreement

34.4 Assignment by the Authority

35 Change In Law
35.1 Increase in Costs
35.2 Reduction in costs

35.3 Protection of NPV

35.4 Restriction on cash compensation

35.5 Deleted

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 9
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

36 Liability And Indemnity

36.1 General indemnity
36.2 Indemnity by the Concessionaire

36.3 Notice and contest of claims

36.4 Defense of claims

36.5 No Consequential claims

36.6 Survival on Termination

37 Rights and Title over The Site

37.1 Licensee rights

37.2 Access rights of the Authority and others

37.3 Property taxes

37.4 Restriction on sub-letting

38 Dispute Resolution
38.1 Dispute resolution
38.2 Conciliation

38.3 Arbitration

38.4 Adjudication by Regulatory Authority, Tribunal or

Commission

39 Disclosure
39.1 Disclosure of Specified Documents

39.2 Disclosure of Documents relating to Safety

39.3 Withholding of Disclousure of Protected Documents

40 Redressal Of Public Grievances

40.1 Complaints Register
40.2 Redressal of Complaints

41 Miscellaneous
41.1 Governing law and jurisdiction
41.2 Waiver of immunity

41.3 Depreciation

41.4 Delayed payments

41.5 Waiver

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 10
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

41.6 Liability for review of Documents and Drawings

41.7 Exclusion of implied warranties etc.

41.8 Survival

41.9 Entire Agreement

41.10 Severability

41.11 No partnership

41.12 Third parties

41.13 Successors and assigns

41.14 Notices

41.15 Language

41.16 Counterparts

41.17 State Support Agreement

42 Definitions
42.1 Definitions

Schedules
A Site of the Project
1 The Site

Annex-I: Site for Project

B Development of the Project

1 Development of the Project

2 Four-Laning
Annex-I: Description of Project

C Project Facilities
1 Project Facilities

Annex-I: Project Facilities

D Specifications and Standards

1 Specifications and Standards for the Project

Annex-I: Specifications and Standards for the project

E Applicable Permits

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 11
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

1 Applicable Permits

F Performance Security

G Project Completion Schedule

1 Project Completion Schedule

2 Project Milestone-I

3 Project Milestone-II

4 Project Milestone-III

5 Scheduled Completion Date

6 Extension of Period

H Drawings
1 Drawings

2 Additional drawings
Annex-I: List of Drawings

I Tests
1 Schedule for Tests

2 Tests

3 Agency for conducting Tests

4 Completion/Provisional Certificate

5 Tests during construction

J Completion Certificate
1 Completion Certificate

2 Provisional Certificate

K Maintenance Requirements
1 Maintenance Requirements
2 Repair/rectification of defects and deficiencies

3 Other defects and deficiencies

4 Extension of time limit

5 Emergency repairs/restoration

6 Daily Inspection by the Concessionaire

7 Divestment Requirements

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 12
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

8 Display of Schedule K

Annex-I: Repair/rectification of defects and deficiencies

L Safety Requirements
1 Guiding Principles

2 Obligations of the Concessionaire

3 Appointment of Safety Consultant

4 Safety measures during Development Period

5 Safety measures during Construction Period

6 Safety measures during Operation Period

7 Costs and expenses

M Selection of Independent Engineer

1 Selection of Independent Engineer

2 Terms of Reference
3 Fee and expenses

4 Selection every three year

5 Appointment of government entity as Independent Engineer

N Terms of Reference for Independent Engineer

1 Scope
2 Definitions and interpretation

3 Roll and functions of Independent Engineer

4 Development Period

5 Construction Period

6 Operation Period
7 Termination

8 Determination of costs and time

9 Assistance in Dispute resolution

10 Other duties and functions

11 Miscellaneous

O Escrow Agreement

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 13
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

1 Definitions and Interpretation

2 Escrow Account
3 Deposits Into Escrow Account

4 Withdrawals from Escrow Account

5 Obligations of the Escrow Bank

6 Escrow Default

7 Termination of Escrow Agreement

8 Supplementary Escrow Agreement

9 Indemnities

10 Disputes Resolution

11 Miscellaneous Provisions

P Panel of Chartered Accountants

1 Panel of Chartered Accountants

2 Invitation of empanelment
3 Evaluation and selection

4 Consultation with the Concessionaire

5 Mutually agreed panel

Q Vesting Certificate

R Substitution Agreement.
1 Definitions and interpretation

2 Assignment

3 Substitution of the Concessionaire

4 Project Agreements

5 Termination of Concession Agreement

6 Duration of the Agreement

7 Indemnity

8 Dispute Resolution

9 Miscellaneous Provisions

S Procedure for Dispute Resolution Board

1 Annexure to Schedule S

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 14
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

Disputes Resolution Board’s Rules and Procedures

BOARD MEMBER’S DECLARATION OF ACCEPTANCE
Schedule of expenses and fees payable to the Member (s) of Dispute
Resolution Board (DRB)

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 15
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

CONCESSION AGREEMENT
THIS AGREEMENT1 is entered into on this the……………………. day of, 20......
BETWEEN
1 THE NATIONAL HIGHWAYS AUTHORITY OF INDIA, established under the
National Highways Authority of India Act 1988, represented by its Chairman and having
its principal offices at G-5 & 6, Sector 10, Dwarka, New Delhi-110075 (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 Part
AND
2 …………………………….LIMITED, a company incorporated under the provisions of
the Companies Act, 2013 with CIN ___________and having its registered office at
………………,(hereinafter referred to as the “Concessionaire” which expression shall,
unless repugnant to the context or meaning thereof, include its successors and permitted
assigns and substitutes) of the Other Part.
WHEREAS:
(A) The Government of India had entrusted to the Authority the development,
maintenance and management of National Highway No. 71 including the section
of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design
Km 55+900/Existing Km 59.250 of NH-71 to Design Km. 92+800/Existing
Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km.
274.231 of Old NH-205 to Design Km 95+717/Existing Km. 275.148 of Old
NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana
(approx. 37.817 km). The Authority had resolved to augment the existing road
from Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from
Design Km 55+900/Existing Km 59.250 of NH-71 to Design Km.
92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km
94+800/Existing Km. 274.231 of Old NH-205 to Design Km
95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra
Pradesh under Bharatmala Pariyojanaby Four-Laning thereof (the “Project”)
on design, build, operate and transfer (the “Hybrid Annuity”) basis, which shall
be partly financed by the Concessionaire who shall recover its investment and
costs through payments to be made by the Authority, in accordance with the
terms and conditions to be set forth in a concession agreement to be entered into.

(B) The Authority had adopted a single stage two envelope bidding process and accordingly
invited proposals by its Request for Proposals dated *** (the “Request for Proposals” or
“RFP”) for qualification and short listing of bidders for construction, operation and
maintenance of the above referred Project on Hybrid Annuity basis.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 16
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

(C) The Authority had prescribed the technical and commercial terms and conditions in the
RFP, and invited bids comprising technical and financial bids from the bidders for
undertaking the Project.
(D) After evaluation of the bids received, the Authority had technically qualified certain
bidders including, interalia, the {the selected bidder/ consortium
comprising…………………,………………………………and (collectively the
“Consortium”) with………………………as its lead member (the “Lead Member”)}
and accepted the financial bid of the{selected bidder/ Consortium} and issued its Letter of
Award No. …………………………..dated………………………(hereinafter called the
“LOA”) to the {selected bidder/ Consortium requiring, inter alia, the execution of this
Concession Agreement within 45 (forty five) days of the date of issue thereof.
(E) {The selected bidder/ Consortium has since promoted and incorporated the
Concessionaire as a limited liability company under the Companies Act 2013, and} has
requested the Authority to accept the Concessionaire as the entity which shall undertake
and perform the obligations and exercise the rights of the {selected bidder/ Consortium
under the LOA,} including the obligation to enter into this Concession Agreement
pursuant to the LOA for undertaking the Project.
(F) {By its letter dated the Concessionaire has also joined in the said request of the selected
bidder/ Consortium to the Authority to accept it as the entity which shall undertake and
perform the obligations and exercise the rights of the selected bidder/ Consortium
including the obligation to enter into this Concession Agreement pursuant to the LOA.
The Concessionaire has further represented to the effect that it has been promoted by the
selected bidder/ Consortium for the purposes hereof and has delivered to the Authority a
legal opinion with respect to the authority of the Concessionaire to enter into this
Concession Agreement and the enforceability of the provisions thereof.}
(G) The Authority has {agreed to the said request of the selected bidder/ Consortium and the
Concessionaire, and has} accordingly agreed to enter into this Concession Agreement
with the Concessionaire for implementation of the Project on Hybrid Annuity basis,
subject to and on the terms and conditions set forth hereinafter.
NOW, THEREFORE, in consideration of the foregoing and the respective covenants and
agreements set forth in this Concession Agreement, the receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound hereby, the Parties agree as
follows:

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 17
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 Definitions
The words and expressions beginning with capital letters and defined in this Agreement
(including those in Article 42) 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.
1.2 Interpretation
1.2.1 In this Agreement, unless the context otherwise requires,
(a) 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;
(b) 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;
(c) 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;
(d) 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;
(e) 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;
(f) references to “construction” or “building” include, unless the context otherwise
requires, investigation, design, engineering, procurement, delivery,
transportation, installation, processing, fabrication, testing, commissioning and
other activities incidental to the construction, and “construct” or “build” shall
be construed accordingly;
(g) references to “development” include, unless the context otherwise requires,
construction, renovation, refurbishing, augmentation, upgradation and other
activities incidental thereto, and “develop” shall be construed accordingly;
(h) any reference to any period of time shall mean a reference to that according to
Indian Standard Time;
(i) any reference to day shall mean a reference to a calendar day;

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(j) Reference to a “business day” shall be construed as reference to a day (other

than a Sunday) on which banks in the State are generally open for business;
(k) any reference to month shall mean a reference to a calendar month as per the
Gregorian calendar;
(l) 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;
(m) 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;
(n) the words importing singular shall include plural and vice versa;
(o) References to any gender shall include the other and the neutral gender;
(p) “lakh” means a hundred thousand (100,000) and “crore” means ten million
(10,000,000);
(q) “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;
(r) 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, reorganisation, dissolution, arrangement, protection or
relief of debtors;
(s) save and except as otherwise provided in this Agreement, any reference, at any
time, to any agreement, deed, instrument, license or document of any description
shall be construed as reference to that agreement, deed, instrument, license or
other document as amended, varied, supplemented, modified or suspended at the
time of such reference; provided that this Sub-clause (s) shall not operate so as to
increase liabilities or obligations of the Authority hereunder or pursuant hereto in
any manner whatsoever;
(t) any agreement, consent, approval, authorization, notice, communication,
information report or any other correspondence required under or pursuant to this
Agreement from or by any Party or the Independent Engineer shall be valid and
effective only if it is routed through NHAI Data Lake (unless the law requires to
send such notice, communication, etc., through physical/ any other specified
mode only) under the hand of a duly authorized representative of such Party or
the Independent Engineer, as the case may be, in this behalf and not otherwise;
(u) the Schedules and Recitals to this Agreement and the Request for Proposals
(“RFP”) forms 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;

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(v) references to Recitals, Articles, Clauses, Sub-clauses, Provisos or Schedules in

this Agreement shall, except where the context otherwise requires, mean
references to Recitals, Articles, Clauses, Sub-clauses, Provisos and Schedules of
or to this Agreement; reference to an Annex shall, subject to anything to the
contrary specified therein, be construed as a reference to an Annex to the
Schedule in which such reference occurs; and reference to a Paragraph shall,
subject to anything to the contrary specified therein, be construed as a reference
to a Paragraph of the Schedule or Annex, as the case may be, in which such
reference appears;
(w) 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
(x) Time shall be of the essence in the performance of the Parties’ respective
obligations. If any time period specified herein is extended, such extended time
shall also be of the essence.
1.2.2 Unless expressly provided otherwise in this Agreement, any Documentation required to
be provided or furnished by the Concessionaire to the Authority and/ or the Independent
Engineer shall be provided free of cost and in three copies, and if the Authority and/or the
Independent Engineer is required to return any such Documentation with their comments
and/or approval, they shall be entitled to retain two copies thereof.
1.2.3 The rule of construction, if any, that a contract should be interpreted against the parties
responsible for the drafting and preparation thereof, shall not apply.

1.2.4 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.
1.3 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.
1.4 Priority of agreements, clauses and schedules
1.4.1 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:
(a) this Agreement; and
(b) all other agreements and documents forming part hereof or referred to herein,
i.e. the Agreement at (a) above shall prevail over the agreements and documents at (b)
above.

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1.4.2 Subject to provisions of Clause 1.4.1, in case of ambiguities or discrepancies within this
Agreement, the following shall apply:
(a) 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;
(b) between the Clauses of this Agreement and the Schedules, the Clauses shall
prevail and between Schedules and Annexes, the Schedules shall prevail;
(c) between any two Schedules, the Schedule relevant to the issue shall prevail;
(d) between the written description on the Drawings and the Specifications and
Standards, the latter shall prevail;
(e) between the dimension scaled from the Drawing and its specific written
dimension, the latter shall prevail; and
(f) between any value written in numerals and that in words, the latter shall prevail.

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

Part II
The Concession

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ARTICLE 2
SCOPE OF THE PROJECT
2.1 Scope of the Project
The scope of the Project (the “Scope of the Project”) shall mean and include, during the
Concession Period:
(a) construction of the Project 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;
(b) operation and maintenance of-the Project in accordance with the provisions of
this Agreement; and
(c) performance and fulfillment of all other obligations of the Concessionaire 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
Concessionaire under this Agreement

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ARTICLE 3
GRANT OF CONCESSION
3.1 The Concession
3.1.1 Subject to and in accordance with the provisions of this Agreement, Applicable Laws and
Applicable Permits, the Authority hereby grants to the Concessionaire the concession set
forth herein including the exclusive right, license and authority to construct, operate and
maintain the Project (the “Concession”) during the Construction Period of 730(Seven
hundred and thirty) days and Operation Period of 15 (Fifteen) years commencing from
COD, and the Concessionaire hereby accepts the Concession and agrees to implement the
Project subject to and in accordance with the terms and conditions set forth herein.
3.1.2 Subject to and in accordance with the provisions of this Agreement, the Concession
hereby granted shall oblige or entitle (as the case may be) the Concessionaire to:
(a) Right of Way, access and license to the Site for the purpose of and to the extent
conferred by the provisions of this Agreement;
(b) finance and construct the Project;
(c) manage, operate and maintain the Project;
(d) perform and fulfill all of the Concessionaire’s obligations under and in accordance
with this Agreement;
(e) save as otherwise expressly provided in this Agreement, bear and pay all costs,
expenses and charges in connection with or incidental to the performance of the
obligations of the Concessionaire under this Agreement; and
(f) neither assign, transfer or sublet or create any lien or encumbrance on this
Agreement, or the Concession hereby granted or on the whole or any part of the
Project nor transfer, lease or part possession thereof, save and except as expressly
permitted by this Agreement or the Substitution Agreement.

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

ARTICLE 4
CONDITIONS PRECEDENT
4.1 Conditions Precedent
4.1.1 Save and except as expressly provided in Articles 4, 5, 6, 7, 8, 9, 10, 22, 28,38 and 41, or
unless the context otherwise requires, the respective rights and obligations of the Parties
under this Agreement shall be subject to the satisfaction in full of the conditions
precedent specified in this Clause 4.1 (the “Conditions Precedent”).
4.1.2 The Concessionaire may, upon providing the Performance Security to the Authority in
accordance with Article 9, at any time after 30 (thirty) days from the date of this
Agreement or on an earlier day acceptable to the Authority, by notice require the
Authority to satisfy all of the Conditions Precedent set forth in this Clause 4.1.2 within a
period of 120 (one hundred and twenty) days thereafter. The Conditions Precedent
required to be satisfied by the Authority shall be deemed to have been fulfilled when the
Authority shall have:
(a) procured for the Concessionaire the Right of Way to the Site in accordance with
the provisions of Clauses 10.3.1 and 10.3.2;
(b) procured all Applicable Permits relating to environmental protection, and
conservation in respect land forming part of the Right of Way under Clause
10.3.1 and 10.3.2;
(c) procured forest clearance for and in respect land forming part of the Right of Way
under Clause 10.3.1 and 10.3.2, save and except permission for cutting trees; and
(d) procured approval of the General Arrangement Drawings for the road over
bridges/under bridges at level crossings on the Project.
Provided that the Authority shall be entitled to an additional period, not exceeding
90(ninety) days beyond the period of 150 days without being liable for payment of any
damages, for fulfillment of the Conditions Precedent set forth in this Clause.
4.1.3 The Conditions Precedent required to be satisfied by the Concessionaire within a period
of 150(one hundred and fifty) days from the date of this Agreement shall be deemed to
have been fulfilled when the Concessionaire shall have:
(a) provided Performance Security to the Authority alongwith the Additional
Performance Security, if required in terms of Clause 9.1 and Clause 9.7 of this
Agreement. For the avoidance of doubt it is clarified and agreed that the
Concessionaire is required to provide the Performance Security and the
Additional Performance Security, if required, within 30 days of signing of this
Agreement;
(b) executed and procured execution of the Escrow Agreement;
(c) executed and procured execution of the Substitution Agreement;
(d) procured all the Applicable Permits specified in Part-I of Schedule-E
unconditionally or if subject to conditions, then all such conditions required to be
fulfilled by the date specified therein shall have been satisfied in full and such
Applicable Permits are in full force and effect;

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(e) executed the Financing Agreements and delivered to the Authority 3 (three) true
copies thereof, duly attested by a Director of the Concessionaire;
(f) delivered to the Authority 3 (three) true copies of the Financial Package and the
Financial Model, duly attested by a Director of the Concessionaire, along with 3
(three) soft copies of the Financial Model in MS Excel version or any substitute
thereof, which is acceptable to the Senior Lenders; and
(g) delivered to the Authority {from the Consortium Members, their respective}
confirmation of the correctness of the representations and warranties set forth in
Sub-clauses (k), (l) and (m) of Clause 7.1 of this Agreement.
4.1.4 Each Party shall make all reasonable endeavours to satisfy the Conditions Precedent
within the time stipulated and shall provide the other Party with such reasonable
cooperation as may be required to assist that Party in satisfying the Conditions Precedent
for which that Party is responsible. Subject only to payment of Damages, it is agreed
between the Parties that the obligation to fulfill each parties’ Conditions Precedent is an
independent obligation of the respective Party.
4.1.5 The Parties shall notify each other in writing at least once a month on the progress made
in satisfying the Conditions Precedent. Each Party shall promptly inform the other Party
when any Condition Precedent for which it is responsible has been satisfied.

4.2 Damages for delay by the Authority

In the event that (i) the Authority does not procure fulfillment of any or all of the
Conditions Precedent set forth in Clause 4.1.2 within the period specified in respect
thereof, and (ii) the delay has not occurred as a result of breach of this Agreement by the
Concessionaire or due to Force Majeure, the Authority shall pay to the Concessionaire
Damages in an amount calculated at the rate of 0.2% (zero point two per cent) of the
Performance Security for each day’s delay until the fulfillment of such Conditions
Precedent, subject to the maximum limit equal to the amount of 1% of the Estimated
Project Cost as mentioned in the RFP and upon reaching such limit, the Concessionaire
may, in its sole discretion terminate the Agreement. The Damages payable hereunder
shall be the sole remedy available to the Concessionaire for delay by the Authority.
Provided further that in the event of delay by the Concessionaire in procuring fulfillment
of the Conditions Precedent specified in Clause 4.1.3, no Damages shall be due or
payable by the Authority under this Clause 4.2 until the date on which the Concessionaire
shall have procured fulfillment of the Conditions Precedent specified in Clause 4.1.3.

4.3 Damages for delay by the Concessionaire

In the event that (i) the Concessionaire does not procure fulfillment of any or all of the
Conditions Precedent set forth in Clause 4.1.3 within the period specified in respect
thereof, and (ii) the delay has not occurred as a result of failure to fulfill the obligations
under Clause 4.1.2 or other breach of this Agreement by the Authority, or due to Force
Majeure, the Concessionaire shall pay to the Authority Damages in an amount calculated
at the rate of 0.3% (zero point three per cent) of the Performance Security for each day’s
delay until the fulfillment of such Conditions Precedent. Provided, however, that the
Damages payable hereunder shall be subject to the maximum limit equal to the amount
of 1% of the Estimated Project Cost as mentioned in the RFP and upon reaching such
limit, the Authority may, in its sole discretion and subject to the provisions of Clause 9.2,

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

terminate the Agreement. Provided further that in the event of delay by the Authority in
procuring fulfillment of the Conditions Precedent specified in Clause 4.1.2, no Damages
shall be due or payable by the Concessionaire under this Clause 4.3 until the date on
which the Authority shall have procured fulfillment of the Conditions Precedent specified
in Clause 4.1.2.

4.4 Commencement of Concession Period

The date on which Financial Close is achieved and all the Conditions Precedent specified
in Clause 4.1 are satisfied shall be the Appointed Date which shall be the date of
commencement of the Concession Period. For the avoidance of doubt, the Parties agree
that the Concessionaire may, upon occurrence of the Appointed Date hereunder, by notice
convey the particulars thereof to the Authority, and shall thereupon be entitled to
commence construction on the Project.

4.5 Deemed Termination upon delay

Without prejudice to the provisions of Clauses 4.2 and 4.3, and subject to the provisions
of Clause 9.2, the Parties expressly agree that in the event the Appointed Date does not
occur, for any reason whatsoever, before the 1st (first) anniversary of the date of this
Agreement or the extended period provided in accordance with this Agreement, all rights,
privileges, claims and entitlements of the Concessionaire under or arising out of this
Agreement shall be deemed to have been waived by, and to have ceased with the
concurrence of the Concessionaire, and the Concession Agreement shall be deemed to
have been terminated by mutual agreement of the Parties. Provided, however, that in the
event the non-occurrence of the Appointed Date is for reasons attributable to the
Concessionaire, the Performance Security and the Additional Performance Security, if
any, of the Concessionaire shall be encashed and appropriated by the Authority as
Damages thereof.

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ARTICLE 5
OBLIGATIONS OF THE CONCESSIONAIRE
5.1 Obligations of the Concessionaire
5.1.1 Subject to and on the terms and conditions of this Agreement, the Concessionaire shall, at
its own cost and expense, procure finance for and undertake the design, engineering,
procurement, construction, operation and maintenance of the Project and observe, fulfill,
comply with and perform all its obligations set out in this Agreement or arising
hereunder.
5.1.2 The Concessionaire shall comply with all Applicable Laws and Applicable Permits
(including renewals as required) in the performance of its obligations under this
Agreement.
5.1.3 Save and except as otherwise provided in this Agreement or Applicable Laws, as the case
may be, the Concessionaire shall, in discharge of all its obligations under this Agreement,
conform with and adhere to Good Industry Practice at all times.
5.1.4 The Concessionaire shall, at its own cost and expense, in addition to and not in derogation
of its obligations elsewhere set out in this Agreement:
(a) 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, other than those set forth in Clause 4.1.2, and
obtain and keep in force and effect such Applicable Permits in conformity with
Applicable Laws;
(b) procure, as required, the appropriate proprietary rights, licenses, agreements and
permissions for materials, methods, processes, know-how and systems used or
incorporated into the Project;
(c) perform and fulfill its obligations under the Financing Agreements;
(d) make reasonable efforts to maintain harmony and good industrial relations among
the personnel employed by it or its Contractors in connection with the
performance of its obligations under this Agreement;
(e) upon written request from the Authority, make reasonable efforts to facilitate the
acquisition of land and procuring of environmental and forest clearances required
for the purposes of the Agreement;
(f) ensure and procure that its Contractors comply with all Applicable Permits and
Applicable Laws in the performance by them of any of the Concessionaire’s
obligations under this Agreement;
(g) always act in a manner consistent with the provisions of this Agreement and not
cause or fail to do any act, deed or thing, whether intentionally or otherwise,
which may in any manner be violative of any of the provisions of this Agreement;
(h) support, cooperate with and facilitate the Authority in the implementation and
operation of the Project in accordance with the provisions of this Agreement; and

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(i) transfer the Project to the Authority upon Termination of this Agreement, in
accordance with the provisions of this Agreement.

5.2 Obligations relating to Project Agreements

5.2.1 It is expressly agreed that the Concessionaire shall, at all times, be responsible and liable
for all its obligations under this Agreement notwithstanding anything contained in the
Project Agreements or any other agreement, and no default under any Project Agreement
or agreement shall excuse the Concessionaire from its obligations or liability hereunder.
5.2.2 The Concessionaire shall submit to the Authority the drafts of all Project Agreements, or
any amendments or replacements thereto, for its review and comments, and the Authority
shall have the right but not the obligation to undertake such review and provide its
comments, if any, to the Concessionaire within 30 (thirty) days of the receipt of such
drafts. Within 7 (seven) days of execution of any Project Agreement or amendment
thereto, the Concessionaire shall submit to the Authority a true copy thereof, duly attested
by a Director of the Concessionaire, for its record. For the avoidance of doubt, it is agreed
that the review and comments hereunder shall be limited to ensuring compliance with the
terms of this Agreement. It is further agreed that any failure or omission of the Authority
to review and/ or comment hereunder shall not be construed or deemed as acceptance of
any such agreement or document by the Authority. No review and/ or observation of the
Authority and/ or its failure to review and/ or convey its observations on any document
shall relieve the Concessionaire of its obligations and liabilities under this Agreement in
any manner nor shall the Authority be liable for the same in any manner whatsoever.
5.2.3 The Concessionaire shall not make any addition, replacement or amendments to any of
the Financing Agreements without the prior written consent of the Authority if such
addition, replacement or amendment has, or may have, the effect of imposing or
increasing any financial liability or obligation on the Authority, and in the event that any
replacement or amendment is made without such consent, the Concessionaire shall not
enforce such replacement or amendment nor permit enforcement thereof against the
Authority. For the avoidance of doubt, the Authority acknowledges and agrees that it
shall not unreasonably withhold its consent for restructuring or rescheduling of the debt
of the Concessionaire and shall respond to the request for consent no later than 30 days
from the receipt of such request from the Concessionaire.
5.2.4 The Concessionaire shall procure that each of the Project Agreements contains provisions
that entitle the Authority and / or Lenders Representative to step into such agreement, in
its sole discretion, in substitution of the Concessionaire in the event of Termination or
Suspension (the “Covenant”). Further, it is clarified that in case both the Authority and
Lenders’ Representative decide to exercise their right to step-in, the Authority shall have
the sole right to step into the Project Agreements. For the avoidance of doubt, it is
expressly agreed that in the event the Authority does not exercise such rights of
substitution within a period not exceeding 90 (ninety) days from the Transfer Date, the
Project Agreements shall be deemed to cease to be in force and effect on the Transfer
Date without any liability whatsoever on the Authority and the Covenant shall expressly
provide for such eventuality. The Concessionaire expressly agrees to include the
Covenant in all its Project Agreements and undertakes that it shall, in respect of each of
the Project Agreements, procure and deliver to the Authority an acknowledgment and
undertaking, in a form acceptable to the Authority, from the counter party(ies) of each of
the Project Agreements, where under such counter party(ies) shall acknowledge and

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accept the Covenant and undertake to be bound by the same and not to seek any relief or
remedy whatsoever from the Authority in the event of Termination or Suspension.
5.2.5 Notwithstanding anything to the contrary contained in this Agreement, the
Concessionaire agrees and acknowledges that selection or replacement of the EPC
Contractor and an O&M Contractor and execution of the EPC Contract and O&M
Contract shall be subject to the prior approval of the Authority from national security and
public interest perspective, the decision of the Authority in this behalf being final,
conclusive and binding on the Concessionaire, and undertakes that it shall not give effect
to any such selection or contract without prior approval of the Authority. For the
avoidance of doubt, it is expressly agreed that approval of the Authority hereunder shall
be limited to national security and public interest perspective, and the Authority shall
endeavor to convey its decision thereon expeditiously and no later than 30 days from the
date of receipt of the proposal alongwith the draft agreement by the Authority. It is also
agreed that the Authority shall not be liable in any manner on account of grant or
otherwise of such approval and that such approval or denial thereof shall not in any
manner absolve the Concessionaire or its Contractors from any liability or obligation
under this Agreement.

5.3 Obligations relating to Change in Ownership

5.3.1 The Concessionaire shall not undertake or permit any Change in Ownership, except with
the prior written approval of the Authority.
5.3.2 Notwithstanding anything to the contrary contained in this Agreement, the
Concessionaire agrees and acknowledges that:
(a) all acquisitions of Equity by an acquirer, either by himself or with any person acting in
concert, directly or indirectly, including by transfer of the direct or indirect legal or
beneficial ownership or control of any Equity, in aggregate of 25% (twenty five per cent)
or more of the total Equity of the Concessionaire; or
(b) acquisition of any control directly or indirectly of the Board of Directors of the
Concessionaire by any person either by himself or together with any person or persons
acting in concert with him, shall constitute a Change in Ownership requiring prior
approval of the Authority from national security and public interest perspective, the
decision of the Authority in this behalf being final, conclusive and binding on the
Concessionaire, and undertakes that it shall not give effect to any such acquisition of
Equity or control of the Board of Directors of the Concessionaire without such prior
approval of the Authority. For the avoidance of doubt, it is expressly agreed that approval
of the Authority hereunder shall be limited to national security and public interest
perspective, and the Authority shall endeavor to convey its decision thereon
expeditiously. It is also agreed that the Authority shall not be liable in any manner on
account of grant or otherwise of such approval and that such approval or denial thereof
shall not in any manner absolve the Concessionaire from any liability or obligation under
this Agreement.
For the purposes of this Clause 5.3.2:
(i) the expression “acquirer”, “control” and “person acting in concert” shall have the
meaning ascribed thereto in the Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeover) Regulations, 2011 or any

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

statutory re-enactment thereof as in force as on the date of acquisition of Equity, or

the control of the Board of Directors, as the case may be, of the Concessionaire;
(ii) the indirect transfer or control of legal or beneficial ownership of Equity shall mean
transfer of the direct or indirect beneficial ownership or control of any company or
companies whether in India or abroad which results in the acquirer acquiring
control over the shares or voting rights of shares of the Concessionaire; and
(iii) power to appoint, whether by contract or by virtue of control or acquisition of
shares of any company holding directly or through one or more companies (whether
situate in India or abroad) the Equity of the Concessionaire, not less than half of the
directors on the Board of Directors of the Concessionaire or of any company,
directly or indirectly whether situate in India or abroad, having ultimate control of
25% (twenty five per cent) or more of the Equity of the Concessionaire shall
constitute acquisition of control, directly or indirectly, of the Board of Directors of
the Concessionaire.
5.4 Obligations relating to employment of foreign nationals
The Concessionaire acknowledges, agrees and undertakes that employment of foreign
personnel by the Concessionaire and/or its contractors and their subcontractors 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 Concessionaire and,
notwithstanding anything to the contrary contained in this Agreement, refusal of or
inability to obtain any such permits and approvals by the Concessionaire or any of its
contractors or sub-contractors shall not constitute Force Majeure Event, and shall not in
any manner excuse the Concessionaire from the performance and discharge of its
obligations and liabilities under this Agreement.
5.5 Obligations relating to employment of trained personnel
The Concessionaire shall ensure that the personnel engaged by it in the performance of its
obligations under this Agreement are at all times properly trained for their respective
function

5.6 Facilities for differently abled and elderly persons

The Concessionaire shall, in conformity with the guidelines issued from time to time by
the Ministry of Social Justice and Empowerment, or a substitute thereof, procure a barrier
free environment for the differently abled and for elderly persons using the Project.

5.7 Branding of Project

The Project or any part thereof shall not be branded in any manner to advertise, display or
reflect the name or identity of the Concessionaire or its shareholders. The Concessionaire
undertakes that it shall not, in any manner, use the name or entity of the Project to
advertise or display its own identity, brand equity or business interests, including those of
its shareholders, save and except as may be necessary in the normal course of business.
For the avoidance of doubt, it is agreed that the Concessionaire may display its own name
at a spot where other public notices are displayed for the Users. It is further agreed that
the Project shall be known, promoted, displayed and advertised by the name of Four-
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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

Km 55+900/Existing Km 59.250 of NH-71 to Design Km. 92+800/Existing Km

98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of
Old NH-205 to Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the
State of Andhra Pradesh under Bharatmala Pariyojana. .
5.8 Sole purpose of the Concessionaire
The Concessionaire having been set up for the sole purpose of exercising the rights and
observing and performing its obligations and liabilities under this Agreement, the
Concessionaire or any of its subsidiaries shall not, except with the previous written
consent of the Authority, be or become directly or indirectly engaged, concerned or
interested in any business other than as envisaged herein.

5.9 Obligations relating to Local Content

The Concessionaire [Class I Local Supplier/ Class II Local Supplier/ Non Local
Supplier] undertakes to ensure minimum Local Content in the Project Highway of
at least [50%/20%] duly complying with the provisions of Department for
Promotion of Industry and Internal Trade, Ministry of Commerce and Industry,
Government of India Order No. P-45021/2/2017-PP (BE- II) dated September 16,
2020, as amended or modified till Bid Due Date and the provisions under Rule
144(xi) of GFR, 2017.

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

ARTICLE 6
OBLIGATIONS OF THE AUTHORITY
6.1 Obligations of the Authority
6.1.1 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.
6.1.2 The Authority agrees to provide support to the Concessionaire and undertakes to observe,
comply with and perform, subject to and in accordance with the provisions of this
Agreement and Applicable Laws, the following
(a) upon written request from the Concessionaire, and subject to the Concessionaire
complying with Applicable Laws, provide reasonable support and assistance to
the Concessionaire in procuring Applicable Permits required from any
Government Instrumentality for implementation and operation of the Project;
(b) upon written request from the Concessionaire, provide reasonable assistance to
the Concessionaire in obtaining access to all necessary infrastructure facilities
and utilities, including water and electricity at rates and on terms no less
favorable to the Concessionaire than those generally available to commercial
customers receiving substantially equivalent services;
(c) procure that no barriers are erected or placed on or about the Project by any
Government Instrumentality or persons claiming through or under it, except for
reasons of Emergency, national security or law and order;
(d) [Deleted]
(e) Subject to and in accordance with Applicable Laws, grant to the Concessionaire
the authority to regulate use of the Project;
(f) Assist the Concessionaire in procuring police assistance for regulation of Users,
removal of trespassers and security on or at the Project;
(g) Not do or omit to do any act, deed or thing which may in any manner is violating
of any of the provisions of this Agreement;
(h) support, cooperate with and facilitate the Concessionaire in the implementation
and operation of the Project in accordance with the provisions of this Agreement;
(i) upon written request from the Concessionaire and subject to the provisions of
Clause 5.4, provide reasonable assistance to the Concessionaire and any
expatriate personnel of the Concessionaire or its Contractors to obtain applicable
visas and work permits for discharging their respective obligations under this
Agreement and the Project Agreements;
(j) undertake rehabilitation and resettlement of persons affected by construction of
the Project and bear all costs and expense in respect thereof, save and except as
otherwise provided in this Agreement; and
[(k) subject to the Concessionaire complying with Applicable Laws, provide
reasonable support and assistance to the Concessionaire in procuring approvals,

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other than approval of the General Approval Drawings of the Railway authorities
for construction of such road over bridges/under bridges.]

6.2 Maintenance obligations prior to Appointed Date

6.2.1 During the Development Period, the Concessionaire shall maintain the existing Project
Highway, in such a manner so as to ensure that the road is in pothole free condition and
also to ensure that the quality of service and safety are maintained and in the event of any
material deterioration or damage other than normal wear and tear, the Concessionaire
shall undertake repair thereof. It is deemed that the Concessionaire has made necessary
provisions for inclusion of costs related to maintenance during the Development Period in
its Bid. Provided that in case Appointed Date is not achieved and the Concession
Agreement is terminated prior to achievement of Appointed Date, the Concessionaire
shall be reimbursed the cost of maintenance during Development Period by the Authority
after due certification by the Authorized Representative of the Authority. For the purpose
of such reimbursement, the lump sum per kilometer rate of reimbursement for a period of
1 (one) year would be Rs. 3,42,000 (Rupees three lakh forty two thousand) and shall be
paid on a pro-rata basis for the period concerned. For the avoidance of doubt, the
Concessionaire would be reimbursed the cost of maintenance only in case of termination
prior to Appointed Date and only if it maintains the Project as envisaged in this Clause
6.2.1.
6.2.2 In case of failure of the Concessionaire to undertake maintenance or repair of the Project,
the Authority shall undertake maintenance or repair of the Project Highway at the cost
and expense of the Concessionaire and recover the said cost as determined by the
Independent Engineer from the Performance security, submitted by the Concessionaire.
For the avoidance of doubt, the Concessionaire shall undertake repairs only for ensuring
safe operation of the Project Highway and in the event of excessive deterioration or
damage caused due to unforeseen events such as floods or torrential rain the Authority
shall undertake special repairs at its own cost and expense.
6.2.3 During the Development Period, the Concessionaire shall protect the Project Highway
from any and all occupations, encroachments or Encumbrances, and shall not place or
create nor permit any Contractor or other person claiming through or under the
Concessionaire to place or create any Encumbrance or security interest over all or any
part of the Project Highway or under this Agreement, save and except as otherwise
expressly set forth in this Agreement. Further, the Concessionaire shall perform its
obligations in a manner that two existing lanes of the Project Highway or an alternative
thereof are open to traffic at all times during the Development Period.

6.3 Obligations relating to refinancing

Upon request made by the Concessionaire to this effect, the Authority shall, in conformity
with any regulations or guidelines that may be notified by the Government or the Reserve
Bank of India, as the case may be, permit and enable the Concessionaire to secure
refinancing on such terms as may be agreed upon between the Concessionaire and the
entity providing such refinancing; provided, however, that the refinancing hereunder shall
always be subject to the prior consent of the Authority, which consent shall not be
unreasonably withheld. The Authority shall endeavor to convey its decision on such
request of the Concessionaire within 30 days of receipt of the proposal by the Authority.

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 Representations and warranties of the Concessionaire
The Concessionaire represents and warrants to the Authority that:
(a) It is duly organized 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;
(b) it has taken all necessary corporate and 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;
(c) {the selected bidder/ Consortium Members and its/their} Associates have the
financial standing and resources to fund the required Equity and to raise the debt
necessary for undertaking and implementing the Project in accordance with this
Agreement;
(d) 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;
(e) 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
hereunder including any obligation, liability or responsibility hereunder;
(f) 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;
(g) 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
those of any member of the Consortium} 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;
(h) 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;
(i) it has no knowledge of any violation or default with respect to any order, writ,
injunction or decree of any court or 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;

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(j) 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;
(k) it shall at no time undertake or permit any Change in Ownership except in
accordance with the provisions of Clause 5.3 and that the {selected bidder/
Consortium Members}, together with {its/ their} Associates, hold not less than
51% (fifty-one percent) of its issued and paid up Equity as on the date of this
Agreement; and that each Consortium Member whose technical and financial
capacity was evaluated for the purposes of pre-qualification and short-listing in
response to the Request for Proposals shall hold at least 26% (twenty six per cent)
of Equity during the Construction Period and six months thereafter along with its
Associates;
Provided further that any such request made under Clause 7.1(k) and / or Article
42, at the option of the Authority, may be required to be accompanied by a
suitable no objection letter from Senior Lenders.
(l) {the selected bidder/ each Consortium Member} is duly organized and validly
existing under the laws of the jurisdiction of its incorporation or registration, as
the case may be, and has requested the Authority to enter into this Agreement
with {itself/the Concessionaire} pursuant to the Letter of Award, and has agreed
to and unconditionally accepted the terms and conditions set forth in this
Agreement;
(m) all its rights and interests in the Project shall pass to and vest in the Authority on
the Transfer Date free and clear of all liens, claims and Encumbrances, without
any further act or deed on its part or that of the Authority, and that none of the
Project Assets shall be acquired by it Subject to any agreement under which a
security interest or other lien or Encumbrance is retained by any person, save and
except as expressly provided in this Agreement;
(n) 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;
(o) 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 Concession
or entering into this Agreement or for influencing or attempting to influence any
officer or employee of the Authority in connection therewith;
(p) all information provided by the {selected bidder/ Consortium Members} in
response to the Request for Proposals or otherwise, is to the best of its knowledge
and belief, true and accurate in all material respects; and
(q) All undertakings and obligations of the Concessionaire arising from the Request
for Proposals or otherwise shall be binding on the Concessionaire as if they form
part of this Agreement.

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

7.2 Representations and warranties of the Authority

The Authority represents and warrants to the Concessionaire that:
(a) 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;
(b) It has taken all necessary actions under Applicable Laws to authorize the
execution, delivery and performance of this Agreement;
(c) It has the financial standing and capacity to perform its obligations under this
Agreement;

(d) This Agreement constitutes a legal, valid and binding obligation enforceable
against it in accordance with the terms hereof;

(e) 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;
(f) It has complied with Applicable Laws in all material respects;
(g) It has the right, power and authority to manage and operate the Project; and
(h) It shall procure good and valid right to the Site, and has power and authority to
grant a license in respect thereto to the Concessionaire.

7.3 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 right, remedy or
obligation of either Party under this Agreement.

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

ARTICLE 8
DISCLAIMER
8.1 Disclaimer
8.1.1 The Concessionaire acknowledges that prior to the execution of this Agreement, the
Concessionaire has, after a complete and careful examination, made an independent
evaluation of the Request for Proposals, Scope of the Project, Specifications and
Standards, Site, existing structures, local conditions, physical qualities of ground, subsoil
and geology, 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. 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 Concessionaire confirms
that it shall have no claim whatsoever against the Authority in this regard.
8.1.2 The Concessionaire acknowledges and hereby accepts the risk of inadequacy, mistake or
error in or relating to any of the matters set forth in Clause 8.1.1 above and hereby
acknowledges and agrees that the Authority shall not be liable for the same in any manner
whatsoever to the Concessionaire, {the Consortium Members and their} Associates or
any person claiming through or under any of them.
8.1.3 The Parties agree that any mistake or error in or relating to any of the matters set forth in
Clause 8.1.1 above shall not vitiate this Agreement, or render it voidable.
8.1.4 In the event that either Party becomes aware of any mistake or error relating to any of the
matters set forth in Clause 8.1.1 above, that Party shall immediately notify the other
Party, specifying the mistake or error; provided, however, that a failure on part of the
Authority to give any notice pursuant to this Clause 8.1.4 shall not prejudice the
disclaimer of the Authority contained in Clause 8.1.1and shall not in any manner shift to
the Authority any risks assumed by the Concessionaire pursuant to this Agreement.
8.1.5 Except as otherwise provided in this Agreement, all risks relating to the Project shall be
borne by the Concessionaire and the Authority shall not be liable in any manner for such
risks or the consequences thereof.

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Part III
Development and Operations

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

ARTICLE 9
PERFORMANCE SECURITY
9.1 Performance Security
9.1.1 The Concessionaire shall, for the performance of its obligations hereunder, provide to the
Authority no later than 30(thirty) days from the date of this Agreement, an irrevocable
and unconditional guarantee from a Bank for a sum equivalent to Rs. ***** crore
(Rupees ***** crore)2 in the form set forth in Schedule-F (the “Performance Security”).
9.1.2 Notwithstanding anything to the contrary contained in this Agreement, in the event
Performance Security is not provided by the Concessionaire within a period of 30(thirty)
days from the date of this Agreement, the Authority may suspend the bidder for
participation in the tendering process for the works of MoRTH/NHAI/NHIDCL and
works under other Centrally Sponsored Schemes for a period of One Year from the bid
due date of this work and thereupon all rights, privileges, claims and entitlements of the
Concessionaire under or arising out of this Agreement shall be deemed to have been
waived by, and to have ceased with the concurrence of the Concessionaire, and this
Agreement shall be deemed to have been terminated by mutual agreement of the Parties.

9.2 Appropriation of Performance Security

Upon occurrence of a Concessionaire Default or failure to meet any Condition Precedent,
the Authority shall, without prejudice to its other rights and remedies hereunder or in law,
be entitled to encash and appropriate from the Performance Security the amounts due to it
for and in respect of such Concessionaire Default or for failure to meet any Condition
Precedent. Upon such encashment and appropriation from the Performance Security, the
Concessionaire shall, within 15 (fifteen) days thereof, replenish, in case of partial
appropriation, to the original level of the Performance Security, and in case of
appropriation of the entire Performance Security provide a fresh Performance Security, as
the case may be, failing which the Authority shall be entitled to terminate this Agreement
in accordance with Article 31.
Provided that upon appropriation on account of Concessionaire’s Default the
Concessionaire shall replenish the Performance Security and upon such replenishment or
furnishing of a fresh Performance Security, as the case may be, the Concessionaire shall
be entitled to an additional Cure Period of 120 (one hundred and twenty) days for
remedying the Concessionaire Default, save and except as provided in Clause 4.5 of this
Agreement, and in the event of the Concessionaire 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 31.

9.3 Release of Performance Security

The Performance Security shall remain in force and effect for a period of one year from
the Appointed Date, but shall be released earlier upon the Concessionaire expending on
Project construction an aggregate sum that is not less than 30% (thirty per cent) of the Bid
Project Cost; provided, however, that the Performance Security shall not be released and
shall be kept alive by the Concessionaire if the Concessionaire is in breach of this

2
Calculated @ 3% (three per cent) of the Bid Project Cost

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

Agreement. Upon request made by the Concessionaire for release of the Performance
Security along with the particulars which establish satisfaction of the requirements
specified in this Clause 9.3, the Authority shall release the Performance Security
forthwith.

9.4 Deleted
9.5 Deleted
9.6 References to Performance Security
References to Performance Security occurring in this Agreement for and in respect of any
period prior to the delivery of the Performance Security by the Concessionaire to the
Authority, or in respect of any period subsequent to the expiry or release thereof, as the
case may be, shall be construed solely for the purposes of calculating the amount of
Damages payable by the Concessionaire.
9.7 Additional Performance Security
The Concessionaire 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)3 in the form set forth in Schedule-F (the “Additional
Performance Security”), to be modified, mutatis mutandis, for this purpose as security to
the Authority if the Bid Project Cost of the Selected Bidder is lower by more than 10%
with respect to the Estimated Project Cost. The requirement of submitting the Additional
Performance Security shall be a Condition Precedent. Failure to maintain the Additional
Performance Security shall be treated as Concessionaire Default as per Clause 31.1.1.

Provided, the amount of Additional Performance Security shall not exceed the
amount of Performance Security

9.8 Appropriation and Release of Additional Performance Security

Notwithstanding anything contrary contained in this Agreement, if this Agreement is
terminated, except for Authority Default or due to the Force Majeure, prior to
achievement of the III (third) Project Milestone, the Authority shall have the right to
encash the Additional Performance Security in addition to the Performance Security.
However, the Additional Performance Security shall be released upon achievement of
Project Milestone – III as defined in Schedule G and shall be released immediately and no
later than 30 (thirty) days from the certification of achievement of Project Milestone- III.

3
Calculated @ 10% of the difference in the Estimated Project Cost and the Bid Project Cost or @ 3% of the Bid Project
Cost (equivalent to Performance Security); whichever is lower.

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Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 41
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

ARTICLE 10
RIGHT OF WAY
10.1 The Site
The site of the Project shall comprise the real estate described in Schedule-A and in
respect of which the Right of Way shall be provided and granted by the Authority to the
Concessionaire as a licensee under and in accordance with this Agreement (the “Site”).
For the avoidance of doubt, it is hereby acknowledged and agreed that references to the
Site shall be construed as references to the real estate required for the Project as set forth
in Schedule-A.

10.2 License, Access and Right of Way

10.2.1 The Authority hereby grants to the Concessionaire access to the Site for carrying out any
surveys, investigations and soil tests that the Concessionaire may deem necessary during
the Development Period, it being expressly agreed and understood that the Authority shall
have no liability whatsoever in respect of survey, investigations and tests carried out or
work undertaken by the Concessionaire on or about the Site pursuant hereto in the event
of Termination or otherwise.
10.2.2 In consideration of the Project, this Agreement and the covenants and warranties on the
part of the Concessionaire herein contained, the Authority, in accordance with the terms
and conditions set forth herein, hereby grants to the Concessionaire, commencing from
the Appointed Date, leave and license rights in respect of all the land (along with any
buildings, constructions or immovable assets, if any, thereon) comprising the Site which
is described, delineated and shown in Schedule-A hereto (the “Licensed Premises”), on
an “as is where is” basis, free of any Encumbrances, to develop, operate and maintain the
said Licensed Premises, together with all and singular rights, liberties, privileges,
easements and appurtenances whatsoever to the said Licensed Premises, hereditaments or
premises or any part thereof belonging to or in any way appurtenant thereto or enjoyed
therewith, for the duration of the Concession Period and, for the purposes permitted under
this Agreement, and for no other purpose whatsoever.
10.2.3 The license, access and right of way granted by this Agreement to the Concessionaire
shall always be subject to existing rights of way and the Concessionaire shall perform its
obligations in a manner that twoexisting lanes of the Project Highway or an alternative
thereof are open to traffic at all times during the Construction Period..
10.2.4 It is expressly agreed that the license granted hereunder shall terminate automatically and
forthwith, without the need for any action to be taken by the Authority to terminate the
license, upon the Termination of this Agreement for any reason whatsoever. For the
avoidance of doubt, the Parties expressly agree that notwithstanding any temporary or
permanent structures erected on the Site by the Concessionaire or its sub-licensees, the
license in respect of the Site shall automatically terminate, without any further act of the
Parties, upon Termination of this Agreement.
10.2.5 The Concessionaire hereby irrevocably appoints the Authority (acting directly or through
a nominee) to be its true and lawful attorney, to execute and sign in the name of the
Concessionaire a transfer or surrender of the license granted hereunder at any time after
the Concession Period has expired or has been terminated earlier in terms hereof, a

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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sufficient proof of which will be the declaration of any duly authorized officer of the
Authority, and the Concessionaire consents to it being registered for this purpose.
10.2.6 It is expressly agreed that trees on the Site are property of the Authority except that the
Concessionaire shall be entitled to exercise usufructuary rights thereon during the
Concession Period.

10.3 Procurement of the Site

10.3.1 Pursuant to the notice specified in Clause 4.1.2, the Authority Representative and the
Concessionaire shall, on a mutually agreed date and time, 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. 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 granted to the Concessionaire. Signing of the
memorandum, in 2 (two) counterparts (each of which shall constitute an original), by the
authorized representatives of the Parties shall, subject to the provisions of Clause 10.2.2,
be deemed to constitute a valid license and Right of Way to the Concessionaire for free
and unrestricted use and development of the vacant and unencumbered Site during the
Concession Period under and in accordance with the provisions of this Agreement and for
no other purpose whatsoever. For the avoidance of doubt, it is agreed that valid license
and Right of Way with respect to the parts of the Site as set forth in the Appendix shall be
deemed to have been granted to the Concessionaire upon vacant access thereto being
provided by the Authority to the Concessionaire.
10.3.2 Without prejudice to the provisions of Clause 10.3.1, the Parties hereto agree that on or
prior to the Appointed Date, the Authority shall have granted vacant access and Right of
Way such that the Appendix shall not include land which shall in any manner prevent the
Concessionaire from undertaking construction of the Project to the extent of at least 80%
(eighty per cent) of the length thereof, and in the event Financial Close is delayed on
account of delay in grant of such vacant access and Right of Way, the Authority shall be
liable to payment of Damages solely under the provisions of Clause 4.2. For the
avoidance of doubt, the Authority acknowledges and agrees that the Appendix shall not
include any land which may prevent the construction of any critical element of the Project
without which the Completion Certificate or Provisional Certificate may not be granted.
The Authority further acknowledges and agrees that prior to the Appointed Date, it shall
have procured issuance of the statutory notification under Applicable Laws for vesting of
all land comprising the Project in the Government and has taken possession of at least
80% (eighty per cent) of the length thereof, save and except stray plots of land which the
Parties mutually agree to exclude from such vesting prior to the Appointed Date. The
Parties also acknowledge and agree that the conditions specified in this Clause 10.3.2
shall not be modified or waived by either Party.
10.3.3 On and after signing the memorandum referred to in Clause 10.3.1, and until the Transfer
Date, the Concessionaire shall maintain a round-the-clock vigil over the Site and shall
ensure and procure that no encroachment thereon takes place, and in the event of any
encroachment or occupation on any part thereof, the Concessionaire shall report such
encroachment or occupation forthwith to the Authority and undertake its removal at its
cost and expenses.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
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10.3.4 The Authority shall make best efforts to procure and grant, no later than 90 (ninety) days
from the Appointed Date, the Right of Way to the Concessionaire in respect of all land
included in the Appendix, and in the event of delay for any reason other than Force
Majeure or breach of this Agreement by the Concessionaire, it shall pay to the
Concessionaire Damages in a sum calculated at the rate of Re. 1 (Rupee one) per day for
every 10 (ten) square meters or part thereof, commencing from the 91st (ninety first) day
of the Appointed Date and until such Right of Way is procured or 180 (one hundred and
eighty) days from the Appointed Date whichever is earlier. The Damages payable in
terms of this clause shall be the sole remedy available to the Concessionaire and the
Authority shall not be liable for any consequential loss or damage to the Concessionaire.
In the event, the Authority is unable to provide the remaining Site within 180 (one
hundred and eighty days) from the Appointed Date, the remaining Site of the Project
Highway shall be removed from the scope of the work under the provision of Change of
Scope.
10.3.5 Upon receiving Right of Way in respect of any land included in the Appendix, the
Concessionaire shall complete the Construction Works thereon within a reasonable period
to be determined by the Independent Engineer in accordance with Good Industry Practice;
provided that the issue of Provisional Certificate shall not be affected or delayed on
account of vacant access to any part of the Site not being granted to the Concessionaire or
any construction on such part of the Site remaining incomplete on the date of Tests on
account of the delay or denial of such access thereto. For the avoidance of doubt, it is
expressly agreed that Construction Works on all lands for which Right of Way is granted
within 146 (one hundred and forty six) days of the Appointed Date shall be completed on
or before the Scheduled Completion Date. It is further agreed that the obligation of the
Concessionaire to complete the affected Construction Works shall subsist so long as the
Authority continues to pay the Damages specified herein, and upon the Authority ceasing
to pay such Damages after giving 60 (sixty) days’ notice thereof to the Concessionaire,
the obligation of the Concessionaire to complete such works on such part of the Site shall
cease forthwith. It is also expressly agreed that completion of the respective Construction
Works within the time determined by the Independent Engineer hereunder shall be
deemed to be Project Milestones for the purposes of levy and recovery of Damages under
and in accordance with the provisions of Clause 12.3.2.
10.3.6 The Authority shall procure the additional land required for construction of works
specified in Change of Scope Order issued under Article 16, in accordance with the
provisions of this Agreement, and upon procurement thereof, such land shall form part of
the Site. In case of any additional land required for Toll Plazas, Traffic Aid Posts,
Medical Aid Posts, under passes and over passes or for construction of works specified in
Change of Scope Order issued under Article 16, in accordance with this Agreement and
upon procurement, such land shall form part of the Site; provided also that the land to be
acquired by the Authority hereunder as a part of the Site shall be deemed to be included
in the Appendix referred to in this Clause 10.3 and dealt with in accordance with the
provisions thereof. For the avoidance of doubt, it is agreed that the minimum area of land
to be acquired for the Toll Plaza and approach roads thereof shall conform to the
provisions of Schedule - B and Schedule - C.
10.3.7 The Parties expressly agree that the obligation to provide land for 80% (eighty per cent)
of the Site shall mean and imply provision of land that shall enable the Concessionaire to
undertake construction on at least 80% (eighty per cent) of the length of the Project.]

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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10.4 Site to be free from Encumbrances

Subject to the provisions of Clause 10.3, the Site shall be made available by the Authority
to the Concessionaire pursuant hereto free from all Encumbrances and occupations and
without the Concessionaire 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 Concession Period, except insofar as otherwise expressly
provided in this Agreement. For the avoidance of doubt, it is agreed that existing rights of
way, easements, privileges, liberties and appurtenances to the Licensed Premises shall not
be deemed to be Encumbrances. It is further agreed that the Concessionaire accepts and
undertakes to bear any and all risks arising out of the inadequacy or physical condition of
the Site.

10.5 Protection of Site from Encumbrances

During the Concession Period, the Concessionaire shall protect the Site from any and all
occupations, encroachments or Encumbrances, and shall not place or create nor permit
any Contractor or other person claiming through or under the Concessionaire to place or
create any Encumbrance or security interest over all or any part of the Site or the Project
Assets, or on any rights of the Concessionaire therein or under this Agreement, save and
except as otherwise expressly set forth in this Agreement.

10.6 Special/temporary right of way

The Concessionaire 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 Concessionaire shall obtain
at its cost such facilities on or outside the Site as may be required by it for the purposes of
the Project and the performance of its obligations under this Agreement.

10.7 Access to the Authority and Independent Engineer

The license, right of way and right to the Site granted to the Concessionaire hereunder
shall always be subject to the right of access of the Authority and the Independent
Engineer and their employees and agents for inspection, viewing and exercise of their
rights and performance of their obligations under this Agreement.

10.8 Geological and archaeological finds

It is expressly agreed that mining, geological or archaeological rights do not form part of
the license granted to the Concessionaire under this Agreement and the Concessionaire
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 Concessionaire 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 Authority or the concerned Government Instrumentality may
reasonably give for the removal of such property. For the avoidance of doubt, it is agreed
that any reasonable expenses incurred by the Concessionaire 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

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reasonable period so as to enable the Concessionaire to continue its Construction Works

with such modifications as may be deemed necessary.

10.9 Land for wayside amenities

10.9.1 The additional land earmarked for this purpose in Schedule-A shall be utilized by the
Concessionaire for provision of wayside amenities which may include public toilets, rest
areas, cafeteria, motels, medical facilities and other facilities or amenities for Users of the
Project Highway.
10.9.2 The Concessionaire may procure additional land at its own cost and expense for
construction and operation of additional facilities and the Authority shall have no
obligation or liability in respect thereof. For the avoidance of doubt, the Parties agree that
any land acquired by the Concessionaire under this Clause shall be retained by it after the
Transfer Date and the Authority shall have no right or lien on such land at any time
during or after the Concession Period. The Parties further agree that the Concessionaire
shall seek prior consent of the Authority to connect any Additional Facility to the Project
and such consent shall not be unreasonably withheld.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 46
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

ARTICLE 11
UTILITIES, ASSOCIATED ROADS AND TREES
11.1 Existing utilities and roads
Notwithstanding anything to the contrary contained herein, the Concessionaire shall
ensure that the respective entities owning the existing roads, right of way or utilities on,
under or above the Site are enabled by it to keep such utilities in continuous satisfactory
use, if necessary, by providing suitable temporary or permanent diversions with the
authority of the controlling body of that road, right of way or utility, and the Authority
shall, upon written request from the Concessionaire, initiate and undertake at the
Concessionaire’s cost, legal proceedings for acquisition of any right of way necessary for
such diversion.

11.2 Shifting of obstructing utilities

11.2.1
The Concessionaire shall, subject to applicable laws and with the assistance of the
Authority, undertake 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, as per the scope given in Schedule B and in accordance
with applicable standards and specifications of concerned utility owning entity. The cost
of shifting of such, utilities indicated in Schedule-B is payable to the Concessionaire as
part of Bid Project Cost. Cost of Shifting Utilities not included in the Schedule-B, if any,
shall be treated as Change of Scope. The Authority will provide assistance to the
Concessionaire for obtaining the estimates for shifting of such utilities from the entity
owning such electric lines, water pipes or telephone cables, as the case may be. The
Concessionaire shall execute such utility shifting works under the supervision of utility
owning agency and Independent Engineer (IE) in accordance with the provision of
agreement. The supervision charges only shall be paid by the Authority to the Utility
Owning Entity. In the event of any delay in shifting thereof, the Concessionaire shall be
responsible for failure to perform any of its obligations here under if such failure is not as
a direct consequence of delay on the part of the entity owning such electric lines, water
pipes or telephone cables, as the case may be.
The dismantled material/scrap of existing Utility to be shifted/dismantled shall belong to
the Concessionaire who would be free to dispose-off the dismantled material as deemed
fit by them.
The work of shifting of utilities can be taken up by the Concessionaire any time after
signing of the Agreement.11.2.2 In case Appointed date is not achieved and the
concession agreement is terminated prior to achievement of appointed date, the
concessionaire shall be reimbursed the cost of utility shifting carried out during
development period by the Authority after due certification by the authorized
representative of the Authority. For the purpose of such reimbursement the rates in the
approved estimates by the concerned utility department shall be paid as per actual work
carried out at site. For the avoidance of doubt, the concessionaire would be reimbursed
the cost of utility shifting only in case of termination prior to appointed date and only if it
carry out the utility shifting as envisaged in Clause 11.2.1.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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11.3 New utilities and roads

The Concessionaire 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
Concessionaire, 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 11.3 shall not in any manner relieve the Concessionaire of its obligation to
maintain the Project in accordance with this Agreement and any damage caused by such
use shall be restored forthwith.

11.4 Felling of trees

The Authority shall assist the Concessionaire 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, operation 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 Concessionaire,
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. For the avoidance of doubt, 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.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

ARTICLE 12
CONSTRUCTION OF THE PROJECT
12.1 Obligations prior to commencement of construction
In addition to its obligations of maintaining the Project Highway during the Development
Period, prior to commencement of Construction Works, the Concessionaire shall:
(a) submit to the Authority and the Independent Engineer its detailed design,
construction methodology, quality assurance procedures, and the procurement,
engineering and construction time schedule for completion of the Project in
accordance with the Project Completion Schedule as set forth in Schedule-G;
(b) Appoint its representative duly authorized to deal with the Authority in respect of
all matters under or arising out of or relating to this Agreement;
(c) undertake, do and perform all such acts, deeds and things as may be necessary or
required before commencement of construction under and in accordance with this
Agreement, Applicable Laws and Applicable Permits; and
(d) Make its own arrangements for quarrying and procurement of materials needed
for the Project under and in accordance with Applicable Laws and Applicable
Permits.

12.2 Drawings
In respect of the Concessionaire’s obligations relating to the Drawings of the Project as
set forth in Schedule-H, the following shall apply:
(a) The Concessionaire shall prepare and submit, with reasonable promptness and in such
sequence as is consistent with the Project Completion Schedule, 3 (three) copies each
of all Drawings to the Independent Engineer for review.

(b) By submitting the Drawings for review to the Independent Engineer, the
Concessionaire shall be deemed to have represented that it has determined and
verified that the design and engineering, including the field construction criteria
related thereto, are in conformity with the Scope of the Project, Specifications and
Standards, Applicable Laws and Good Industry Practice.

(c) Within 15 (fifteen) days of the receipt of the Drawings, the Independent Engineer
shall review the same and convey its observations to the Concessionaire with
particular reference to their conformity or otherwise with the Scope of the Project and
the Specifications and Standards. The Concessionaire shall not be obliged to await the
observations of the Independent Engineer on the Drawings submitted pursuant hereto
beyond the said 15 (fifteen) days period and may begin or continue Construction
Works at its own discretion and risk.

(d) If the aforesaid observations of the Independent 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 Concessionaire and resubmitted to
the Independent Engineer for review. The Independent Engineer shall give its
observations, if any, within 7 (seven) days of receipt of the revised Drawings.

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(e) No review and/or observation of the Independent Engineer and/or its failure to review
and/or convey its observations on any Drawings shall relieve the Concessionaire of
its obligations and liabilities under this Agreement in any manner nor shall the
Independent Engineer or the Authority be liable for the same in any manner.

(f) Without prejudice to the foregoing provisions of this Clause 12.2, the Concessionaire
shall submit to the Authority for review and comments, its Drawings relating to
alignment of the Project, finished road level and general arrangement drawings of
major bridges, flyovers and grade separators, and the Authority shall have the right
but not the obligation to undertake such review and provide its comments, if any,
within 30 (thirty) days of the receipt of such Drawings. The provisions of this Clause
12.2 shall apply mutatis mutandis to the review and comments hereunder.

(g) Within 90 (ninety) days of COD, the Concessionaire shall furnish to the Authority
and the Independent Engineer a complete set of as-built Drawings, in 2 (two) hard
copies and in its editable digital format or in such other medium or manner as may be
acceptable to the Authority, reflecting the Project as actually designed, engineered
and constructed, including an as- built survey illustrating the layout of the Project and
setback lines, if any, of the buildings and structures forming part of Project Facilities.

12.3 Construction of the Project

12.3.1 On or after the Appointed Date, the Concessionaire shall undertake construction of the
Project as specified in Schedule-B and Schedule-C, and in conformity with the
Specifications and Standards set forth in Schedule-D. The 730th (seven hundred and
thirtieth) day from the Appointed Date shall be the scheduled date for completion of the
Project (the “Scheduled Completion Date”) and the Concessionaire agrees and
undertakes that the Project shall be completed on or before the Scheduled Completion
Date.
12.3.2 The Concessionaire shall construct the Project in accordance with the Project Completion
Schedule set forth in Schedule-G. In the event that the Concessionaire fails to achieve any
Project Milestone within a period of 90 (ninety) days from the date set forth for such
Project Milestone in Schedule-G, unless such failure has occurred due to Force Majeure
or for reasons attributable to the Authority, it shall pay Damages to the Authority in a sum
calculated at the rate of 0.1% (zero point one per cent) of the amount of Performance
Security for delay of each day until such Project Milestone is achieved; provided that if
any or all Project Milestones or the Scheduled Completion Date are extended in
accordance with the provisions of this Agreement, the dates set forth in Schedule-G shall
be deemed to be modified accordingly and the provisions of this Agreement shall apply as
if Schedule-G has been amended as above; provided further that in the event COD is
achieved on or before the Scheduled Completion Date, the Damages paid under this
Clause 12.3.2 shall be refunded by the Authority to the Concessionaire, but without any
interest thereon. For the avoidance of doubt, it is agreed that recovery of Damages under
this Clause 12.3.2 shall be without prejudice to the rights of the Authority under this
Agreement, including the right of Termination thereof.
12.3.3 In the event that the Project is not completed and COD does not occur within 270 (two
hundred and seventy) days from the Scheduled Completion Date, unless the delay is on

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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account of reasons attributable to the Authority or due to Force Majeure, the Authority
shall be entitled to terminate this Agreement.

12.4 Maintenance during Construction Period

12.4.1 During the Construction Period, the Concessionaire shall maintain, at its cost, the existing
Project Highway to ensure that the road is in pothole free condition is maintained , and
shall undertake the necessary repair and maintenance works for this purpose; provided
that the Concessionaire may, at its cost, interrupt and divert the Users and other persons if
such interruption and diversion is necessary for the efficient progress of Construction
Works and conforms to Good Industry Practice; provided further that such interruption
and diversion shall be undertaken by the Concessionaire only with the prior written
approval of the Independent Engineer which approval shall not be unreasonably withheld.
Further, in case the Scheduled Completion Date gets extended due to delay attributable
solely to the Authority, the Concessionaire shall be liable to maintain in the Project
Highway for such extended period and shall be entitled to receive reimbursement of cost
of maintenance for such extended period at the rate specified in Clause 6.2.1. For the
avoidance of doubt, it is agreed that the Concessionaire shall at all times be responsible
for ensuring safe operation of the Project.
12.4.2 In the event of default by the Concessionaire in discharging the obligations specified in
Clause 12.4.1, the Authority may levy and recover Damages equal to 0.2% (zero point
two per cent) of the Performance Security for each day of default hereunder.
12.4.3 The Parties expressly agree that pursuant to the provisions of Clause 12.4.1, the
Concessionaire shall, about 7 (seven) days prior to the date of this Agreement and with
prior notice to the Authority and alongwith the Authority’s Representative, undertake
video recording of the condition and status of the Project, which recording shall be
compiled into a 3 (three)-hour digital video disc or any substitute thereof, and shall
provide 3 (three) copies of such recording to the Authority within 2 (two) days of the date
of this Agreement. The Authority may, in its discretion, undertake another video
recording in the presence of the Concessionaire’s representative, within 7 (seven) days of
the date of this Agreement, and substitute its video recording for the video recording
undertaken by the Concessionaire. The Parties further agree that such video recording
shall constitute evidence of the status and condition of the Project as on the date of such
recording.

12.5 Deleted

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ARTICLE 13
MONITORING OF CONSTRUCTION
13.1 Monthly progress reports
During the Construction Period, the Concessionaire shall, no later than 7 (seven) days
after the close of each month, furnish to the Authority and the Independent Engineer a
monthly report on physical and financial progress of the Construction Works and shall
promptly give such other relevant information as may be required by the Independent
Engineer.

13.2 Inspection
During the Construction Period, the Independent Engineer shall inspect the Project at
least once a month and make a report of such inspection (the “Inspection Report”)
stating in reasonable detail the defects or deficiencies, if any, with particular reference to
the Project Completion Schedule, Scope of the Project and Specifications and Standards.
It shall send a copy of the Inspection Report to the Authority and the Concessionaire
within 7 (seven) days of such inspection and upon receipt thereof, the Concessionaire
shall rectify and remedy the defects or deficiencies, if any, stated in the Inspection
Report. Such inspection or submission of Inspection Report by the Independent Engineer
shall not relieve or absolve the Concessionaire of its obligations and liabilities hereunder
in any manner whatsoever.

13.3 Tests
13.3.1 For determining that the Construction Works conform to the Specifications and
Standards, the Independent Engineer shall require the Concessionaire to carry out or
cause to be carried out tests, at such time and frequency and in such manner as may be
specified by the Independent Engineer from time to time, in accordance with Good
Industry Practice for quality assurance. The size of sample for such tests shall, to the
extent possible, not exceed 10% (ten per cent) of the quantity and/or number of tests
required by Good Industry Practice for the construction works undertaken by the
Authority through their contractors. The Concessionaire shall, with due diligence, carry
out or cause to be carried out all the tests in accordance with the instructions of the
Independent Engineer and furnish the results thereof to the Independent Engineer. One
half of the costs incurred on such tests, and to the extent certified by the Independent
Engineer as reasonable, shall be reimbursed by the Authority to the Concessionaire.
Provided, however, that the Independent Engineer may, instead of carrying out the tests
specified hereunder, at its option decide to witness, or participate in, any of the tests to be
undertaken by the Concessionaire for its own quality assurance in accordance with Good
Industry Practice, and in such an event, the Concessionaire shall cooperate with, and
provide the necessary assistance to, the Independent Engineer for discharging its
functions hereunder. For the avoidance of doubt, the costs to be incurred on any test
which is undertaken for determining the rectification of any defect or deficiency in
construction shall be borne solely by the Concessionaire.
13.3.2 In the event that results of any tests conducted under this Clause 13.3 establish any
defects or deficiencies in the Construction Works, the Concessionaire shall carry out
remedial measures and furnish a report to the Independent Engineer in this behalf. The
Independent Engineer shall require the Concessionaire to carry out or cause to be carried

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out tests to determine that such remedial measures have brought the Construction Works
into compliance with the Specifications and Standards, and the procedure set forth in this
Clause 13.3 shall be repeated until such Construction Works conform to the
Specifications and Standards. For the avoidance of doubt, it is agreed that tests pursuant
to this Clause 13.3 shall be undertaken in addition to and independent of the tests that
shall be carried out by the Concessionaire for its own quality assurance in accordance
with Good Industry Practice. It is also agreed that a copy of the results of such tests shall
be sent by the Concessionaire to the Independent Engineer forthwith.

13.4 Delays during construction

Without prejudice to the provisions of Clause 12.3.2, if the Concessionaire does not
achieve any of the Project Milestones or the Independent Engineer shall have reasonably
determined that the rate of progress of Construction Works is such that the Project is not
likely to be completed by the Scheduled Completion Date, it shall notify the
Concessionaire to this effect, and the Concessionaire shall, within 15 (fifteen) days of
such notice, by a communication inform the Independent Engineer in reasonable detail
about the steps it proposes to take to expedite progress and the period within which it
shall achieve COD.

13.5 Suspension of unsafe Construction Works

13.5.1 Upon recommendation of the Independent Engineer to this effect, the Authority may by
notice require the Concessionaire to suspend forthwith the whole or any part of the
Construction Works if, in the reasonable opinion of the Authority, Such work threatens
the safety of the Users and pedestrians. Provided, however, that in case of an emergency,
the Authority may suomoto issue the notice referred to hereinabove.
13.5.2 The Concessionaire shall, pursuant to the notice under Clause 13.5.1, suspend the
Construction 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 and the Users. The Concessionaire may by notice require the
Independent 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 Independent Engineer, the Authority shall
either revoke such suspension or instruct the Concessionaire 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 13.5 shall be repeated until the suspension
hereunder is revoked.
13.5.3 Subject to the provisions of Clause 28.7, all reasonable costs incurred for maintaining and
protecting the Construction Works or part thereof during the period of suspension (the
“Preservation Costs”) shall be borne by the Concessionaire; 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.
13.5.4 If suspension of Construction Works is for reasons not attributable to the Concessionaire,
the Independent Engineer shall determine any extension of the dates set forth in the
Project Completion Schedule to which the Concessionaire is reasonably entitled, and shall
notify the Authority accordingly whereupon the Authority shall extend such Project
Completion Schedule dates in accordance with the recommendations of the Independent
Engineer.

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13.6 Video recording

The Concessionaire shall carryout video recording of each project every month since
award of work till completion of construction and biannually during O&M period.
Authority has finalized specifications/methodology for video recording and identified
zone–wise agencies & rates for the same. The Concessionaire may use these agencies so
as to ensure uniformity in data collection. Recording shall have to be done in the presence
of Team Leader of Independent Engineer. Recording of previous videos and current
running side by side shall be loaded on Data Lake ([Link] for
easily capturing various developments during the month (a sample screenshot is attached
herewith and also loaded on Data Lake along with a sample video for guidance) before
submission of their invoice. Capturing Ortho-image for approx. 10% equivalent length of
critical structures or any other specific area should be decided by the ROs/ PDs and be
conveyed to the Drone Agency in the site-specific work order. Independent Engineer shall
ensure that the features and quality of drone video is acceptable and video is not
distorted/tampered with.
Independent Engineer shall analyse these drone videos and give their comments in its
digital MPRs covering inter-alia but not limited to the encumbrances/lands not available,
sites of COS demands, progress of project, mobilisation of plant & equipment,
mobilisation of camp sites, progress on rectification of NCRs etc. along with the proposed
action plan. Project Director of NHAI shall cross-check drone videos during the monthly
physical inspections and notify the discrepancies noticed, if any, between drone video, on
Independent Engineer comments and ground reality. The discrepancies shall be examined
and addressed through joint site inspections.
As per the policy, the Network Survey Vehicle (NSV) survey needs to be carried out
twice in a year on completed project. Therefore, PDs should plan biannually drone based
video recording during O&M period in such a manner so that there is no overlap and
digital data of O&M period is available in regular intervals (quarterly) through NSV and
drone videography.
Notwithstanding anything to the contrary contained in this document, the Concessionaire
shall also develop a Project specific website, where Concessionaire needs to upload Video
and time stamp pictures every week regarding progress. The website must be accessible
to the public. In addition, PDs/ ROs can also undertake need based drone videography as
and when required. PD shall ensure development of a project specific website by the
Concessionaire. In case of default on this account, the PD shall withhold an amount
equivalent to Rs. 5 Lacs plus (drone rate X length of project X no. of defaulting week)
from the dues to the Concessionaire.
As the drone videos/ reports will be permanent record on Data Lake and will be used as
evidences during dispute resolution process before Arbitral Tribunals/ Courts including
Supreme Court, the drone video shall be carried out carefully and correctly without
distortions/ tampering by all parties concerned. The amount spent on recording shall be
charged to Concessionaire to the extent covered in the agreement.

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ARTICLE 14
COMPLETION CERTIFICATE
14.1 Tests
14.1.1 No later than 30 (thirty) days prior to the likely completion of the Project, the
Concessionaire shall notify the Independent Engineer of its intent to subject the Project to
Tests. The date and time of each of the Tests shall be determined by the Independent
Engineer in consultation with the Concessionaire, and notified to the Authority who may
designate its representative to witness the Tests. The Concessionaire shall provide such
assistance as the Independent Engineer may reasonably require for conducting the Tests.
In the event of the Concessionaire and the Independent Engineer failing to mutually agree
on the dates for conducting the Tests, the Concessionaire shall fix the dates by not less
than 10 (ten) days’ notice to the Independent Engineer, and in the event the Independent
Engineer delays the Tests hereunder, the Authority shall impose exemplary penalties on
the Independent Engineer and shall ensure that Tests are completed in time either by the
Independent Engineer or any substitute thereof.
14.1.2 All Tests shall be conducted in accordance with Schedule-I at the cost and expense of the
Concessionaire. The Independent Engineer shall observe, monitor and review the results
of the Tests to determine compliance of the Project with Specifications and Standards and
if it is reasonably anticipated or determined by the Independent Engineer during the
course of any Test that the performance of the Project 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 Concessionaire to remedy and rectify the defects or deficiencies. Upon
completion of each Test, the Independent Engineer shall provide to the Concessionaire
and the Authority copies of all Test data including detailed Test results. For the avoidance
of doubt, it is expressly agreed that the Independent Engineer may require the
Concessionaire to carry out or cause to be carried out additional Tests, in accordance with
Good Industry Practice, for determining the compliance of the Project with Specifications
and Standards.

14.2 Completion Certificate

Upon completion of Construction Works and the Independent Engineer determining the
Tests to be successful, it shall forthwith issue to the Concessionaire and the Authority a
certificate substantially in the form set forth in Schedule-J (the “Completion
Certificate”).

14.3 Provisional Certificate

14.3.1 Subject to the provisions of Clause 14.3.2, the Independent Engineer may, at the request
of the Concessionaire, issue a provisional certificate of completion substantially in the
form set forth in Schedule-J (the “Provisional Certificate”) if the Tests are successful
and the Project can be safely and reliably placed in commercial operation though certain
works or things forming part thereof are outstanding and not yet complete. In such an
event, the Provisional Certificate shall have appended thereto a list of outstanding items
signed jointly by the Independent Engineer and the Concessionaire (the “Punch List”);
provided that the Independent Engineer shall not withhold the Provisional Certificate for
reason of any work remaining incomplete if the delay in completion thereof is attributable

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to the Authority; provided further that the Punch List shall also include the cost of
completion for each of the outstanding items.
14.3.2 The Parties hereto expressly agree that a Provisional Certificate under this Clause 14.3
may, upon request of the Concessionaire to this effect, be issued for operating part of the
Project, if the Concessionaire has completed construction of 100% (Hundred per cent) of
the Site made available to the Concessionaire up to 146 days from the Appointed Date.
Upon issue of such Provisional Certificate, the provisions of Article 15 shall apply to
such completed part, and the rights and obligations of the Concessionaire for and in
respect of such completed part of the Project shall be construed accordingly.

14.4 Completion of Punch List items

14.4.1 All items in the Punch List shall be completed by the Concessionaire within 90 (ninety)
days of the date of issue of the Provisional Certificate and for any delay thereafter, other
than for reasons solely attributable to the Authority or due to Force Majeure, the
Authority shall be entitled to recover Damages from the Concessionaire to be calculated
and paid for each day of delay until all items are completed, at the lower of (a) 0.1% (zero
point one per cent) of the Performance Security, and (b) 0.2% (zero point two per cent) of
the cost of completing such items as estimated by the Independent Engineer. Subject to
payment of such Damages, the Concessionaire shall be entitled to a further period not
exceeding 120 (one hundred and twenty) days for completion of the Punch List items. For
the avoidance of doubt, it is agreed that if completion of any item is delayed for reasons
solely attributable to the Authority or due to Force Majeure, the completion date thereof
shall be determined by the Independent Engineer in accordance with Good Industry
Practice, and such completion date shall be deemed to be the date of issue of the
Provisional Certificate for the purposes of Damages, if any, payable for such item under
this Clause 14.4.1.
14.4.2 Upon completion of all Punch List items, the Independent Engineer shall issue the
Completion Certificate. Failure of the Concessionaire to complete all the Punch List items
within the time set forth in Clause 14.4.1 for any reason, other than conditions
constituting Force Majeure or for reasons solely attributable to the Authority, shall entitle
the Authority to terminate this Agreement.

14.5 Withholding of Provisional or Completion Certificate

14.5.1 If the Independent Engineer determines that the Project or any part thereof does not
conform to the provisions of this Agreement and cannot be safely and reliably placed in
commercial operation, it shall forthwith make a report in this behalf and send copies
thereof to the Authority and the Concessionaire. Upon receipt of such a report from the
Independent Engineer and after conducting its own inspection, if the Authority is of the
opinion that the Project is not fit and safe for commercial service, it shall, within 7
(seven) days of receiving the aforesaid report, notify the Concessionaire of the defects
and deficiencies in the Project and direct the Independent Engineer to withhold issuance
of the Provisional Certificate or Completion Certificate, as the case may be. Upon receipt
of such notice, the Concessionaire shall remedy and rectify such defects or deficiencies
and thereupon Tests shall be undertaken in accordance with this Article 14. Such
procedure shall be repeated as necessary until the defects or deficiencies are rectified.
14.5.2 Notwithstanding anything to the contrary contained in Clause 14.5.1, the Authority may,
at any time after receiving a report from the Independent Engineer under that Clause,

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direct the Independent Engineer to issue a Provisional Certificate under Clause 14.3, and
such direction shall be complied forthwith.

14.6 Rescheduling of Tests

If the Independent Engineer certifies to the Authority and the Concessionaire 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 Concessionaire shall be entitled to re-schedule the Tests and
hold the same as soon as reasonably practicable.

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ARTICLE 15
ENTRY INTO COMMERCIAL SERVICE
15.1 Commercial Operation Date (COD)
15.1.1 The Project shall be deemed to be complete when the Completion Certificate or the
Provisional Certificate, as the case may be, is issued under the provisions of Article 14,
and accordingly the commercial operation date of the Project shall be the date on which
such Completion Certificate or the Provisional Certificate is issued (the “COD”). The
Project shall enter into commercial service on COD whereupon the Concessionaire shall
be entitled to demand and collect Annuity Payments in accordance with the provisions of
this Agreement.

15.2 Damages for delay

Subject to the provisions of Clause 12.3, if COD does not occur prior to the 91st (ninety
first) day after the Scheduled Completion Date, unless the delay is on account of reasons
attributable to the Authority or due to Force Majeure, the Concessionaire shall pay
Damages to the Authority in a sum calculated at the rate of 0.2% (zero point two per cent)
of the amount of Performance Security for delay of each day until COD is achieved.
Upon failure of the Concessionaire to pay the said Damages, the same shall be paid
alongwith interest of Bank Rate plus 3% and shall be deducted from the 1st (first) Annuity
Payment. In case the Damages and the interest thereof are more than the 1st Annuity
payment then the balance Damages alongwith interest thereof shall be recovered from any
further amount due and payable to the Concessionaire excluding O&M Payments but
including interest to be paid on reducing balance of the Completion Cost remaining to be
paid along with the 1st Annuity or from further Annuity payments.

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ARTICLE 16
CHANGE OF SCOPE
16.1 Change of Scope
16.1.1 The Authority may, notwithstanding anything to the contrary contained in this
Agreement, require the provision of additional works and services which are not included
in the Scope of the Project as contemplated by this Agreement (the “Change of Scope”).
Any such Change of Scope shall be made in accordance with the provisions of this
Article 16 and the costs thereof shall be expended by the Concessionaire and reimbursed
to it by the Authority in accordance with Clause 16.3.
16.1.2 If the Concessionaire determines at any time that a Change of Scope is necessary for
providing safer and improved services to the Users, it shall by notice in writing require
the Authority to consider such Change of Scope. The Authority shall, within 15 (fifteen)
days of receipt of such notice, either accept such Change of Scope with modifications, if
any, and initiate proceedings therefor in accordance with this Article 16 or inform the
Concessionaire in writing of its reasons for not accepting such Change of Scope, which
decision of the Authority shall be final and binding.
16.1.3 Any works or services which are provided under and in accordance with this Article 16
shall form part of the Project and the provisions of this Agreement shall apply mutatis
mutandis to such works or services.
16.2 Procedure for Change of Scope
16.2.1 In the event of the Authority determining that a Change of Scope is necessary, it shall
issue to the Concessionaire a notice specifying in reasonable detail the works and services
contemplated thereunder (the “Change of Scope Notice”).
16.2.2 Upon receipt of a Change of Scope Notice, the Concessionaire shall, with due diligence,
provide to the Authority such information as is necessary, together with preliminary
Documentation in support of:
(a) 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
(b) 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 a
detailed breakdown by work classifications specifying the material and labour
costs calculated in accordance with the schedule of rates applicable to the works
assigned by the Authority to its contractors, along with the proposed
premium/discount on such rates; provided that the cost incurred by the
Concessionaire in providing such information shall be reimbursed by the
Authority to the extent such cost is certified by the Independent Engineer as
reasonable.
16.2.3 Upon receipt of information set forth in Clause 16.2.2, if the Authority decides to proceed
with the Change of Scope, it shall convey its preferred option to the Concessionaire, and
the Parties shall, with assistance of the Independent Engineer, thereupon make good faith
efforts to agree upon the time and costs for implementation thereof. Upon reaching an

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agreement, the Authority shall issue an order (the “Change of Scope Order”) requiring
the Concessionaire to proceed with the performance thereof. In the event that the Parties
are unable to agree, the Authority may, by issuing a Change of Scope Order, require the
Concessionaire to proceed with the performance thereof pending resolution of the
Dispute, or carry out the works in accordance with Clause 16.5.
16.2.4 The provisions of this Agreement, insofar as they relate to Construction Works and Tests,
shall apply mutatis mutandis to the works undertaken by the Concessionaire under this
Article 16.

16.3 Payment for Change of Scope

Within 7 (seven) days of issuing a Change of Scope Order, the Authority shall make an
advance payment to the Concessionaire in a sum equal to 20% (twenty per cent) of the
cost of Change of Scope as agreed hereunder, and in the event of a Dispute, 20% (twenty
per cent) of the cost assessed by the Independent Engineer. The Concessionaire shall,
after commencement of work, present to the Authority bills for payment in respect of the
works in progress or completed works, as the case may be, supported by such
Documentation as is reasonably sufficient for the Authority to determine the accuracy
thereof. Within 30 (thirty) days of receipt of such bills, the Authority shall disburse to the
Concessionaire such amounts as are certified by the Independent Engineer as reasonable
and after making a proportionate deduction for the advance payment made hereunder, and
in the event of any Dispute, final adjustments thereto shall be made under and in
accordance with the Dispute Resolution Procedure.
16.4 Restrictions on certain works
16.4.1 Notwithstanding anything to the contrary contained in this Article 16, but subject to the
provisions of Clause 16.4.2, the Authority shall not require the Concessionaire to
undertake any works or services if such works or services are likely to delay completion
of the Project by the Scheduled Completion Date; provided that in the event that the
Authority considers such works or services to be essential, it may issue a Change of
Scope Order, subject to the condition that the works forming part of or affected by such
Change of Scope Order shall not be reckoned for purposes of determining completion of
the Project and issuing the Provisional Certificate.
16.4.2 Notwithstanding anything to the contrary contained in this Article 16, the Concessionaire
shall be entitled to nullify any Change of Scope Order if it causes the cumulative costs
relating to all the Change of Scope Orders to exceed 10% (ten per cent) of the Bid
Project Cost in any continuous period of 3 (three) years immediately preceding the date of
such Change of Scope Order or if such cumulative costs exceed 25% (twenty five per
cent) of the Bid Project Cost at any time during the Concession Period.

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16.5 Power of the Authority to undertake works

16.5.1 Notwithstanding anything to the contrary contained in Clauses 16.1.1 and 16.3, the
Authority may, after giving notice to the Concessionaire and considering its reply thereto,
award any works or services, contemplated under Clause 16.1.1, to any person on the
basis of open competitive bidding; provided that the Concessionaire 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 award
of such works or services. For the avoidance of doubt, it is agreed that the Concessionaire
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 per cent) thereof. It
is also agreed that the Concessionaire shall provide access, assistance and cooperation to
the person who undertakes the works or services hereunder.
16.5.2 The works undertaken in accordance with this Clause 16.5 shall conform to the
Specifications and Standards and shall be carried out in a manner that minimizes
disruption in operation of the Project. The provisions of this Agreement, insofar as they
relate to Construction Works and Tests, shall apply mutatis mutandis to the works carried
out under this Clause 16.5.

16.6 Reduction in Scope of the Project

16.6.1 If the Concessionaire shall have failed to complete any Construction Works on account of
Force Majeure or for reasons attributable to the Authority or under the provision of
Clause 10.3.4 of this Agreement, the Authority shall follow the following process for
calculation of total cost of reduced Scope
I. On direction by the Authority, the Independent Engineer to assess the civil cost of
the reduced Scope, as per the schedule of rates applicable on the Bid Due Date.
II. The civil cost of the reduced Scope shall be multiplied by the 1.045 to arrive at
the estimated cost of reduced Scope.
III. The estimated cost of reduced Scope shall then be multiplied by the ratio of Bid
Project Cost to Estimated Project Cost to arrive at the Total Cost of Reduced
Scope.
On or before a Payment Milestone immediately succeeding the date of finalization of
such Reduction in Scope, the Bid Project Cost shall be reduced by the Total Cost of
Reduced Scope and all payments made or to be made to the Concessionaire shall be
suitably adjusted and recoveries, if any, shall be made from the payment to be released on
that Payment Milestone immediately succeeding the date of finalization of Reduction in
Scope.
For the avoidance of doubt, it is agreed that upon the Reduction of Scope and revision of
Bid Project Cost, all references to Bid Project Cost would mean the revised Bid Project
Cost and all the payments would be calculated as per the revised Bid Project Cost.
16.6.2 For determining the obligations of the Concessionaire under this Clause 16.6, the
provisions of Clauses 16.1, 16.2 and 16.4 shall apply mutatis mutandis, and upon issue of
Change of Scope Order by the Authority hereunder, the Concessionaire shall pay
forthwith the sum specified therein.

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16.7 Effect of Change in Scope on the O&M Costs

Pursuant to the provisions if this Article 16, if the Change in Scope leads to a reduction or
increase in the length of the Project Highway, the O&M Payments as provided in Clause
23.7 shall be reduced or increased in proportion to the reduction or increase in the length
of the Project Highway.

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ARTICLE 17
OPERATION AND MAINTENANCE
17.1 O&M obligations of the Concessionaire
17.1.1 During the Operation Period, the Concessionaire shall operate and maintain the Project in
accordance with this Agreement either by itself, or through the O&M Contractor and if
required, modify, repair or otherwise make improvements to the Project to comply with
the provisions of this Agreement, Applicable Laws and Applicable Permits, and conform
to Specifications and Standards and Good Industry Practice. The obligations of the
Concessionaire hereunder shall include:
(a) Procuring and ensuring safe, smooth and uninterrupted use of the Project,
including prevention of loss or damage thereto, during normal operating
conditions;
(b) Minimizing disruption in the event of accidents or other incidents affecting the
safety and use of the Project by providing a rapid and effective response and
maintaining liaison with emergency services of the State;
(c) Carrying out periodic preventive maintenance of the Project;
(d) undertaking routine maintenance including prompt repairs of potholes, cracks,
joints, drains, embankments, structures, markings, lighting, signage and other
control devices;
(e) Undertaking major maintenance such as resurfacing, repairs to structures, and
repairs and refurbishment of system and equipment;
(f) Preventing, with the assistance of concerned law enforcement agencies, any
unauthorized use of the Project;
(g) Preventing, with the assistance of the concerned law enforcement agencies, any
encroachments on, or unauthorized entry to the Project;
(h) Protection of the environment and provision of equipment and materials thereof;
(i) operation and maintenance of all communication, control and administrative
systems necessary for the efficient operation of the Project and for providing safe,
smooth and uninterrupted use of the Project;
[(j) [Deleted]
(k) Maintaining a public relations unit to interface with and attend to suggestions
from the Users, government agencies, media and other agencies; and
(l) Complying with Safety Requirements in accordance with Article 18.
17.1.2 The Concessionaire shall remove promptly from the Project all surplus construction
machinery and materials, waste materials (including hazardous materials and waste
water), rubbish and other debris (including, without limitation, accident debris) and keep
the Project in a clean, tidy and orderly condition, and in conformity with Applicable
Laws, Applicable Permits and Good Industry Practice. For the avoidance of doubt, it is

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agreed that the debris and material excavated shall be carried to and deposited at location
identified by the Authority and/or Independent Engineer.
17.1.3 The Concessionaire shall maintain, in conformity with Good Industry Practice, all
stretches of approach roads.
17.2 Maintenance Requirements
The Concessionaire shall procure that at all times during the Operation Period; the Project
conforms to the maintenance requirements set forth in Schedule-K (the “Maintenance
Requirements”).
17.3 Maintenance Manual
17.3.1 No later than 90 (ninety) days prior to the Scheduled Completion Date, the
Concessionaire shall, in consultation with the Independent Engineer, evolve a repair and
maintenance manual (the “Maintenance Manual”) for the regular and preventive
maintenance of the Project in conformity with the Specifications and Standards,
Maintenance Requirements, Safety Requirements and Good Industry Practice, and shall
provide 5 (five) copies thereof to the Authority and 2 (two) copies to the Independent
Engineer. The Maintenance Manual shall be revised and updated once every 3 (three)
years and the provisions of this Clause shall apply, mutatis mutandis, to such revision.
17.3.2 Without prejudice to the provision of Clause 17.3.1, the Maintenance Manual shall, in
particular, include provisions for maintenance of Project Assets and shall provide for life
cycle maintenance, routine maintenance and reactive maintenance which may be reasonably
necessary for maintenance and repair of The Project Assets, including replacement thereof,
such that their overall condition conforms to Good Industry Practice.
17.4 Maintenance Program
17.4.1 On or before COD and no later than 45 (forty five) days prior to the beginning of each
Accounting Year during the Operation Period, as the case may be, the Concessionaire
shall provide to the Authority and the Independent Engineer, its proposed annual program
of preventive, urgent and other scheduled maintenance (the “Maintenance Program”) to
comply with the Maintenance Requirements, Maintenance Manual and Safety
Requirements. Such Maintenance Program shall include:
(a) preventive maintenance schedule;
(b) arrangements and procedures for carrying out urgent repairs;
(c) Criteria to be adopted for deciding maintenance needs;
(d) Intervals and procedures for carrying out inspection of all elements of the Project;
(e) Intervals at which the Concessionaire shall carry out periodic maintenance;
(f) Arrangements and procedures for carrying out safety related measures; and
(g) Intervals for major maintenance works and the scope thereof.
17.4.2 Within 15 (fifteen) days of receipt of the Maintenance Program, the Independent
Engineer shall review the same and convey its comments to the Concessionaire with
particular reference to its conformity with the Maintenance Requirements, Maintenance
Manual and Safety Requirements.

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17.4.3 The Concessionaire may modify the Maintenance Program as may be reasonable in the
circumstances, and the procedure specified in Clauses 17.4.1 and 17.4.2 shall apply
mutatis mutandis to such modifications.
17.5 Safety, breakdowns and accidents
17.5.1 The Concessionaire shall ensure safe conditions for the Users, and in the event of unsafe
conditions, closures, diversions, breakdowns and accidents, it shall follow the relevant
operating procedures including the setting up of temporary Lights and 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.
17.5.2 The Concessionaire’s responsibility for rescue operations on the Project shall be limited
to an initial response to any particular incident until such time as the competent authority
takes charge and shall include prompt removal of vehicles or debris or any other
obstruction, which may endanger or interrupt the use of the Project. For this purpose, it
shall maintain and operate a round-the-clock rescue post with equipment in accordance
with Good Industry Practice.

17.6 De-commissioning due to Emergency

17.6.1 If, in the reasonable opinion of the Concessionaire, there exists an Emergency which warrants
de-commissioning and closure of the whole or any part of the Project, the Concessionaire
shall be entitled to de-commission and close the whole or any part of the Project for so long as
such Emergency and the consequences thereof warrant; provided that such de-commissioning
and particulars thereof shall be notified by the Concessionaire to the Authority Without any
delay, and the Concessionaire shall diligently carry out and abide by any reasonable directions
that the Authority may give for dealing with such Emergency.
17.6.2 The Concessionaire shall re-commission the Project or the affected part thereof as quickly
as practicable after the circumstances leading to its de-commissioning and closure have
ceased to exist or have so abated as to enable the Concessionaire to re-commission the
Project and shall notify the Authority of the same without any delay.
17.6.3 Any decommissioning or closure of any part of the Project and the re- commissioning
thereof shall, as soon as practicable, be brought to the notice of affected persons by means
of public announcements/notice.
17.7 Project closure
17.7.1 Save and except as provided in Clause 17.6, the Concessionaire shall not close any part of
the Project for undertaking maintenance or repair works not forming part of the
Maintenance Program, except with the prior written approval of the Independent
Engineer. Such approval shall be sought by the Concessionaire through a written request
to be made to the Independent Engineer, and a copy thereof furnished to the Authority, at
least 7 (seven) days before the proposed closure and shall be accompanied by particulars
thereof. Within 3 (three) days of receiving such request, the Independent Engineer shall
grant permission with such modifications as it may deem reasonable and necessary in
conformity with the Maintenance Manual and Maintenance Program and a copy of such
permission shall be sent to the Authority.
17.7.2 The provisions of Clause 17.7.1 shall not apply to de-commissioning under Clause 17.6.1
or to any closure for a period not exceeding 2 (two) hours in a day at any time of the day

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and 6 (six) hours in a day at a time specified by the Independent Engineer as off-peak
hours when usage of the Project is comparatively lower.
17.7.3 Upon receiving the permission pursuant to Clause 17.7.1, the Concessionaire shall be entitled
to close the designated part of the Project for the period specified therein, and in the event of
any delay in re-opening such part, the Concessionaire shall pay Damages to the Authority
calculated at the rate of 0.5 % (zero point Five per cent) of the Performance Security, for each
day of delay until that part of the Project has been re-opened for use.

17.8 Damages for breach of maintenance obligations

17.8.1 In the event that the Concessionaire fails to repair or rectify any defect or deficiency set
forth in the Maintenance Requirements within the period specified therein, it shall be
deemed to be in breach of this Agreement and the Authority shall be entitled to recover
Damages, to be calculated and paid for each day of delay until the breach is cured, at the
higher of (a) 2% (two per cent) of the Performance Security, and (b) 0.1% (zero point one
per cent) of the cost of such repair or rectification as estimated by the Independent
Engineer. Recovery of such Damages shall be without prejudice to the rights of the
Authority under this Agreement, including the right of Termination thereof.
17.8.2 The Damages set forth in Clause 17.8.1 may be assessed and specified forthwith by the
Independent Engineer; provided that the Authority may, in its discretion, demand a
smaller sum as Damages, if in its opinion, the breach has been cured promptly and the
Concessionaire is otherwise in compliance with its obligations hereunder. The
Concessionaire shall pay such Damages forthwith and in the event that it contests such
Damages, the Dispute Resolution Procedure shall apply.
17.9 Authority’s right to take remedial measures
17.9.1 In the event the Concessionaire does not maintain and/or repair the Project or any part thereof
in conformity with the Maintenance Requirements, the Maintenance Manual or the
Maintenance Program, as the case may be, and fails to commence remedial works within 15
(fifteen) days of receipt of the O&M Inspection Report or a notice in this behalf from the
Authority or the Independent 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 risk and cost of the Concessionaire, and to recover its
cost from the Concessionaire. In addition to recovery of the aforesaid cost, a sum equal to
20% (twenty per cent) of such cost shall be paid by the Concessionaire to the Authority as
Damages. For the avoidance of doubt, the right of the Authority under this Clause 17.9.1 shall
be without prejudice to its rights and remedies provided under Clause 17.8.
17.9.2 The Authority shall have the right, and the Concessionaire hereby expressly grants to the
Authority the right, to recover the costs and Damages specified in Clause 17.9.1 directly from
the Escrow Account as if such costs and Damages were O&M Expenses, and for that purpose,
the Concessionaire hereby agrees to give irrevocable instructions to the Escrow Bank to make
payment from the Escrow Account in accordance with the instructions of the Authority under
this Clause 17.9.2 and debit the same to O&M Expenses.

17.10 Overriding powers of the Authority

17.10.1 If in the reasonable opinion of the Authority, the Concessionaire 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, the

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Authority may, without prejudice to any of its rights under this Agreement including
Termination thereof, by notice require the Concessionaire to take reasonable measures
immediately for rectifying or removing such hardship or danger, as the case may be.
17.10.2 In the event that the Concessionaire, upon notice under Clause 17.10.1, fails to rectify or
remove any hardship or danger within a reasonable period, the Authority may exercise
overriding powers under this Clause 17.10.2 and take over the performance of any or all
the obligations of the Concessionaire 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 deemed to be O&M
Expenses, and the Authority shall be entitled to recover them from the Concessionaire in
accordance with the provisions of Clause 17.9 along with the Damages specified therein.
17.10.3 In the event of a national emergency, civil commotion or any other act specified in Clause
28.3, the Authority may take over the performance of any or all the obligations of the
Concessionaire to the extent deemed necessary by it, and exercise such control over the
Project or give such directions to the Concessionaire 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 28. It is also agreed that the Concessionaire shall comply
with such instructions as the Authority may issue in pursuance of the provisions of this
Clause 17.10, and shall provide assistance and cooperation to the Authority, on a best
effort basis, for performance of its obligations hereunder.

17.11 Restoration of loss or damage to the Project

Save and except as otherwise expressly provided in this Agreement, in the event that the
Project or any part thereof suffers any loss or damage during the Concession Period from
any cause whatsoever, the Concessionaire shall, at its cost and expense, rectify and
remedy such loss or damage forthwith so that the Project conforms to the provisions of
this Agreement.

17.12 Modifications to the Project

The Concessionaire shall not carry out any material modifications to the Project, save and
except where such modifications are necessary for the Project to operate in conformity
with the Specifications and Standards, Maintenance Requirements, Good Industry
Practice and Applicable Laws; provided that the Concessionaire shall notify the
Independent Engineer of the proposed modifications along with particulars thereof at
least 15 (fifteen) days before commencing work on such modifications and shall
reasonably consider any suggestions that the Independent Engineer may make within 15
(fifteen) days of receiving the Concessionaire’s proposal. For the avoidance of doubt, all
modifications made hereunder shall comply with the Safety Requirements, Specifications
and Standards, Applicable Laws and the provisions of this Agreement.

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17.13 Excuse from performance of obligations

The Concessionaire shall not be considered in breach of its obligations under this
Agreement if any part of the Project is not available to Users on account of any of the
following for the duration thereof:
(a) an event of Force Majeure;
(b) measures taken to ensure the safe use of the Project except when unsafe
conditions occurred because of failure of the Concessionaire to perform its
obligations under this Agreement; or
(c) compliance with a request from the Authority or the directions of any Government
Instrumentality, the effect of which is to close all or any part of the Project:
Provided, that any such non-availability and particulars thereof shall be notified by the
Concessionaire to the Authority and the Independent Engineer without any delay;
Provided further that the Concessionaire shall keep all unaffected parts of the Project
open to Users, provided they can be operated safely.

17.14 Deleted
17.15 Installation and operation of CCTV
The Concessionaire shall install and operate a closed circuit television system to monitor
such parts of the Project as may be necessary and expedient for a safe, secure and smooth
operation thereof.

17.16 Advertising on the Site

The Concessionaire shall not undertake or permit any form of commercial advertising,
display or hoarding at any place on the Site.

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ARTICLE 18
SAFETY REQUIREMENTS
18.1 Safety Requirements
18.1.1 The Concessionaire shall comply with the provisions of this Agreement, Applicable Laws
and Applicable Permits and conform to Good Industry Practice for securing the safety of
the Users. In particular, the Concessionaire shall develop, implement and administer a
surveillance and safety program for providing a safe environment on or about the Project,
and shall comply with the safety requirements set forth in Schedule-L (the “Safety
Requirements”).
18.1.2 The Authority shall appoint an experienced and qualified firm or organization (the
“Safety Consultant”) for carrying out safety audit of the Project in accordance with the
Safety Requirements, and shall take all other actions necessary for securing compliance
with the Safety Requirements.

18.2 Expenditure on Safety Requirements

All costs and expenses arising out of or relating to Safety Requirements shall be borne by
the Concessionaire to the extent such costs and expenses form part of the works and
services included in the Scope of the Project, and works and services, if any, not forming
part of the Scope of the Project shall be undertaken and funded in accordance with the
provisions of Article 16.

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ARTICLE 19
MONITORING OF OPERATION AND MAINTENANCE
19.1 Monthly status reports
19.1.1 During the Operation Period, the Concessionaire shall, no later than 7 (seven) days after
the close of each month, furnish to the Authority and the Independent Engineer a monthly
report stating in reasonable detail the condition of the Project including its compliance or
otherwise with the Maintenance Requirements, Maintenance Manual, Maintenance
Program and Safety Requirements, and shall promptly give such other relevant
information as may be required by the Independent Engineer or the Authority. In
particular, such report shall separately identify and state in reasonable detail the defects
and deficiencies that require rectification.
19.1.2 During the Operation Period, the Concessionaire shall, no later than 10 (ten) days after
the close of each month, furnish a monthly management report which shall include a
summary of:
(a) key performance indicators achieved in the month, along with an analysis of
reasons for failures, if any, and proposals to remedy the same;
(b) key operational hurdles and deliverables in the succeeding month along with
strategies for addressing the same and for otherwise improving the Project’s
operational performance; and
(c) key financial parameters for the month, as benchmarked against the monthly
budget and the reasons for shortfall, if any, and proposals to remedy the same.
19.2 Inspection
The Independent Engineer shall inspect the Project at least once a month. It shall make a
report of such inspection (the “O&M Inspection Report”) stating in reasonable detail
the defects or deficiencies, if any, with particular reference to the Maintenance
Requirements, Maintenance Manual, the Maintenance Program and Safety Requirements,
and send a copy thereof to the Authority and the Concessionaire within 7 (seven) days of
such inspection.

19.3 Tests
For determining that the Project conforms to the Maintenance Requirements, the
Independent Engineer shall require the Concessionaire to carry out, or cause to be carried
out, tests specified by it in accordance with Good Industry Practice. The Concessionaire
shall, with due diligence, carry out or cause to be carried out all such tests in accordance
with the instructions of the Independent Engineer and furnish the results of such tests
forthwith to the Independent Engineer. One half of the costs incurred on such tests, and to
the extent certified by the Independent Engineer as reasonable, shall be reimbursed by the
Authority to the Concessionaire.

19.4 Remedial measures

19.4.1 The Concessionaire shall repair or rectify the defects or deficiencies, if any, set forth in
the O&M Inspection Report or in the test results referred to in Clause and furnish a report
in respect thereof to the Independent Engineer and the Authority within 15 (fifteen) days

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of receiving the O&M Inspection Report or the test results, as the case may be; provided
that where the remedying of such defects or deficiencies is likely to take more than 15
(fifteen) days, the Concessionaire shall submit progress reports of the repair works once
every week until such works are completed in conformity with this Agreement.
19.4.2 The Independent Engineer shall require the Concessionaire to carry out or cause to be
carried out tests, at its own cost, to determine that such remedial measures have brought
the Project into compliance with the Maintenance Requirements and the procedure set
forth in this Clause 19.4 shall be repeated until the Project conforms to the Maintenance
Requirements. In the event that remedial measures are not completed by the
Concessionaire in conformity with the provisions of this Agreement, the Authority shall
be entitled to recover Damages from the Concessionaire under and in accordance with the
provisions of Clause 17.8.

19.5 Reports of unusual occurrence

The Concessionaire shall, prior to the close of each day, send to the Authority and the
Independent Engineer, by facsimile or e-mail, a report stating accidents and unusual
occurrences on the Project relating to the safety and security of the Users and the Project.
A weekly and monthly summary of such reports shall also be sent within 3 (three) days of
the closing of each week and month, as the case may be. For the purposes of this Clause
19.5, accidents and unusual occurrences on the Project shall include:
(a) Death or injury to any person;
(b) Damaged or dislodged fixed equipment;
(c) Any damage or obstruction on the Project, which results in slow down of the
services being provided by the Concessionaire;
(d) Disablement of any equipment during operation;
(e) Communication failure affecting the operation of the Project;
(f) Smoke or fire;
(g) Flooding of the Project; and
(h) Such other relevant information as may be required by the Authority or the
Independent Engineer.

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ARTICLE 20
REGULATION AND MANAGEMENT
20.1 Traffic regulation by the Concessionaire
The Concessionaire shall regulate traffic on the Project in accordance with Applicable
Laws, and subject to the supervision and control of the State authorities or a substitute
thereof empowered in this behalf under Applicable Laws.

20.2 Police assistance

For regulating the use of Project in accordance with Applicable Laws and this Agreement,
the Authority shall assist the Concessionaire in procuring police assistance from the State
Police Department or a substitute thereof. The police assistance shall include setting up of
a traffic aid post (the “Traffic Aid Post”) at each of the Toll Plazas with a mobile Police
squad for round-the-clock patrolling of the Project.

20.3 Buildings for Traffic Aid Posts

The Concessionaire shall, in accordance with the type designs prescribed for such police
outpost buildings by the State Government or a substitute thereof, construct at its own
cost and expense, buildings not exceeding 25 (twenty five) square metres of plinth area,
for each of the Traffic Aid Posts, and hand them over to the Authority no later than 60
(sixty) days prior to the Scheduled Completion Date. The Traffic Aid Post[s] shall be
deemed to be part of the Site and shall vest in the Authority.

20.4 Medical Aid Posts

For providing emergency medical aid during- the Operation Period, as set forth in this
Agreement, the Concessionaire shall assist the State Government or a substitute thereof to
be designated by the Authority in setting up and operating a medical aid post (the
“Medical Aid Post”) at the Site for victims of accidents on the Project at each of the Toll
Plazas with round-the-clock ambulance services for victims of accidents on the Project
Highway.

20.5 Buildings for Medical Aid Posts

The Concessionaire shall, at its cost and in accordance with the type designs prescribed
for such buildings by the State Medical Department (or a substitute thereof to be
designated by the Authority), construct an aid post building and 2 (two) residential
quarters, and hand them over to the Authority, no later than 30 (thirty) days prior to
Scheduled Completion Date. The Medical Aid Post(s) shall be deemed to be part of the
Site and shall vest in the Authority.

20.6 Computer systems and network

The Concessionaire shall install, operate and maintain a computer system with round-the-
clock connections to the networks of the Authority and other related entities for exchange
of data and information useful or necessary for efficient and transparent regulation and
management of traffic. For this purpose, it shall follow such protocol for Electronic Data
Interchange (the “EDI”) as the Authority may specify.

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20.7 Recurring expenditure on Police assistance

On or before the Scheduled Four Laning Date, the Concessionaire shall provide to the
State Police Department or a substitute thereof one Jeep or similar vehicle in good
working condition along with chauffeurs for round-the-clock patrolling as set forth in
Clause 20.2 and shall meet the operating costs of such vehicle including the salaries and
allowances of the chauffeurs.

20.8 Recurring expenditure on Medical Aid Posts

On or before COD, the Concessionaire shall provide to the State Medical Department or a
substitute thereof to be designated by the Authority one ambulance in good working
condition along with chauffeurs for round-the-clock ambulance services as set forth in
Clause 20.4 and meet the operating costs of such ambulance including the salaries and
allowances of the chauffeurs. The Concessionaire shall also reimburse to the State
Medical Department (or a substitute thereof to be designated by the Authority) the actual
expenditure incurred by it in each Accounting Year on the medical equipment, and the
pay and allowances of up to 2 (two) medical personnel deployed exclusively for the
Medical Aid Posts and ambulance, and shall maintain the Medical Aid Post buildings in
accordance with Good Industry Practice. For the avoidance of doubt, it is agreed that the
Concessionaire shall not be liable for any other expenditure incurred by the State Medical
Department or a substitute thereof to be designated by the Authority.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

ARTICLE 21
INDEPENDENT ENGINEER
21.1 Appointment of Independent Engineer
The Authority shall appoint a consulting engineering firm substantially in accordance
with the selection criteria set forth in Schedule-M, to be the independent consultant under
this Agreement (the “Independent Engineer”). The appointment shall be made no later
than 60 (sixty) days from the date of this Agreement and shall be for a period of
Construction Period plus six (6) months).On expiry or termination of the aforesaid
appointment, the Authority shall appoint an Independent Engineer for a further term of 3
(three) years in accordance with the provisions of Schedule-M, and such procedure shall
be repeated after expiry of each appointment.

21.2 Duties and functions

21.2.1 The Independent Engineer shall discharge its duties and functions substantially in
accordance with the terms of reference set forth in Schedule-N.
21.2.2 The Independent Engineer shall submit regular periodic reports (at least once every
month) to the Authority in respect of its duties and functions set forth in Schedule-N.
21.2.3 A true copy of all communications sent by the Authority to the Independent Engineer and
by the Independent Engineer to the Authority shall be sent forthwith by the Independent
Engineer to the Concessionaire.
21.2.4 A true copy of all communications sent by the Independent Engineer to the
Concessionaire and by the Concessionaire to the Independent Engineer shall be sent
forthwith by the Independent Engineer to the Authority.

21.3 Remuneration
The remuneration, cost and expenses of the Independent Engineer shall be paid by the
Authority and subject to the limits set forth in Schedule-M, one-half of such
remuneration, cost and expenses shall be reimbursed by the Concessionaire to the
Authority within 15 (fifteen) days of receiving a statement of expenditure from the
Authority.

21.4 Termination of appointment

21.4.1 The Authority may, in its discretion, terminate the appointment of the Independent
Engineer at any time, but only after appointment of another Independent Engineer in
accordance with Clause 21.1.
21.4.2 If the Concessionaire has reason to believe that the Independent Engineer is not
discharging its duties and functions in a fair, efficient and diligent manner, it may make a
written representation to the Authority and seek termination of the appointment of the
Independent Engineer. Upon receipt of such representation, the Authority shall hold a
tripartite meeting with the Concessionaire and Independent Engineer for an amicable
resolution of the Dispute, and if any difference or disagreement between the Authority
and the Concessionaire remains unresolved, the Dispute shall be settled in accordance
with the Dispute Resolution Procedure. In the event that the appointment of the

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

Independent Engineer is terminated hereunder, the Authority shall appoint forthwith

another Independent Engineer in accordance with Clause 21.1.

21.5 Authorized signatories

The Authority shall require the Independent Engineer to designate and notify to the
Authority and the Concessionaire up to 2 (two) persons employed in its firm to sign for
and on behalf of the Independent Engineer, and any communication or document required
to be signed by the Independent Engineer shall be valid and effective only if signed by
any of the designated persons; provided that the Independent Engineer may, by notice in
writing, substitute any of the designated persons by any of its employees.

21.6 Dispute resolution

If either Party disputes any advice, instruction, decision, direction or award of the
Independent Engineer, or, as the case may be, the assertion or failure to assert
jurisdiction, the Dispute shall be resolved in accordance with the Dispute Resolution
Procedure.

21.7 Interim arrangement

In the event that the Authority does not appoint an Independent Engineer, or the
Independent Engineer so appointed has relinquished its functions or defaulted in
discharge thereof, the Authority may, in the interim, designate and authorize any person
to discharge the functions of the Independent Engineer in accordance with the provisions
of this Agreement, save and except that such person shall not exercise any functions
relating to review, comment, approval or inspection as specified in this Agreement for
and in respect of the Independent Engineer, and such functions shall be discharged as and
when an Independent Engineer is appointed in accordance with the provisions of this
Agreement. Provided, however, that nothing contained in this Clause 21.7 shall in any
manner restrict the rights of the Authority to enforce compliance of the provisions of this
Agreement.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

Part IV
Financial Covenants

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

ARTICLE 22
FINANCIAL CLOSE
22.1 Financial Close
22.1.1 The Concessionaire hereby agrees and undertakes that it shall achieve Financial Close for an
amount not lower than either:
i. Total Project Cost; or
ii. 10% less than (Estimated Project Cost minus 40% of Bid Project Cost)

within 150 (one hundred and fifty) days from the date of this Agreement. In the event of delay
in achieving the Financial Close, the Concessionaire shall be entitled to a further period not
exceeding 120 (one hundred twenty) days, subject to payment of Damages to the Authority in
a sum calculated at the rate of 0.05% (zero point zero five per cent)of the Performance
Security for each day of delay, provided that the Damages specified herein shall be payable
every week in advance and the period beyond the said 150 (one hundred and fifty) days shall
be granted only to the extent of Damages so paid. In the event of delay in achieving the
Financial Close beyond 270 (two hundred and seventy) days from the date of this Agreement,
the Concessionaire shall be entitled to a further period not exceeding 95 (ninety five) days,
subject to payment of Damages to the Authority in a sum calculated at the rate of 0.1% (zero
point one per cent) of the Performance Security for each day of delay, provided that the
Damages specified herein shall be payable every week in advance and the period beyond the
said 270 (two hundred and seventy) days shall be granted only to the extent of Damages so
paid; provided further that no Damages shall be payable if such delay in Financial Close has
occurred due to Force Majeure. For the avoidance of doubt, the Damages payable hereunder
by the Concessionaire shall be in addition to the Damages, if any, due and payable under the
provisions of Clause 4.3.
22.1.2 The Concessionaire shall, upon occurrence of Financial Close, notify the Authority
forthwith, and shall have provided to the Authority, at least 2 (two) days prior to the
Financial Close, 3 (three) true copies of the Financial Package and the Financial Model,
duly attested by a Director of the Concessionaire, along with 3 (three) soft copies of the
Financial Model in MS Excel version or any substitute thereof, which is acceptable to the
Senior Lenders.

22.2 Termination due to failure to achieve Financial Close

22.2.1 Notwithstanding anything to the contrary contained in this Agreement, but subject to
Clause 28.6.1, in the event that Financial Close does not occur, for any reason
whatsoever, within the period set forth in Clause 22.1.1 or the extended period provided
thereunder, all rights, privileges, claims and entitlements of the Concessionaire under or
arising out of this Agreement shall be deemed to have been waived by, and to have
ceased with the concurrence of the Concessionaire, and the Concession Agreement shall
be deemed to have been terminated by mutual agreement of the Parties.
22.2.2 Upon Termination under Clause 22.2.1, the Authority shall be entitled to suspend the
bidder for participation in the tendering process for the works of
MoRTH/NHAI/NHIDCL and works under other Centrally Sponsored Schemes for a
period of One Year from the bid due date of this work provided, however, that if
Financial Close has not occurred due to Force Majeure, it shall, upon Termination, not

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 78
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suspend the bidder for participation in the tendering process for the works of
MoRTH/NHAI/NHIDCL and works under other Centrally Sponsored Schemes for a
period of One Year from the bid due date of this work or release the Performance
Security, as the case may be. For the avoidance of doubt, it is expressly agreed that if the
Performance Security has been submitted by the Concessionaire, the Authority shall be
entitled to encash there from an amount equal to the 1% of Estimated Project Cost
mentioned in the RFP and appropriate the proceeds thereof as Damages.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

ARTICLE 23
PAYMENT OF BID PROJECT COST
23.1 Bid Project Cost
The Parties expressly agree that the cost of construction of the Project, as on the Bid Date,
which is due and payable by the Authority to the Concessionaire, shall be deemed to be
Rs…………(Rupees………….) (The “ Bid Project Cost ”)£. The Parties further agree that
the Bid Project Cost specified hereinabove for payment to the Concessionaire shall be
inclusive of the cost of construction, interest during construction, working capital, physical
contingencies and all other costs, expenses and charges for and in respect of construction of
the Project, save and except any additional costs arising on account of variation in Price
Index, Change of Scope, Change in Law, Force Majeure or breach of this Agreement, which
costs shall be due and payable to the Concessionaire in accordance with the provisions of the
Agreement. The Bid Project Cost shall be exclusive of GST, which shall be paid to the
Concessionaire by the Authority at the applicable rates. For the avoidance of doubt, the Bid
Project Cost specified herein represents the amount due and payable by the Authority to the
Concessionaire and may be less than, equal to, or more than the Estimated Project Cost.

23.2 Adjusted Bid Project Cost

23.2.1 The Bid Project Cost specified in Clause 23.1 shall be revised from time to time in
accordance with the provisions of this Clause 23.2 to reflect the variation in Price Index
occurring after the Reference Index Date immediately preceding the Bid Date.
23.2.2 The Bid Project Cost adjusted for variation between the Price Index occurring between
the Reference Index Date preceding the Bid Date and the Reference Index Date
immediately preceding the Appointed Date shall be deemed to be the Bid Project Cost at
commencement of construction.
23.2.3 For every month occurring after the Appointed Date, the Authority shall compute the
variation in Price Index occurring between the Reference Index Date preceding the Bid
Date and the Reference Index Date preceding the date of Invoice, and shall express the
latter as a multiple of the former (the “Price Index Multiple”). All Invoices to be
submitted by the Concessionaire to the Authority for and in respect of the Construction
Period shall be the product of the relevant proportion of the Bid Project Cost and the Price
Index Multiple applicable on the date of Invoice. For the avoidance of doubt and by way
of illustration, if (a) the Price Index on the Reference Index Date preceding the Bid Date,
say January 31, 2016, is 200 (two hundred); (b) the Invoice is submitted on October 15,
2017; and (c) the Price Index as on September 30, 2017 is 210 (two hundred and ten),
then the Price Index Multiple for determination of the amount due in respect of such
Invoice shall be 1.05 (one point zero five).

23.3 Payment of Bid Project Cost

23.3.1 40% (forty per cent) of the Bid Project Cost , adjusted for the Price Index Multiple, shall be
due and payable to the Concessionaire in 10 (Ten) equal installments of 4% (four per cent)
each during the Construction Period in accordance with the provisions of Clause 23.4.

£
Bid Project Cost shall be the amount specified in the Bid of the selected Bidder.

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23.3.2 The remaining Bid Project Cost, adjusted for the Price Index Multiple, shall be due and
payable in 30 (thirty)biannual installments commencing from the 180th (one hundred and
eightieth) day of COD in accordance with the provisions of Clause 23.6.

23.4 Payment during Construction Period

Upon receiving a report from the Independent Engineer certifying the achievement of the
below mentioned Payment Milestones4, the Authority shall disburse, within 15 (fifteen)
days of the receipt of each such report, an installment equal to 4% (four per cent) of the
Bid Project Cost, adjusted for the Price Index Multiple as applicable on the Reference
Index Date preceding the date of that report.
For the purpose of this Clause 23.4, the Payment Milestone for release of payment during
Construction Period shall be as under:
a) I (first) Payment Milestone – On achievement of 5% Physical Progress
b) II (second) Payment Milestone – On achievement of 10% Physical Progress
c) III (third) Payment Milestone – On achievement of 20% Physical Progress
d) IV (fourth) Payment Milestone – On achievement of 30% Physical Progress
e) V (fifth) Payment Milestone – On achievement of 40% Physical Progress
f) VI (sixth) Payment Milestone – On achievement of 50% Physical Progress
g) VII (seventh) Payment Milestone – On achievement of 60% Physical Progress
h) VIII (eighth) Payment Milestone – On achievement of 70% Physical Progress
i) IX (ninth) Payment Milestone – On achievement of 80% Physical Progress
j) X (tenth) Payment Milestone – On achievement of 90% Physical Progress
Provided that in case of Change of Scope, the Physical Progress shall be recalculated to
account for the changed scope.

23.5 Bonus on early completion

In the event that the Concessionaire shall achieve COD on or more than 30 (thirty) days
prior to the Scheduled Completion Date, the Authority shall pay to the Concessionaire a
bonus equal to 0.5% (Zero point five per cent) of 60 % (Sixty per cent) of the Bid Project
Cost for the first30 (thirty) days by which COD shall precede the Scheduled Completion
Date and thereafter the said bonus shall be calculated on the pro-rata basis for each day
preceding the said 30 (thirty) days period. The Bonus shall be due and payable to the
Concessionaire alongwith the 1st (first) Annuity Payment.

23.6 Annuity Payments during Operation Period

23.6.1 The (the “Completion Cost” shall be the summation of A, B, C, D, E, F, G, H, I, J and K
below:
A. 5% of the Bid Project Cost adjusted for the Price Index Multiple as applicable on
the Reference Index Date preceding the date of report confirming 5% Physical
Progress.

4
Independent Engineer, during finalization of design, shall upfront decide weightages of all the items in
due consultation with the Authority responsible for making payments and recommended percentage
physical progress achievements based on the above decided weightages for the entire construction
period. The weightages shall be fixed as per format in Annexure – I of Schedule G of this Agreement.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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B. Another 5% of the Bid Project Cost adjusted for the Price Index Multiple as
applicable on the Reference Index Date preceding the date of report confirming
10% Physical Progress.
C. Another 10% of the Bid Project Cost adjusted for the Price Index Multiple as
applicable on the Reference Index Date preceding the date of report confirming
20% Physical Progress.
D. Another 10% of the Bid Project Cost adjusted for the Price Index Multiple as
applicable on the Reference Index Date preceding the date of report confirming
30% Physical Progress.
E. Another 10% of the Bid Project Cost adjusted for the Price Index Multiple as
applicable on the Reference Index Date preceding the date of report confirming
40% Physical Progress.
F. Another 10% of the Bid Project Cost adjusted for the Price Index Multiple as
applicable on the Reference Index Date preceding the date of report confirming
50% Physical Progress.
G. Another 10% of the Bid Project Cost adjusted for the Price Index Multiple as
applicable on the Reference Index Date preceding the date of report confirming
60% Physical Progress.
H. Another 10% of the Bid Project Cost adjusted for the Price Index Multiple as
applicable on the Reference Index Date preceding the date of report confirming
70% Physical Progress.
I. Another 10% of the Bid Project Cost adjusted for the Price Index Multiple as
applicable on the Reference Index Date preceding the date of report confirming
80% Physical Progress.
J. Another 10% of the Bid Project Cost adjusted for the Price Index Multiple as
applicable on the Reference Index Date preceding the date of report confirming
90% Physical Progress
K. Another 10% of the Bid Project Cost adjusted for the Price Index Multiple as
applicable on the Reference Index Date preceding the COD.

The Parties acknowledge and agree that the Authority has paid a portion of the
Completion Cost as payments during Construction Period pursuant to Clause 23.4 of this
Agreement. The balance Completion Cost remaining shall be due and payable during the
Operation Period in accordance with the provisions of Clause 23.6.2.
23.6.2 The Completion Cost remaining to be paid in pursuance of the provisions of Clause
23.6.1 shall be due and payable in biannual installments over a period of 15 (fifteen)
years commencing from COD, (the “Annuity Payments”). The 1st (first) installment of
Annuity Payments shall be due and payable within 15 (fifteen) days of the 180th(one
hundred and eightieth) day of COD and the remaining installments shall be due and
payable within 15 (fifteen) days of completion of each of the successive six months (“the
Annuity Payment Date”). For the avoidance of doubt, the last Annuity Payment Date
would be adjusted to in such a way that it falls at the end of the Operations Period.
23.6.3 Each of the Annuity Payments due and payable during the years following the COD shall
be as under:

Annuity following the COD Percentage of Completion Cost remaining to

be paid on COD

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1st Annuity
2.10%
2nd Annuity
2.17%
3rd Annuity
2.24%
4th Annuity
2.31%
5th Annuity
2.38%
6th Annuity
2.45%
7th Annuity
2.52%
8th Annuity
2.60%
9th Annuity
2.68%
10th Annuity
2.76%
11th Annuity
2.84%
12th Annuity
2.93%
13th Annuity
3.02%
14th Annuity
3.11%
15th Annuity
3.20%
16th Annuity
3.30%
17th Annuity
3.40%
18th Annuity
3.50%
19th Annuity
3.61%
20th Annuity
3.72%
21st Annuity
3.83%
22nd Annuity
3.94%
23rd Annuity
4.06%
24th Annuity
4.18%
25th Annuity
4.25%
26th Annuity
4.25%
27th Annuity
4.44%
28th Annuity
4.71%
29th Annuity
4.75%
30th Annuity
4.75%

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Each of the biannual installments payable hereunder shall be paid along with interest as
specified in Clause 23.6.4.
23.6.4 Interest shall be due and payable on the reducing balance of Completion Cost at an
interest rate equal to the average of one year MCLR of top 5 Scheduled Commercial
Banks5 plus 1.25%. Such interest shall be due and payable biannually along with each
installment specified in Clause 23.6.3. For the avoidance of doubt and by way of
illustration, the Parties agree that interest on the Completion Cost remaining to be paid,
calculated from COD and until the 180th (one hundred and eightieth) day of COD, shall
be due and payable to the Concessionaire along with the first Annuity Payment and
interest on **6% (** per cent) of the Percentage of Completion Cost remaining to be paid
on COD, calculated from first Annuity payment date and until the 1st (first) anniversary
of COD, shall be due and payable along with the second Annuity Payment due and
payable under this Agreement. The Parties further agree that interest shall be calculated
based on the number of days a particular average of one year MCLR of top 5 Scheduled
Commercial Banks was applicable during the period of calculation. For the purpose of
illustration, assuming that the balance capital cost remaining to be paid is Rs 100 crores
on the 1st Annuity Payment Date, the applicable average of one year MCLR of top 5
Scheduled Commercial Banks for the first 75 days is 8% and thereafter it is revised to
7.5% and remains unchanged till the 2ndAnnuity Payment Date, the interest would be
calculated as ((100*9.25%*75)/365)+((100*8.75%*105)/365). For the avoidance of
doubt7, the Interest would be calculated on simple interest basis and no compounding of
the same would be undertaken.

23.7 O&M Payments

23.7.1 The Parties acknowledge and agree that all O&M Expenses shall be borne by the
Concessionaire and in lieu thereof; a lump sum financial support in the form of biannual
payments shall be due and payable by the Authority, which shall be computed on
Rs…………(Rupees………….) (the “First Year O&M Cost”)£ + GST at the applicable
rates, in accordance with the provisions of this Clause 23.7 (the “O&M Payments”).
The Parties further acknowledge and agree that any O&M Expenses in excess of the
O&M Payments shall be borne solely by the Concessionaire, save and except as expressly
provided in this Agreement. For avoidance of doubt it is clarified that the O&M Payments
will be subject to any Change in Scope of the Project of the Concessionaire under Article
16of this Agreement.
23.7.2 Subject to the Provisions of Clause 23.7.3, the O&M Payments due and payable to the
Concessionaire shall be paid in 2 (two) equal biannual installments and disbursed by the
Authority together with the corresponding installments of Annuity Payments.

5
The authority shall declare the list of Top 5 Scheduled Commercial Banks on 1 st September every
calendar year based on the balance sheet size as declared in their annual reports. The 1 year MCLR of the
top 5 scheduled commercial banks shall be taken at the start of every quarter.
6
To be finalized on the basis of the outstanding Completion Cost Annuity pursuant to the payment of 1st
Annuity as provided in the Annuity payment schedule in Clause 23.6.3
7
Assuming that the total number of days between 1st Annuity payment date and 2nd Annuity date are 180.
In case the number of days are different the calculation may be appropriately changed.
£
First Year O&M Cost shall be the amount specified in the Bid of the selected Bidder.

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23.7.3 Each installment of O&M Payment shall be the product of the amount determined in
accordance with Clause 23.7.1 and the Price Index Multiple on the Reference Index Date
preceding the due date of payment thereof. For the avoidance of doubt and by way of
illustration, if (i) the First Year O&M Cost is Rs.1Cr. (Rupees one crore); (ii) the O&M
Payment is to be determined for the 2nd (second) year of the Operation Period; (iii) the
Price Index on the Reference Index Date preceding the Bid Date is 200 (two hundred) and
the Price Index on the Reference Index Date preceding the due date of payment is 240
(two hundred forty), implying a Price Index Multiple of 1.2 (one point two), then the
O&M Payment for that installment shall be the product of First Year O&M Cost and the
applicable Price Index Multiple, which product shall be Rs.1.2cr. (Rupees one point two
crore)

23.8 Mobilization Advance

The Authority shall, on request of the Concessionaire, make an advance payment in a sum
not exceeding 10% (ten per cent) of the Bid Project Cost (the “Mobilization Advance”).
This advance payment shall be made in two equal instalments. The Concessionaire may
request the Authority for the first instalment of the advance payment at any time after the
Appointed Date, along with furnishing a Bank Guarantee in a form satisfactory to the
Authority. The Concessionaire may request the Authority for the second instalment of the
advance payment at any time, after 60(sixty) days from the Appointed Date, along with
furnishing a Bank Guarantee in a form satisfactory to the Authority. The first and second
instalments of the Mobilization Advance shall be paid by the Authority within 30 (thirty)
days of receipt of the respective requests in this behalf from the Concessionaire. The rate
of interest on the Mobilization Advance shall be equal to the average of one year MCLR
of top 5 Scheduled Commercial Banks8 plus 1.25%, compounded annually. The
Mobilization Advance shall be deducted by the Authority in 8 (eight) equal instalments
from each of the payments to be made by the Authority to the Concessionaire in
accordance with the provisions of Clause 23.4 and the interest thereon shall be recovered
from the 9th (ninth) and 10th (tenth) instalments.
As the advance get recovered from the running bills/ stage payments, the BG for the
amount equivalent to the amount of advance recovered may be released on the request of
the Concessionaire.
The Concessionaire would be at liberty to either submit a substitute BG for the residual
amount or multiple BGs for such residual amount in replacement of the existing BG.
23.9 Treatment of incomplete works
23.9.1 The Parties acknowledge and agree that in the event COD occurs upon issuance of a
Provisional Certificate, the Annuity Payments and O&M Payments specified in this
Article 23 shall be made as if all works comprising the Project have been completed. The
works remaining incomplete shall be completed by the Concessionaire in accordance with
the provisions of this Agreement and thereupon, the Completion Certificate shall be
issued forthwith.

8
The authority shall declare the list of Top 5 Scheduled Commercial Banks on 1 st September every
calendar year based on the balance sheet size as declared in their annual reports. The 1 year MCLR of the
top 5 scheduled commercial banks shall be taken at the start of every quarter.

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23.9.2 In the event the Authority determines that any incomplete works referred to in Clause
23.9.1 are not required to be completed for any reason, it shall modify the Scope of the
Project in accordance with the provisions of Article 16 and the Completion Cost, Annuity
Payments and O&M Payments shall be reduced on account of such Change of Scope as
per the provisions of Article 16.

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ARTICLE 24

Deleted

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ARTICLE 25
ESCROW ACCOUNT
25.1 Escrow Account
25.1.1 The Concessionaire shall, prior to the Appointed Date, open and establish an Escrow
Account with a Bank (the “Escrow Bank”) in accordance with this Agreement read with
the Escrow Agreement.
25.1.2 The nature and scope of the Escrow Account are fully described in the agreement (the
“Escrow Agreement”) to be entered into amongst the Concessionaire, the Authority, the
Escrow Bank and the Senior Lenders through the Lenders’ Representative, which shall be
substantially in the form set forth in Schedule-O.

25.2 Deposits into Escrow Account

The Concessionaire shall deposit or cause to be deposited the following inflows and
receipts into the Escrow Account:
(a) All funds constituting the Financial Package;
(b) All revenues from or in respect of the Project, including the proceeds of any rentals,
deposits, capital receipts or insurance claims; and
(c) All payments by the Authority, after deduction of any outstanding payments.

25.3 Withdrawals during Concession Period

25.3.1 The Concessionaire shall, at the time of opening the Escrow Account, give irrevocable
instructions, by way of an Escrow Agreement, to the Escrow Bank instructing, inter alia,
that deposits in the Escrow Account shall be appropriated in the following order every
month, or at shorter intervals as necessary, and if not due in a month then appropriated
proportionately in such month and retained in the Escrow Account and paid out therefrom
in the month when due:
(a) All taxes due and payable by the Concessionaire for and in respect of the Project;
(b) Deleted;
(c) All payments relating to construction of the Project, subject to and in accordance
with the conditions, if any, set forth in the Financing Agreements;
(d) O&M Expenses, subject to the ceiling, if any, set forth in the Financing
Agreements;
(e) O&M Expenses and other costs and expenses incurred by the Authority in
accordance with the provisions of this Agreement, and certified by the Authority
as due and payable to it;
(f) Any amounts due and payable to the Authority (other than under Clause 9.5);
(g) Monthly proportionate provision of Debt Service due in an Accounting Year;
(h) All payments and Damages certified by the Authority as due and payable to it by
the Concessionaire;

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(i) Monthly proportionate provision of debt service payments due in an Accounting

Year in respect of Subordinated Debt;
(j) Any reserve requirements set forth in the Financing Agreements; and
(k) Balance, if any, in accordance with the instructions of the Concessionaire.
25.3.2 The Concessionaire shall not in any manner modify the order of payment specified in
Clause 25.3.1, except with the prior written approval of the Authority.
25.4 Withdrawals upon Termination
25.4.1 Notwithstanding anything to the contrary contained in this Agreement, all amounts
standing to the credit of the Escrow Account shall, upon Termination, be appropriated in
the following order:
(a) All taxes due and payable by the Concessionaire for and in respect of the Project;
(b) Deleted;
(c) Percentage of Debt Due excluding Subordinated Debt if required to be as per the
terms of this Agreement;
(d) Outstanding payments due to the Authority;
(e) All payments and Damages certified by the Authority as due and payable to it by
the Concessionaire;
(f) Retention and payments relating to the liability for defects and deficiencies set
forth in Article 33;
(g) Outstanding Debt Service including the balance of Debt Due;
(h) Outstanding Subordinated Debt;
(i) Incurred or accrued O&M Expenses;
(j) Any other payments required to be made under this Agreement; and
(k) Balance, if any, in accordance with the instructions of the Concessionaire:
Provided that no appropriations shall be made under Sub-clause (k) of this Clause 25.4.1 until
a Vesting Certificate has been issued by the Authority under the provisions of Article 32.
25.4.2 The provisions of this Article 25 and the instructions contained in the Escrow Agreement
shall remain in full force and effect until the obligations set forth in Clause 25.4.1 have
been discharged.

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ARTICLE 26
INSURANCE
26.1 Insurance during Concession Period
The Concessionaire shall effect and maintain at its own cost, during the Construction
Period and the Operation Period, such insurances for such maximum sums as may be
required under the Financing Agreements and Applicable Laws, and such insurances as
may be necessary or prudent in accordance with Good Industry Practice. The
Concessionaire shall also effect and maintain such insurances as may be necessary for
mitigating the risks that may devolve on the Authority as a consequence of any act or
omission of the Concessionaire during the Construction Period. The Concessionaire shall
procure that in each insurance policy, the Authority shall be a co-insured and that the
insurer shall pay the proceeds of insurance into the Escrow Account. For the avoidance of
doubt, the level of insurance to be maintained by the Concessionaire after repayment of
Senior Lenders’ dues in full shall be determined on the same principles as applicable for
determining the level of insurance prior to such repayment of Senior Lenders’ dues.

26.2 Insurance Cover

Without prejudice to the provisions contained in Clause 26.1, the Concessionaire shall,
during the Operation Period, procure and maintain Insurance Cover including but not
limited to the following:
(a) Loss, damage or destruction of the Project Assets, including assets handed over
by the Authority to the Concessionaire, at replacement value;
(b) Comprehensive third party liability insurance including injury to or death of
personnel of the Authority or others caused by the Project;
(c) The Concessionaire’s general liability arising out of the Concession;
(d) Liability to third parties for goods or property damage;
(e) Workmen’s compensation insurance; and
(f) any other insurance that may be necessary to protect the Concessionaire and its
employees, including all Force Majeure Events that are insurable at commercially
reasonable premiums and not otherwise covered in items(a) to (e) above.

26.3 Notices to the Authority

No later than 45 (forty five) days prior to commencement of the Construction Period or
the Operation Period, as the case may be, the Concessionaire 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 26. Within 30 (thirty) days of receipt
of such notice, the Authority may require the Concessionaire 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.

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26.4 Evidence of Insurance Cover

All insurances obtained by the Concessionaire in accordance with this Article 26 shall be
maintained with insurers on terms consistent with Good Industry Practice. Within 15
(fifteen) days of obtaining any insurance cover, the Concessionaire shall furnish to the
Authority, notarized true copies of the certificate(s) of insurance, copies of insurance
policies and premium 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
nonrenewal has been delivered by the Concessionaire to the Authority.

26.5 Remedy for failure to insure

If the Concessionaire 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 premier and recover the costs thereof from the
Concessionaire, 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
Concessionaire.

26.6 Waiver of subrogation

All insurance policies in respect of the insurance obtained by the Concessionaire pursuant
to this Article 26 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.

26.7 Concessionaire’s waiver

The Concessionaire 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
Concessionaire 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 Concessionaire 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.

26.8 Application of insurance proceeds

The proceeds from all insurance claims, except life and injury, shall be paid to the
Concessionaire by credit to the Escrow Account and it shall, notwithstanding anything to
the contrary contained in Clause 25.3, apply such proceeds for any necessary repair,
reconstruction, reinstatement, replacement, improvement or delivery of the Project, and
the balance remaining, if any, shall be applied in accordance with the provisions
contained in this behalf in the Financing Agreements.

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26.9 Compliance with conditions of insurance policies

The Concessionaire expressly acknowledges and undertakes to fully indemnify the
Authority from and against all losses and claims arising from the Concessionaire’s failure
to comply with conditions imposed by the insurance policies affected in accordance with
this Agreement.

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ARTICLE 27
ACCOUNTS AND AUDIT
27.1 Audited accounts
27.1.1 The Concessionaire shall maintain books of accounts recording all its receipts (including
all revenues derived/collected by it from or on account of the Project and/or its use),
income, expenditure, payments (including payments from the Escrow Account), assets
and liabilities, in accordance with this Agreement, Good Industry Practice, Applicable
Laws and Applicable Permits. The Concessionaire shall provide 2 (two) copies of its
Balance Sheet, Cash Flow Statement and Profit and Loss Account, along with a report
thereon by its Statutory Auditors, within 180 (one hundred and eighty) days of the close
of the Accounting Year to which they pertain and such audited accounts, save and except
where expressly provided to the contrary, shall form the basis of payments by either Party
under this Agreement. The Authority shall have the right to inspect the records of the
Concessionaire during office hours and require copies of relevant extracts of books of
accounts, duly certified by the Statutory Auditors, to be provided to the Authority for
verification of basis of payments, and in the event of any discrepancy or error being
found, the same shall be rectified and such rectified account shall form the basis of
payments by either Party under this Agreement.
27.1.2 The Concessionaire shall, within 30 (thirty) days of the close of each quarter of an
Accounting Year, furnish to the Authority its unaudited financial results in respect of the
preceding quarter, in the manner and form prescribed by the Securities and Exchange
Board of India for publication of quarterly results by the companies listed on a stock
exchange.
27.1.3 On or before the thirty-first day of May each Year, the Concessionaire shall provide to the
Authority, for the preceding Accounting Year, a statement duly audited by its Statutory
Auditors giving summarized information on revenues derived from the Project, and such
other information as the Authority may reasonably require.

27.2 Appointment of auditors

27.2.1 The Concessionaire shall appoint, and have during the subsistence of this Agreement as
its Statutory Auditors, a firm chosen by it from the mutually agreed list of 5 (five)
reputable firms of chartered accountants (the “Panel of Chartered Accountants”), such
list to be prepared substantially in accordance with the criteria set forth in Schedule-P. All
fees and expenses of the Statutory Auditors shall be borne by the Concessionaire.
27.2.2 The Concessionaire may terminate the appointment of its Statutory Auditors after a notice
of 45 (forty five) days to the Authority, subject to the replacement Statutory Auditors
being appointed from the Panel of Chartered Accountants.
27.2.3 Notwithstanding anything to the contrary contained in this Agreement, the Authority shall
have the right, but not the obligation, to appoint at its cost from time to time and at any
time, another firm (the “Additional Auditors”) from the Panel of Chartered Accountants
to audit and verify all those matters, expenses, costs, realizations and things which the
Statutory Auditors are required to do, undertake or certify pursuant to this Agreement.

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27.3 Certification of claims by Statutory Auditors

Any claim or document provided by the Concessionaire to the Authority in connection
with or relating to receipts, income, payments, costs, expenses, accounts or audit, and any
matter incidental thereto shall be valid and effective only if certified by its Statutory
Auditors. For the avoidance of doubt, such certification shall not be required for exchange
of information in the normal course of business including the submission of any periodic
information in pursuance of the provisions of this Agreement, save and except where such
certification is expressly provided.

27.4 Set-off
In the event any amount is due and payable by the Authority to the Concessionaire, it may
set-off any sums payable to it by the Concessionaire and pay the balance remaining. Any
exercise by the Authority of its rights under this Clause 27.4 shall be without prejudice to
any other rights or remedies available to it under this Agreement or otherwise.

27.5 Dispute resolution

In the event of there being any difference between the findings of the Additional Auditors
or the Concurrent Auditors, as the case may be, and the certification provided by the
Statutory Auditors, such Auditors shall meet to resolve the differences and if they are
unable to resolve the same, such Dispute shall be resolved by the Authority by recourse to
the Dispute Resolution Procedure.

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Part V
Force Majeure and Termination

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ARTICLE 28
FORCE MAJEURE
28.1 Force Majeure
As used in this Agreement, the expression “Force Majeure” or “Force Majeure Event”
shall, save and except as expressly provided otherwise, mean occurrence in India of any
or all of Non-Political Event, Indirect Political Event and Political Event, as defined in
Clauses 28.2, 28.3 and 28.4 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 (a) is beyond the reasonable control of the Affected
Party, and (b) the Affected Party could not have prevented or overcome by exercise of
due diligence and following Good Industry Practice, and (c) has Material Adverse Effect
on the Affected Party.

28.2 Non-Political Event

A Non-Political Event shall mean one or more of the following acts or events:
(a) act of God, epidemic, extremely adverse weather conditions, lightning,
earthquake, landslide, cyclone, flood, volcanic eruption, chemical or radioactive
contamination or ionizing radiation, fire or explosion (to the extent of
contamination or radiation or fire or explosion originating from a source external
to the Site);
(b) strikes or boycotts (other than those involving the Concessionaire, Contractors or
their respective employees/representatives, or attributable to any act or omission
of any of them) interrupting supplies and services to the Project for a continuous
period of 24 (twenty four) hours and an aggregate period exceeding 7 (seven)
days in an Accounting Year, and not being an Indirect Political Event set forth in
Clause 28.3;
(c) any failure or delay of a Contractor but only to the extent caused by another Non-
Political Event and which does not result in any offsetting compensation being
payable to the Concessionaire by or on behalf of such Contractor;
(d) any judgment or order of any court of competent jurisdiction or statutory
authority made against the Concessionaire in any proceedings for reasons other
than (i) failure of the Concessionaire 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;
(e) 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
(f) Any event or circumstances of a nature analogous to any of the foregoing.
28.3 Indirect Political Event
An Indirect Political Event shall mean one or more of the following acts or events:

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(a) 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;
(b) any political or economic upheaval, disturbance, movement, struggle or similar
occurrence which could not have been anticipated or foreseen by a prudent
person and which causes the construction or operation of the Project to be
financially unviable or otherwise not feasible;
(c) industry-wide or State-wide strikes or industrial action for a continuous period of
24 (twenty four) hours and exceeding an aggregate period of 7 (seven) days in an
Accounting Year;
(d) [Deleted]
(e) failure of the Authority to permit the Concessionaire to continue its Construction
Works, with or without modifications, in the event of stoppage of such works
after discovery of any geological or archaeological finds or for any other reason;
(f) Any failure or delay of a Contractor to the extent caused by any Indirect Political
Event and which does not result in any offsetting compensation being payable to
the Concessionaire by or on behalf of such Contractor;
(g) Any Indirect Political Event that causes a Non-Political Event; or
(h) Any event or circumstances of a nature analogous to any of the foregoing.

28.4 Political Event

A Political Event shall mean one or more of the following acts or events by or on account
of any Government Instrumentality:
(a) Change in Law, only if consequences thereof cannot be dealt with under and in
accordance with the provisions of Article 35 and its effect, in financial terms,
exceeds the sum specified in Clause 35.1;
(b) Compulsory acquisition in national interest or expropriation of any Project Assets
or rights of the Concessionaire or of the Contractors;
(c) unlawful or unauthorized or without jurisdiction revocation of, or refusal to
renew or grant without valid cause, any clearance, license, permit, authorization,
no objection certificate, consent, approval or exemption required by the
Concessionaire or any of the Contractors to perform their respective obligations
under this Agreement and the Project Agreements; provided that such delay,
modification, denial, refusal or revocation did not result from the
Concessionaire’s or any Contractor’s inability or failure to comply with any
condition relating to grant, maintenance or renewal of such clearance, license,
authorization, no objection certificate, exemption, consent, approval or permit;
(d) any failure or delay of a Contractor but only to the extent caused by another
Political Event and which does not result in any offsetting compensation being
payable to the Concessionaire by or on behalf of such Contractor; or
(e) Any event or circumstance of a nature analogous to any of the foregoing.

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28.5 Duty to report Force Majeure Event

28.5.1 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:
(a) The nature and extent of each Force Majeure Event which is the subject of any
claim for relief under this Article 28 with evidence in support thereof;
(b) 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;
(c) the measures which the Affected Party is taking or proposes to take for
alleviating the impact of such Force Majeure Event; an
(d) Any other information relevant to the Affected Party’s claim.
28.5.2 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 7 (seven) 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.
28.5.3 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 28.5.1, and such other
information as the other Party may reasonably request the Affected Party to provide.
28.6 Effect of Force Majeure Event on the Concession
28.6.1 Upon the occurrence of any Force Majeure Event prior to the Appointed Date, the period
set forth in Clause 4.1 for fulfillment of Conditions Precedent and in Clause 22.1.1 for
achieving Financial Close shall be extended by a period equal in length to the duration of
the Force Majeure Event.
28.6.2 at any time after the Appointed Date, if any Force Majeure Event occurs:
(a) before COD, the Construction Period and the dates set forth in the Project
Completion Schedule shall be extended by a period equal in length to the
duration for which such Force Majeure Event subsists; or
(b) After COD, the Concessionaire shall be entitled to receive Annuity Payments
plus interest due and payable under this Agreement.
Provided any payment to be made under this clause shall be subject to deduction
of outstanding dues of the Authority, if any.

28.7 Allocation of costs arising out of Force Majeure

28.7.1 Upon occurrence of any Force Majeure Event prior to the Appointed Date, the Parties
shall bear their respective costs and no Party shall be required to pay to the other Party
any costs thereof.
28.7.2 Upon occurrence of a Force Majeure Event after the Appointed Date, the costs incurred
and attributable to such event and directly relating to the Project (the “Force Majeure
Costs”) shall be allocated and paid as follows:

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(a) 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;
(b) 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 Concessionaire, 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 Concessionaire; and
(c) Upon occurrence of a Political Event, all Force Majeure Costs attributable to such
Political Event shall be reimbursed by the Authority to the Concessionaire.
For the avoidance of doubt, Force Majeure Costs may include interest payments on Debt
Due, O&M Expenses, any increase in the cost of Construction Works on account of
inflation and all other costs directly attributable to the Force Majeure Event, but shall not
include any costs which are expressly covered under any provision of this Agreement or
debt repayment obligations, and for determining such costs, information contained in the
Financial Package may be relied upon to the extent that such information is relevant.
28.7.3 Save and except as expressly provided in this Article 28, 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.

28.8 Termination Notice for Force Majeure Event

If a Force Majeure Event subsists for a period of 180 (one hundred and eighty) days or
more within a continuous period of 365 (three hundred and sixty five)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 28, 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)
day’s 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.

28.9 Termination Payment for Force Majeure Event

28.9.1 If Termination is on account of a Non-Political Event, the Authority shall make a
Termination Payment to the Concessionaire in an amount to be calculated as under:
(i) Prior to COD:

Payment milestone Basis of calculation for termination payment

1st Payment Milestone 90% Debt Due or 0.68% of Bid Project Cost, whichever is lower

2nd Payment Milestone 90% Debt Due or 1.35% of Bid Project Cost, whichever is lower
3rd Payment Milestone 90% Debt Due or 5.4% of Bid Project Cost, whichever is lower

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4th Payment Milestone 90% Debt Due or 9.45% of Bid Project Cost, whichever is lower

5th Payment Milestone 90% Debt Due or 13.5% of Bid Project Cost, whichever is lower
6th Payment Milestone 90% Debt Due or 17.55% of Bid Project Cost, whichever is lower

7th Payment Milestone 90% Debt Due or 21.60% of Bid Project Cost, whichever is lower

8th Payment Milestone 90% Debt Due or 25.65% of Bid Project Cost, whichever is lower

9th Payment Milestone 90% Debt Due or 29.70% of Bid Project Cost, whichever is lower

10th Payment Milestone 90% Debt Due or 33.75% of Bid Project Cost, whichever is lower

For the avoidance of doubt, it is clarified that in case of termination happening in

between two Payment Milestones, for the purpose of calculation of Debt Due, the
milestone achieved would only be considered provided further the above payment
so calculated above shall be reduced by Insurance Cover.
(ii) In case Termination occurs on or after COD, the Authority shall make a
Termination Payment to the Concessionaire in an amount equal to 75% (seventy
five percent) of Annuity Payments remaining unpaid for and in respect of the
remaining Concession Period, including interest thereon up to the Transfer Date.
Provided further the above payment so calculated above shall be reduced by
Insurance Cover.
28.9.2 If Termination is on account of an Indirect Political Event, the Authority shall make a
Termination Payment to the Concessionaire in an amount equal to:
(i) In case termination occurs prior to COD:
(a) Debt Due payment calculated as per the table below less Insurance Cover;
provided that if any insurance claims forming part of the Insurance Cover are
not admitted and paid, then 80% (eighty per cent) of such unpaid claims
shall be included in the computation of Debt Due. Further the Debt Due
would be calculated as per the table provided below:

Payment milestone Basis of calculation for Debt Due

1st Payment Milestone Debt Due or 0.75% of Bid Project Cost, whichever is lower

2nd Payment Milestone Debt Due or 1.50% of Bid Project Cost, whichever is lower
3rd Payment Milestone Debt Due or 6.00% of Bid Project Cost, whichever is lower

4th Payment Milestone Debt Due or 10.5% of Bid Project Cost, whichever is lower

5th Payment Milestone Debt Due or 15.00% of Bid Project Cost, whichever is
lower
6th Payment Milestone Debt Due or 19.50% of Bid Project Cost, whichever is
lower
7th Payment Milestone Debt Due or 24.00% of Bid Project Cost, whichever is
lower
8th Payment Milestone Debt Due or 28.50% of Bid Project Cost, whichever is
lower

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9th Payment Milestone Debt Due or 33.00% of Bid Project Cost, whichever is
lower
10th Payment Milestone Debt Due or 37.50% of Bid Project Cost, whichever is
lower

For the avoidance of doubt, it is clarified that in case of termination happening in

between two Payment Milestones, for the purpose of calculation of Debt Due, the
milestone achieved would only be considered ; and(b) 110% (one hundred and
ten per cent) of the Adjusted Equity;
(ii) In case Termination occurs on or after COD, the Authority shall make a
Termination Payment to the Concessionaire in an amount equal to 90% (ninety
percent) of Annuity Payments remaining unpaid for and in respect of the
remaining Concession Period, including interest thereon up to the Transfer Date.
28.9.3 If Termination is on account of a Political Event, the Authority shall make a Termination
Payment to the Concessionaire in an amount that would be payable under Clause 31.3.3
as if it were an Authority Default.

28.10 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

28.11 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:
(a) The suspension of performance shall be of no greater scope and of no longer
duration than is reasonably required by the Force Majeure Event;
(b) 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
(c) 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.

28.12 Deleted

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ARTICLE 29
COMPENSATION FOR BREACH OF AGREEMENT
29.1 Compensation for default by the Concessionaire
Subject to the provisions of Clause 29.4, in the event of the Concessionaire being in
material breach or default of this Agreement, it shall pay to the Authority by way of
compensation, all direct costs suffered or incurred by the Authority as a consequence of
such material breach or default, within 30 (thirty) days of receipt of the demand supported
by necessary particulars thereof; provided that no compensation shall be payable under
this Clause 29.1 for any material breach or default in respect of which Damages are
expressly specified and payable under this Agreement or for any consequential losses
incurred by the Authority.
29.2 Compensation for default by the Authority
Subject to the provisions of Clause 29.4, in the event of the Authority being in material
breach or default of this Agreement at any time after the Appointed Date, it shall pay to
the Concessionaire by way of compensation, all direct costs suffered or incurred by the
Concessionaire as a consequence of such material breach or default within 30 (thirty)
days of receipt of the demand supported by necessary particulars thereof; provided that no
such compensation shall be payable for any material breach or default in respect of which
Damages have been expressly specified in this Agreement. For the avoidance of doubt,
compensation payable may include interest payments on debt, O&M Expenses, any
increase in capital costs on account of inflation and all other costs directly attributable to
such material breach or default but shall not include loss of Annuity Payments, debt
repayment obligations or other consequential losses, loss of profit, EPC Contractors
claims, and for determining such compensation, information contained in the Financial
Package and the Financial Model may be relied upon to the extent it is relevant.
29.3 [Deleted]

29.4 Mitigation of costs and damage

The Affected Party shall make all reasonable efforts to mitigate or limit the costs and
damage arising out of or as a result of breach of Agreement by the other Party.

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ARTICLE 30
SUSPENSION OF CONCESSIONAIRE’S RIGHTS
30.1 Suspension upon Concessionaire Default
Upon occurrence of a Concessionaire Default, the Authority shall be entitled, without
prejudice to its other rights and remedies under this Agreement including its rights of
Termination hereunder, to (a) suspend all rights of the Concessionaire under this
Agreement, and pursuant hereto, and (b) exercise such rights itself and perform the
obligations hereunder or authorize 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 Concessionaire and may
extend up to a period not exceeding 180 (one hundred and eighty) days from the date of
issue of such notice; provided that upon written request from the Concessionaire and the
Lenders’ Representative, the Authority shall extend the aforesaid period of 180 (one
hundred and eighty) days by a further period not exceeding 90 (ninety) days.
30.2 Authority to act on behalf of Concessionaire
30.2.1 During the period of Suspension, the Authority shall, on behalf of the Concessionaire,
collect all revenues under and in accordance with this Agreement and deposit the same in
the Escrow Account. The Authority shall be entitled to make withdrawals from the
Escrow Account for meeting the O&M Expenses and for meeting the costs incurred by it
for remedying and rectifying the cause of Suspension, and thereafter for defraying the
expenses specified in Clause25.3.
30.2.2 During the period of Suspension hereunder, all rights and liabilities vested in the
Concessionaire in accordance with the provisions of this Agreement shall continue to vest
in the Concessionaire and all things done or actions taken, including expenditure incurred
by the Authority for discharging the obligations of the Concessionaire under and in
accordance with this Agreement and the Project Agreements, shall be deemed to have
been done or taken for and on behalf of the Concessionaire and the Concessionaire
undertakes to indemnify the Authority for all costs incurred- during such period. The
Concessionaire hereby licenses and sub-licenses respectively, the Authority or any other
person authorized by it under Clause 30.1 to use during Suspension, all Intellectual
Property belonging to or licensed to the Concessionaire with respect to the Project and its
design, engineering, construction, operation and maintenance, and which is used or
created by the Concessionaire in performing its obligations under the Agreement.

30.3 Revocation of Suspension

30.3.1 In the event that the Authority shall have rectified or removed the cause of Suspension
within a period not exceeding 90 (ninety) days from the date of Suspension, it shall
revoke the Suspension forthwith and restore all rights of the Concessionaire 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.
30.3.2 Upon the Concessionaire having cured the Concessionaire Default within a period not
exceeding 90 (ninety) days from the date of Suspension, the Authority shall revoke the
Suspension forthwith and restore all rights of the Concessionaire under this Agreement.

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30.4 Substitution of Concessionaire

At any time during the period of Suspension, the Lenders’ Representative, on behalf of
Senior Lenders, shall be entitled to substitute the Concessionaire under and in accordance
with the Substitution Agreement, and upon receipt of notice there under from the
Lenders’ Representative, the Authority shall withhold Termination for a period not
exceeding 180 (one hundred and eighty) days from the date of Suspension, and any
extension thereof under Clause 30.1, for enabling the Lenders’ Representative to exercise
its rights of substitution on behalf of Senior Lenders.

30.5 Termination
30.5.1 At any time during the period of Suspension under this Article 30, the Concessionaire
may by notice require the Authority to revoke the Suspension and issue a Termination
Notice. Subject to the rights of the Lenders’ Representative to undertake substitution in
accordance with the provisions of this Agreement and within the period specified in
Clause 30.4, the Authority shall, within 15 (fifteen) days of receipt of such notice,
terminate this Agreement under and in accordance with Article 31 as if it is a
Concessionaire Default under Clause 31.1.
30.5.2 Notwithstanding anything to the contrary contained in this Agreement, in the event that
Suspension is not revoked within 180 (one hundred and eighty) days from the date of
Suspension hereunder or within the extended period, if any, set forth in Clause 30.1, the
Concession 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 Concessionaire Default.

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ARTICLE 31
TERMINATION
31.1 Termination for Concessionaire Default
31.1.1 Save as otherwise provided in this Agreement, in the event that any of the defaults
specified below shall have occurred, and the Concessionaire 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 Concessionaire shall be deemed to be in default of
this Agreement (the “Concessionaire Default”), unless the default has occurred 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 following:
(a) The Performance Security has been encashed and appropriated in accordance
with Clause 9.2 and the Concessionaire fails to replenish or provide fresh
Performance Security within a Cure Period of 15 (fifteen) days;
(b) subsequent to the replenishment or furnishing of fresh Performance Security in
accordance with Clause 9.2, the Concessionaire fails to meet any Condition
Precedent or cure the Concessionaire Default, as the case may be, for which
whole or part of the Performance Security was appropriated, within a Cure Period
of 120 (one hundred and twenty) days;
(c) the Concessionaire does not achieve the latest outstanding Project Milestone due
in accordance with the provisions of Schedule-G and continues to be in default
for 120 (one hundred and twenty) days;
(d) The Concessionaire abandons or manifests intention to abandon the construction
or operation of the Project without the prior written consent of the Authority;
(e) COD does not occur within the period specified in Clause 12.3.3;
(f) the Punch List items have not been completed within the period set forth in
Clause 14.4.1;
(g) the Concessionaire is in breach of the Maintenance Requirements or the Safety
Requirements, as the case may be;
(h) the Concessionaire has failed to make any payment to the Authority within the
period specified in this Agreement;
(i) an Escrow Default has occurred and the Concessionaire fails to cure the default
within a Cure Period of 15 (fifteen) days;
(j) upon occurrence of a Financial Default, the Lenders’ Representative has by
notice required the Authority to undertake Suspension or Termination, as the case
may be, in accordance with the Substitution Agreement and the Concessionaire
fails to cure the default within the Cure Period specified hereinabove;
(k) a breach of any of the Project Agreements by the Concessionaire has caused a
Material Adverse Effect;
(l) the Concessionaire creates any Encumbrance in breach of this Agreement;
(m) the Concessionaire repudiates this Agreement or otherwise takes any action or
evidences or conveys an intention not to be bound by the Agreement;
(n) a Change in Ownership has occurred in breach of the provisions of Clause 5.3;
(o) there is a transfer, pursuant to law either of (i) the rights and/or obligations of the
Concessionaire under any of the Project Agreements, or of (ii) all or part of the
assets or undertaking of the Concessionaire, and such transfer causes a Material
Adverse Effect;

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(p) an execution levied on any of the assets of the Concessionaire has caused a
Material Adverse Effect;
(q) the Concessionaire is adjudged bankrupt or insolvent, or if a trustee or receiver is
appointed for the Concessionaire or for the whole or material part of its assets
that has a material bearing on the Project;
(r) the Concessionaire 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;
(s) a resolution for winding up of the Concessionaire is passed, or any petition for
winding up of the Concessionaire 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 Concessionaire is
ordered to be wound up by a 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 Concessionaire are transferred to
the amalgamated or reconstructed entity and that the amalgamated or
reconstructed entity has unconditionally assumed the obligations of the
Concessionaire under this Agreement and the Project Agreements; and provided
that:
(i) the amalgamated or reconstructed entity has the capability and operating
experience necessary for the performance of its obligations under this
Agreement and the Project Agreements;
(ii) the amalgamated or reconstructed entity has the financial standing to
perform its obligations under this Agreement and the Project Agreements
and has a credit worthiness at least as good as that of the Concessionaire
as at the Appointed Date; and
(iii) Each of the Project Agreements remains in full force and effect;
(t) any representation or warranty of the Concessionaire herein contained which is,
as of the date hereof, found to be materially false, incorrect or misleading or the
Concessionaire is at any time hereafter found to be in breach thereof;
(u) the Concessionaire 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 material
particulars;
(v) the Concessionaire has failed to fulfill any obligation, for which failure
Termination has been specified in this Agreement;
(w) the Concessionaire issues a Termination Notice in violation of this Agreement;
(x) the Concessionaire commits a default in complying with any other provision of
this Agreement if such default causes a Material Adverse Effect on the Authority.
31.1.2 Without prejudice to any other rights or remedies which the Authority may have under
this Agreement, upon occurrence of a Concessionaire Default, the Authority shall be
entitled to terminate this Agreement by issuing a Termination Notice to the
Concessionaire; provided that before issuing the Termination Notice, the Authority shall
by a notice inform the Concessionaire of its intention to issue such Termination Notice
and grant 15 (fifteen) days to the Concessionaire 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, subject to the provisions of Clause 31.1.3.

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31.1.3 The Authority shall, if there be Senior Lenders, send a copy of its notice of intention to
issue a Termination Notice referred to in Clause 31.1.2 to inform the Lenders’
Representative and grant 15 (fifteen) days to the Lenders’ Representative, for making a
representation on behalf of the Senior Lenders stating the intention to substitute the
Concessionaire in accordance with the Substitution Agreement. In the event the Authority
receives such representation on behalf of Senior Lenders, it shall, in its discretion, either
withhold Termination for a period not exceeding 180 (one hundred and eighty) days from
the date of such representation or exercise its right of Suspension, as the case may be, for
enabling the Lenders’ Representative to exercise the Senior Lenders' right of substitution
in accordance with the Substitution Agreement:
Provided that the Lenders’ Representative may, instead of exercising the Senior Lenders’
right of substitution, procure that the default specified in the notice is cured within the
aforesaid period of 180 (one hundred and eighty) days, and upon such curing thereof, the
Authority shall withdraw its notice referred to above and restore all the rights of the
Concessionaire.
Provided further that upon written request from the Lenders’ Representative and the
Concessionaire, the Authority shall extend the aforesaid period of 180 (one hundred and
eighty) days by such further period not exceeding 90 (ninety) days, as the Authority may
deem appropriate.

31.2 Termination for Authority Default

31.2.1 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 Concessionaire or due to
Force Majeure. The defaults referred to herein shall include the following:
(a) 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 Concessionaire;
(b) The Authority has failed to make any payment to the Concessionaire within the
period specified in this Agreement;
(c) The Authority fails to provide, within a period of 180 (one hundred and eighty
days) from the Appointed Date, statutory clearances required for construction of
the Project; or
(d) The Authority repudiates this Agreement or otherwise takes any action that
amounts to or manifests an irrevocable intention not to be bound by this
Agreement.
31.2.2 Without prejudice to any other right or remedy which the Concessionaire may have under
this Agreement, upon occurrence of an Authority Default, the Concessionaire shall,
subject to the provisions of the Substitution Agreement, be entitled to terminate this
Agreement by issuing a Termination Notice to the Authority; provided that before issuing
the Termination Notice, the Concessionaire shall by a notice inform the Authority of its
intention to issue the Termination Notice and grant 15 (fifteen) days to the Authority to

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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.
31.3 Termination Payment
31.3.1 Upon Termination on account of a Concessionaire Default during the Operation Period,
the Authority shall pay to the Concessionaire, by way of Termination Payment, an
amount equal to 65% (sixty five per cent) of the sum of Annuity Payments remaining
unpaid for and in respect of the Concession Period, including interest thereon up to the
Transfer Date.
31.3.2 Notwithstanding to the provisions of Clause 31.3.1 upon Termination on account of
Concessionaire Default during the Construction Period, the Termination Payment shall be
based on the Payment Milestone achieved which is in terms of the Physical Progress
made by the Concessionaire in the Project and the Termination Payment corresponding to
the achieved Payment Milestone shall be as follows:

Payment milestone Basis of calculation for termination payment

1st Payment Milestone NIL

2nd Payment Milestone NIL

3rd Payment Milestone 50% of Debt Due or 3.00% of Bid Project Cost, whichever is lower

4th Payment Milestone 55% of Debt Due or 5.78% of Bid Project Cost, whichever is lower

5th Payment Milestone 60% of Debt Due or 9.00% of Bid Project Cost, whichever is lower

6th Payment Milestone 65% of Debt Due or 12.68% of Bid Project Cost, whichever is lower

7th Payment Milestone 70% of Debt Due or 16.80% of Bid Project Cost, whichever is lower

8th Payment Milestone 75% of Debt Due or 21.38% of Bid Project Cost, whichever is lower

9th Payment Milestone 80% of Debt Due or 26.40% of Bid Project Cost, whichever is lower

10th Payment Milestone 85% of Debt Due or 31.88% of Bid Project Cost, whichever is lower

For the avoidance of doubt, it is clarified that in case of termination happening in between
two Payment Milestones, for the purpose of calculation of Termination Payment, the
milestone achieved would only be considered.
31.3.3 Upon Termination on account of an Authority Default, the Authority shall pay to the
Concessionaire, by way of Termination Payment, an amount equalto:
(i) In case the termination occurs prior to COD
(a) Debt Due payment calculated as per the table below less Insurance Cover;
provided that if any insurance claims forming part of the Insurance Cover are
not admitted and paid, then 80% (eighty per cent) of such unpaid claims
shall be included in the computation of Debt Due. Further the Debt Due
would be calculated as per the table provided below:

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Payment Milestone Basis of calculation for Debt Due payment

1st Payment Milestone Debt Due or 0.75% of Bid Project Cost, whichever is lower
2nd Payment Milestone Debt Due or 1.50% of Bid Project Cost, whichever is lower
3rd Payment Milestone Debt Due or 6.00% of Bid Project Cost, whichever is lower
4th Payment Milestone Debt Due or 10.50% of Bid Project Cost, whichever is
lower
5th Payment Milestone Debt Due or 15.00% of Bid Project Cost, whichever is
lower
6th Payment Milestone Debt Due or 19.50% of Bid Project Cost, whichever is
lower
7th Payment Milestone Debt Due or 24.00% of Bid Project Cost, whichever is
lower
8th Payment Milestone Debt Due or 28.50% of Bid Project Cost, whichever is
lower
9th Payment Milestone Debt Due or 33.00% of Bid Project Cost, whichever is
lower
10th Payment Milestone Debt Due or 37.50% of Bid Project Cost, whichever is
lower

For the avoidance of doubt, it is clarified that in case of termination

happening in between two Payment Milestones, for the purpose of
calculation of Debt Due, the milestone achieved would only be
considered; and
(b) 150% (one hundred and fifty per cent) of the Adjusted Equity;
(ii) In case the termination occurs on or after COD, the Authority shall pay to the
Concessionaire, by way of Termination Payment, an amount equal to sum of
Annuity Payments remaining unpaid for and in respect of the Concession Period,
including interest thereon up to the Transfer Date.
31.3.4 Termination Payment shall become due and payable to the Concessionaire within 15
(fifteen) days of a demand being made by the Concessionaire to the Authority with the
necessary particulars, and in the event of any delay, the Authority shall pay interest at a
rate equal to 3% (three per cent) above the daily average Bank Rate 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.
31.3.5 The Concessionaire expressly agrees that Termination Payment under this Article 31 shall
constitute a full and final settlement of all claims of the Concessionaire on account of
Termination of this Agreement for any reason whatsoever and that the Concessionaire or
any shareholder thereof shall not have any further right or claim under any law, treaty,
convention, contract or otherwise.
31.4 Certain limitations on Termination Payment
31.4.1 During the Construction Period, Termination Payment due and payable under this
Agreement shall be computed with reference to the Debt Due in accordance with the
provisions of this Agreement. The Parties also agree that for the purposes of computing

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Termination Payment, the Debt Due shall at no time exceed 85% (eighty five per cent) of
the Total Project Cost.
31.4.2 The amount payable in respect of any Debt Due expressed in foreign currency shall be
computed at the Reference Exchange Rate for conversion into the relevant foreign
currency as on the date of Termination Payment. Provided further that all borrowings in
foreign currency shall be restricted to the financing of Total Project Cost and any
borrowings in excess thereof shall not qualify for computation of Termination Payment. It
is clarified that the rate of conversion of such foreign currency shall be calculated on the
date on which the Agreement is terminated.
31.5 Other rights and obligations of the Authority
Upon Termination for any reason whatsoever, the Authority shall:
(a) Be deemed to have taken possession and control of the Project forthwith;
(b) Take possession and control of all materials, stores, implements, construction
plants and equipment on or about the Site;
(c) Be entitled to restrain the Concessionaire and any person claiming through or
under the Concessionaire from entering upon the Site or any part of the Project;
(d) Require the Concessionaire to comply with the Divestment Requirements set
forth in Clause 32.1; and
(e) succeed upon election by the Authority, without the necessity of any further
action by the Concessionaire, to the interests of the Concessionaire under such of
the Project Agreements as the Authority may in its discretion deem appropriate,
and shall upon such election be liable to the Contractors only for compensation
accruing and becoming due and payable to them under the terms of their
respective Project Agreements from and after the date the Authority elects to
succeed to the interests of the Concessionaire. For the avoidance of doubt, the
Concessionaire acknowledges and agrees that all sums claimed by such
Contractors as being -due and owing for works and services performed or
accruing on account of any act, omission or event prior to such date shall
constitute debt between the Concessionaire and such Contractors, and the
Authority shall not in any manner be liable for such sums. It is further agreed that
in the event the Authority elects to cure any outstanding defaults under such
Project Agreements, the amount expended by the Authority for this purpose shall
be deducted from the Termination Payment.

31.6 Survival of rights

Notwithstanding anything to the contrary contained in this Agreement, but subject to the
provisions of Clause 31.3.5, 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 contract. All rights and obligations
of either Party under this Agreement, including Termination Payments and Divestment
Requirements, shall survive the Termination to the extent such survival is necessary for
giving effect to such rights and obligations.

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ARTICLE 32
DIVESTMENT OF RIGHTS AND INTEREST
32.1 Divestment Requirements
32.1.1 Upon Termination, the Concessionaire shall comply with and conform to the following
Divestment Requirements:
(a) Notify to the Authority forthwith the location and particulars of all Project Assets;
(b) deliver forthwith the actual or constructive possession of the Project, free and
clear of all Encumbrances, save and except to the extent set forth in the
Substitution Agreement;
(c) cure all Project Assets, including the road, bridges, structures and equipment, of
all defects and deficiencies so that the Project is compliant with the Maintenance
Requirements; provided that in the event of Termination during the Construction
Period, all Project Assets shall be handed over on ‘as is where is’ basis after
bringing them to a safe condition;
(d) deliver and transfer relevant records, reports, Intellectual Property and other
licenses pertaining to the Project and its design, engineering, construction,
operation and maintenance, including all programmers and manuals pertaining
thereto, and complete ‘as built’ Drawings as on the Transfer Date. For the
avoidance of doubt, the Concessionaire represents and warrants that the
Intellectual Property delivered hereunder shall be adequate and complete for the
design, engineering, construction, operation and maintenance of the Project and
shall be assigned to the Authority free of any Encumbrance;
(e) Transfer and/or deliver all Applicable Permits to the extent permissible under
Applicable Laws;
(f) execute such deeds of conveyance, documents and other writings as the Authority
may reasonably require for conveying, divesting and assigning all the rights, title
and interest of the Concessionaire in the Project Assets, including manufacturers’
warranties in respect of any plant or equipment and the right to receive
outstanding insurance claims to the extent due and payable to the Authority,
absolutely unto the Authority or its nominee; and
(g) Comply with all other requirements as may be prescribed or required under
Applicable Laws for completing the divestment and assignment of all rights, title
and interest of the Concessionaire in the Project, free from all Encumbrances,
absolutely unto the Authority or to its nominee.
32.1.2 Subject to the exercise by the Authority of its rights under this Agreement or under any of
the Project Agreements to perform or procure the performance by a third party of any of
the obligations of the Concessionaire, the Parties shall continue to perform their
obligations under this Agreement, notwithstanding the issuance of any Termination
Notice, until the Termination of this Agreement becomes effective in accordance with its
terms.

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32.2 Inspection and cure

Not earlier than 90 (ninety) days prior to Termination but not later than 15 (fifteen) days
prior to the effective date of such Termination, the Independent Engineer shall verify,
after giving due notice to the Concessionaire specifying the time, date and place of such
verification and/or inspection, compliance by the Concessionaire with the Maintenance
Requirements, and if required, cause appropriate tests to be carried out at the
Concessionaire’s cost for this purpose. Defaults, if any, in the Maintenance Requirements
shall be cured by the Concessionaire at its cost and the provisions of Article 33 shall
apply, mutatis mutandis, in relation to curing of defects or deficiencies under this Article
32.

32.3 Cooperation and assistance on transfer of Project

32.3.1 The Parties shall cooperate on a best effort basis and take all necessary measures, in good
faith, to achieve a smooth transfer of the Project in accordance with the provisions of this
Agreement so as to protect the safety of and avoid undue delay or inconvenience to the
Users, other members of the public or the lawful occupiers of any part of the Site.
32.3.2 The Parties shall provide to each other, 9 (nine) months prior to the Transfer Date in the
event of Termination by efflux of time and immediately in the event of either Party
conveying to the other Party its intent to issue a Termination Notice, as the case may be,
as much information and advice as is reasonably practicable regarding the proposed
arrangements for operation of the Project following the Transfer Date. The
Concessionaire shall further provide such reasonable advice and assistance as the
Authority, its concessionaire or agent may reasonably require for operation of the Project
until the expiry of 6 (six) months after the Transfer Date.
32.3.3 The Authority shall have the option to purchase or hire from the Concessionaire at a fair
market value and free from any encumbrance all or any part of the plant and machinery
used in connection with the Project but which does not form part of the assets specified in
Clause 32.1.1 and is reasonably required in connection with operation of the Project. For
the avoidance of doubt, in the event of dispute or difference relating to fair market value,
the Dispute Resolution Procedure shall apply.

32.4 Vesting Certificate

The divestment of all rights, title and interest in the Project shall be deemed to be
complete on the date when all of the Divestment Requirements have been fulfilled, and
the Authority shall, without unreasonable delay, thereupon issue a certificate substantially
in the form set forth in Schedule-Q (the “Vesting Certificate”), which will have the
effect of constituting evidence of divestment by the Concessionaire of all of its rights,
title and interest in the Project, and their vesting in the Authority pursuant hereto. It is
expressly agreed that any defect or deficiency in the Divestment Requirements shall not
in any manner be construed or interpreted as restricting the exercise of any rights by the
Authority or its nominee on, or in respect of, the Project on the footing that all
Divestment Requirements have been complied with by the Concessionaire.

32.5 Divestment costs etc.

32.5.1 The Concessionaire shall bear and pay all costs incidental to divestment of all of the
rights, title and interest of the Concessionaire in the Project Assets in favor of the
Authority upon Termination, save and except that all stamp duties payable on any deeds

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or Documents executed by the Concessionaire in connection with such Divestment shall

be borne by the Authority.
32.5.2 In the event of any Dispute relating to matters covered by and under this Article 32, the
Dispute Resolution Procedure shall apply.

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ARTICLE 33
DEFECTS LIABILITY AFTER TERMINATION
33.1 Liability for defects after Termination
The Concessionaire shall be responsible for all defects and deficiencies in the Project for
a period of 120 (one hundred and twenty) days after Termination, and it shall have the
obligation to repair or rectify, at its own cost, all defects and deficiencies observed by the
Independent Engineer in the Project during the aforesaid period. In the event that the
Concessionaire fails to repair or rectify such defect or deficiency within a period of 15
(fifteen) days from the date of notice issued by the Authority in this behalf, the Authority
shall be entitled to get the same repaired or rectified at the Concessionaire’s risk and cost
so as to make the Project conform to the Maintenance Requirements. All costs incurred
by the Authority hereunder shall be reimbursed by the Concessionaire to the Authority
within 15 (fifteen) days of receipt of demand thereof, and in the event of default in
reimbursing such costs, the Authority shall be entitled to recover the same from the funds
retained in the Escrow Account under the provisions of Clause 33.2 or from the
Performance Guarantee provided thereunder. For the avoidance of doubt, the provisions
of this Article 33 shall not apply if Termination occurs prior to COD.
33.2 Retention in Escrow Account
33.2.1 Notwithstanding anything to the contrary contained in this Agreement, but subject to the
provisions of Clause 33.2.3, a sum equal to 15% (fifteen per cent) of the Annuity
Payment due and payable immediately preceding the Transfer Date shall be retained in
the Escrow Account for a period of 120 (one hundred and twenty) days after Termination
for meeting the liabilities, if any, arising out of or in connection with the provisions of
Clause 33.1.
33.2.2 Without prejudice to the provisions of Clause 33.2.1, the Independent Engineer shall
carry out an inspection of the Project at any time between 210 (two hundred and ten) and
180 (one hundred and eighty) days prior to the Termination and if it recommends that the
status of the Project is such that a sum larger than the amount stipulated in Clause 33.2.1
should be retained in the Escrow Account and for a period longer than the aforesaid 120
(one hundred and twenty) days, the amount recommended by the Independent Engineer
shall be retained in the Escrow Account for the period specified by it.
33.2.3 The Concessionaire may, for the performance of its obligations under this Article 33,
provide to the Authority a guarantee from a Bank for a sum equivalent to the amount
determined under Clause 33.2.1 or 33.2.2, as the case may be, and for the period specified
therein, substantially in the form set forth in Schedule-F (the “Performance
Guarantee”), to be modified, mutatis mutandis, for this purpose, and the Authority shall,
without prejudice to its other rights and remedies hereunder or in law, be entitled to
encash and appropriate the required amounts from the Performance Guarantee for
undertaking the repairs or rectification at the Concessionaire’s risk and cost in accordance
with the provisions of this Article 33. Upon furnishing of a Performance Guarantee under
this Clause 33.2.3, the retention of funds in the Escrow Account in terms of Clause 33.2.1
or 33.2.2, as the case may be, shall be dispensed with.

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Part VI
Other Provisions

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ARTICLE 34
ASSIGNMENT AND CHARGES
34.1 Restrictions on assignment and charges
34.1.1 Subject to Clauses 34.2 and 34.3, this Agreement shall not be assigned by the
Concessionaire 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.
34.1.2 Subject to the provisions of Clause 34.2, the Concessionaire shall not create nor permit to
subsist any Encumbrance, or otherwise transfer or dispose of all or any of its rights and
benefits under this Agreement or any Project Agreement to which the Concessionaire is a
party, except with prior consent in writing of the Authority, which consent the Authority
shall be entitled to decline without assigning any reason.

34.2 Permitted assignment and charges

The restraints set forth in Clause 34.1 shall not apply to:
(a) liens arising by operation of law (or by an agreement evidencing the same) in the
ordinary course of business of the Project;
(b) mortgages/pledges/hypothecation of goods/assets other than Project Assets and
their related documents of title, arising or created in the ordinary course of
business of the Project, and as security only for indebtedness to the Senior
Lenders under the Financing Agreements and/or for working capital
arrangements for the Project. For the avoidance of doubt, the Senior Lenders
would be entitled to create a lien on the Escrow Account, subject to and without
prejudice to the rights of the Authority under this Agreement;
(c) assignment of rights, interest and obligations of the Concessionaire to or in favor
of the Lenders’ Representative as nominee and for the benefit of the Senior
Lenders, to the extent covered by and in accordance with the Substitution
Agreement as security for financing provided by Senior Lenders under the
Financing Agreements; and
(d) Liens or encumbrances required by any Applicable Law.

34.3 Substitution Agreement

34.3.1 The Lenders’ Representative, on behalf of Senior Lenders, may exercise the right to
substitute the Concessionaire pursuant to the agreement for substitution of the
Concessionaire (the “Substitution Agreement”) to be entered into amongst the
Concessionaire, the Authority and the Lenders’ Representative, on behalf of Senior
Lenders, substantially in the form set forth in Schedule-R.
34.3.2 Upon substitution of the Concessionaire under and in accordance with the Substitution
Agreement, the Nominated Company substituting the Concessionaire shall be deemed to
be the Concessionaire under this Agreement and shall enjoy all rights and be responsible
for all obligations of the Concessionaire under this Agreement as if it were the
Concessionaire; provided that where the Concessionaire is in breach of this Agreement on
the date of such substitution, the Authority shall by notice grant a Cure Period of 120 (one
hundred and twenty) days to the Concessionaire for curing such breach.

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34.4 Assignment by the Authority

Notwithstanding anything to the contrary contained in this Agreement, the Authority
may, after giving 60 (sixty) days’ notice to the Concessionaire, assign and/ or transfer any
of its rights and benefits and/or obligations under this Agreement to an assignee who is, in
the reasonable opinion of the Authority, capable of fulfilling all of the Authority’s then
outstanding obligations under this Agreement.

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ARTICLE 35
CHANGE IN LAW
35.1 Increase in costs
If as a result of Change in Law, the Concessionaire suffers an increase in costs or
reduction in net after-tax return or other financial burden, the aggregate financial effect of
which exceeds the higher of Rs. 1.56 crore (Rupees one crore and fifty six lakh only)or
2% (two per cent) of the total Annuity Payments in any Accounting Year, the
Concessionaire may so notify the Authority and propose amendments to this Agreement
so as to place the Concessionaire in the same financial position as it would have enjoyed
had there been no such Change in Law resulting in increased costs, reduction in return or
other financial burden as aforesaid. Upon notice by the Concessionaire, the Parties shall
meet, as soon as reasonably practicable as but no later than 30 (thirty) days from the date
of notice and either agree on amendments to this Agreement or on any other mutually
agreed arrangement:
Provided that if no agreement is reached within 90 (ninety) days of the aforesaid notice,
the Concessionaire may by notice require the Authority to pay an amount that would
place the Concessionaire in the same financial position that it would have enjoyed had
there been no such Change in Law, and within 15 (fifteen) days of receipt of such notice,
along with particulars thereof, the Authority shall pay the amount specified therein;
provided that if the Authority shall dispute such claim of the Concessionaire, the same
shall be settled in accordance with the Dispute Resolution Procedure. For the avoidance
of doubt, it is agreed that this Clause 35.1 shall be restricted to changes in law directly
affecting the Concessionaire’s costs of performing its obligations under this Agreement.

35.2 Reduction in costs

If as a result of Change in Law, the Concessionaire benefits from a reduction in costs or
increase in net after-tax return or other financial gains, the aggregate financial effect of
which exceeds the higher of Rs. 1.56 crore (Rupees one crore and fifty six lakh only) or
2% (two per cent) of the total Annuity Payments in any Accounting Year, the Authority
may so notify the Concessionaire and propose amendments to this Agreement so as to
place the Concessionaire in the same financial position as it would have enjoyed had there
been no such Change in Law resulting in decreased costs, increase in return or other
financial gains as aforesaid. Upon notice by the Authority, the Parties shall meet, as soon
as reasonably practicable as but no later than 30 (thirty) days from the date of notice and
either agree on such amendments to this Agreement or on any other mutually agreed
arrangement:
Provided that if no agreement is reached within 90 (ninety) days of the aforesaid notice,
the Authority may by notice require the Concessionaire to pay an amount that would
place the Concessionaire in the same financial position that it would have enjoyed had
there been no such Change in Law, and within 15 (fifteen) days of receipt of such notice,
along with particulars thereof, the Concessionaire shall pay the amount specified therein
to the Authority; provided that if the Concessionaire shall dispute such claim of the
Authority, the same shall be settled in accordance with the Dispute Resolution Procedure.
For the avoidance of doubt, it is agreed that this Clause 35.2 shall be restricted to changes
in law directly affecting the Concessionaire’s costs of performing its obligations under
this Agreement.

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35.3 Protection of NPV

Pursuant to the provisions of Clauses 35.1 and 35.2 and for the purposes of placing the
Concessionaire in the same financial position as it would have enjoyed had there been no
Change in Law affecting the costs, returns or other financial burden or gains, the Parties
shall rely on the Financial Model to establish a net present value (the “NPV”) of the net
cash flow and make necessary adjustments in costs, revenues, compensation or other
relevant parameters, as the case may be, to procure that the NPV of the net cash flow is
the same as it would have been if no Change in Law had occurred. For the avoidance of
doubt, the Parties expressly agree that for determination of NPV, the discount rate to be
used shall be equal to the weighted average rate of interest at which the Concessionaire
has raised the Debt Due under its Financing Agreements.

35.4 Restriction on cash compensation

The Parties acknowledge and agree that the demand for cash compensation under this
Article 35 shall be restricted to the effect of Change in Law during the respective
Accounting Year and shall be made at any time after commencement of such year, but no
later than one year from the close of such Accounting Year. Any demand for cash
compensation payable for and in respect of any subsequent Accounting Year shall be
made after the commencement of the Accounting Year to which the demand pertains, but
no later than 2 (two) years from the close of such Accounting Year.

35.5 [Deleted]

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ARTICLE 36
LIABILITY AND INDEMNITY
36.1 General indemnity
36.1.1 The Concessionaire shall 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 claims from third parties for any loss,
damage, cost and expense of whatever kind and nature, whether arising out of any breach
by the Concessionaire of any of its obligations under this Agreement or any related
agreement or on account of any defect or deficiency in the provision of services by the
Concessionaire to the Authority or to any User, or from any negligence of the
Concessionaire under contract 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.
36.1.2 The Authority shall indemnify, defend, save and hold harmless the Concessionaire
against any and all suits, proceedings, actions, demands and claims from third parties for
any loss, damage', cost and expense of whatever kind and nature arising out of (a) defect
in title and/or the rights of the Authority in the land comprised in the Site, and/or (b)
breach by the Authority of any of its obligations under this Agreement or any related
agreement, which materially and adversely affect the performance by the Concessionaire
of its obligations under this Agreement, save and except that where any such claim, suit,
proceeding, action, and/or demand has arisen due to a negligent act or omission, or breach
of any of its obligations under any provision of this Agreement or any related agreement,
and/or breach of its statutory duty on the part of the Concessionaire, its subsidiaries,
affiliates, contractors, servants or agents, the same shall be the liability of the
Concessionaire.
36.2 Indemnity by the Concessionaire
36.2.1 Without limiting the generality of Clause 36.1, the Concessionaire shall fully indemnify,
hold harm less 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:
(a) Failure of the Concessionaire to comply with Applicable Laws and Applicable
Permits;
(b) Payment of taxes required to be made by the Concessionaire in respect of the
income or other taxes of the Concessionaire’s contractors, suppliers and
representatives; or
(c) Non-payment of amounts due as a result of materials or services furnished to the
Concessionaire or any of its contractors which are payable by the Concessionaire
or any of its contractors.
36.2.2 Without limiting the generality of the provisions of this Article 36, the Concessionaire
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

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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 Concessionaire or by the Concessionaire’s Contractors in performing the
Concessionaire’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 Concessionaire shall make every reasonable effort, by giving a
satisfactory bond or otherwise, to secure the revocation or suspension of the injunction or
restraint order. If, in any such suit, action, claim or proceedings, the Project, or any part
thereof or comprised therein, is held to constitute an infringement and its use is
permanently enjoined, the Concessionaire shall promptly make every reasonable effort to
secure for the Authority a license, at no cost to the Authority, authorizing continued use
of the infringing work. If the Concessionaire is unable to secure such license within a
reasonable time, the Concessionaire 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.

36.3 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 36 (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.

36.4 Defense of claims

36.4.1 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 36, the Indemnifying Party shall be entitled, at its option,
to assume and control the defense 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 defense. 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.

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36.4.2 If the Indemnifying Party has exercised its rights under Clause 36.3, 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).
36.4.3 If the Indemnifying Party exercises its rights under Clause 36.3, 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:
(a) The employment of counsel by such party has been authorized in writing by the
Indemnifying Party;
(b) 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 defense of such action;
(c) the Indemnifying Party shall not, in fact, have employed independent counsel
reasonably satisfactory to the Indemnified Party, to assume the defense of such
action and shall have been so notified by the Indemnified Party; or
(d) The Indemnified Party shall have reasonably concluded and specifically notified
the Indemnifying Party either:
(I) that there may be specific defenses available to it which are different from or
additional to those available to the Indemnifying Party; or
(ii) 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 36.4.3 shall be applicable, the
counsel for the Indemnified Party shall have the right to direct the defense 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.

36.5 No consequential claims

Notwithstanding anything to the contrary contained in this Article 36, 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.

36.6 Survival on Termination

The provisions of this Article 36 shall survive Termination.

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ARTICLE 37
RIGHTS AND TITLE OVER THE SITE
37.1 Licensee rights
For the purpose of this Agreement, the Concessionaire shall have rights to the use of the
Site as a licensee subject to and in accordance with this Agreement, and to this end; it
may regulate the entry and use of the Project by third parties in accordance with and
subject to the provisions of this Agreement.

37.2 Access rights of the Authority and others

37.2.1 The Concessionaire shall allow free access to the Site at all times for the authorized
representatives and vehicles of the Authority and/or its contractors, Senior Lenders, and
the Independent Engineer, and for the persons and vehicles duly authorized by any
Government Instrumentality to inspect the Project and to investigate any matter within
their authority, and upon reasonable notice, the Concessionaire shall provide to such
persons reasonable assistance necessary to carry out their respective duties and functions.
37.2.2 The Concessionaire shall, for the purpose of operation and maintenance of any utility or
road specified in Article 11, allow free access to the Site at all times for the authorized
persons and vehicles of the controlling body of such utility or road.

37.3 Property taxes

All property taxes on the Site shall be payable by the Authority as owner of the Site;
provided, however, that any such taxes payable by the Concessionaire under Applicable
Laws for use of the Site shall not be reimbursed or payable by the Authority. For the
avoidance of doubt, the Parties agree that stamp duties, if any, due and payable on the
grant of license comprising this Agreement shall be paid by the Authority. Provided,
however, that the Authority may require the Concessionaire to pay such stamp duties,
which shall be reimbursed by the Authority to the Concessionaire within 15 (fifteen) days
of receiving the demand thereof.

37.4 Restriction on sub-letting

The Concessionaire shall not sub-license or sub-let the whole or any part of the Site, save
and except as may be expressly set forth in this Agreement; provided that nothing
contained herein shall be construed or interpreted as restricting the right of the
Concessionaire to appoint Contractors for the performance of its obligations hereunder
including for operation and maintenance of all or any part of the Project.

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ARTICLE 38
DISPUTE RESOLUTION
38.1 Dispute Resolution

38.1.1 In the event of 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"), either Party may call upon the Independent Engineer, to mediate and assist the
Parties in arriving at an amicable settlement thereof.

38.1.2 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.

38.1.3 Dispute Resolution Board (DRB)

Failing mediation by the Independent Engineer or without the intervention of the

Independent Engineer, either Party may require such Dispute to be referred to the Dispute
Resolution Board (“DRB”) in accordance with the procedure setforth in Schedule -S to
the Concession Agreement. The decision (s) of the Dispute Resolution Board shall be
binding on both parties who shall promptly give effect to unless and until the same is
revised / modified, as hereinafter provided, in a conciliation/Arbitral Tribunal.

38.2 Conciliation

If either party is dissatisfied with any decision of the DRB, and/or if the DRB is unable to
resolve the dispute, either party may refer the Dispute to arbitration in accordance with
the provisions of clause 38.3 but before resorting to such arbitration, the parties agree to
explore conciliation by the Conciliation Committees of Independent Experts set up by the
Authority in accordance with the procedure decided by the panel of such experts and
notified by the Authority on its website including its subsequent amendments. In the
event of the conciliation proceedings being successful, the parties to the dispute would
sign the written settlement agreement and the conciliators would authenticate the same.
Such settlement agreement would then be binding on the parties in terms of Section 73 of
the Arbitration Act. In case of failure of the conciliation process even at the level of the
Conciliation Committee, either party may refer the Dispute to arbitration in accordance
with the provisions of Clause 38.3.

38.3 Arbitration

38.3.1 Any Dispute which is not resolved amicably by conciliation as provided in Clause 38.2
shall be finally settled by arbitration as set forth below:

i. The Dispute shall be finally referred to Society for Affordable Resolution of

disputes (hereinafter called as SAROD), a Society registered under Society's ACT
1860 vide Registration no. S/RŠ/SW1049/2013 duly represented by Authority and
National Highways Builders Federation (NHBF). The dispute shall be dealt with
in terms of Rules of SAROD. The detailed procedure for conducting Arbitration
shall be governed by the Rules of SAROD and Provisions of Arbitration &

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Conciliation Act, 1996, as amended from time to time. The Dispute shall be
governed by Substantive Law of India.

ii. The appointment of Tribunal, Code of conduct for Arbitrators and fees and
expenses of SAROD and Arbitral Tribunal shall also be governed by the Rules of
SAROD as amended from time to time.

iii. Subject to the provisions of THE LIMITATION ACT, 1963, as amended from
time to time, Arbitration may be commenced during or after the Concession
Period, provided that the obligations of Authority and the Concessionaire shall
not be altered by reason of the Arbitration being conducted during the Concession
Period.

iv. The venue of Arbitration shall be New Delhi or a place selected by governing
body of SAROD and the language for all documents and communications
between the parties shall be English.

v. The expenses incurred by each party in connection with the preparation,

presentation, etc., of arbitral proceedings shall be shared by each party itself.

38.3.2 The arbitrators shall make a reasoned award (the "Award"). Any Award made in any
arbitration held pursuant to this Article 38 shall be final and binding on the Parties as
from the date it is made, and the Concessionaire and the Authority agree and undertake to
carry out such Award without delay.

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

38.3.4 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. Further, the parties
unconditionally acknowledge and agree that notwithstanding any dispute between them,
each party shall proceed with the performance of its respective obligations, pending
resolution of Dispute in accordance with this Article.

38.4 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 Concessionaire and
the Authority, all Disputes arising after such constitution shall, instead of reference to
arbitration under Clause 38.3, 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.

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ARTICLE 39
DISCLOSURE
39.1 Disclosure of Specified Documents
The Concessionaire shall make available for inspection by any person, copies of this
Concession Agreement, the Maintenance Manual, the Maintenance Program, the
Maintenance Requirements and the Safety Requirements (hereinafter collectively referred
to as the “Specified Documents”), free of charge, during normal business hours on all
working days at the Site and the Concessionaire’s Registered Office. The Concessionaire
shall prominently display at the Site, public notices stating the availability of the
Specified Documents for such inspection, and shall provide copies of the same to any
person upon payment of copying charges on a ‘no profit no loss’ basis.

39.2 Disclosure of Documents relating to safety

The Concessionaire shall make available for inspection by any person copies of all
Documents and data relating to safety of the Project, free of charge, during normal
business hours on all working days, at the Concessionaire’s Registered Office. The
Concessionaire shall make copies of the same available to any person upon payment of
copying charges on a ‘no profit no loss’ basis.
39.3 Notwithstanding the provisions of Clauses 39.1 and 39.2, the Authority shall be entitled
to direct the Concessionaire, from time to time, to withhold the disclosure of Protected
Documents (as defined herein below) to any person in pursuance of the aforesaid Clauses.
Explanation:
The expression Protected Documents shall mean such of the Specified Documents or
documents referred to in Clauses 39.1 and 39.2, or portions thereof, the disclosure of
which the Authority is entitled to withhold under the provisions of the Right to
Information Act, 2005.

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ARTICLE 40
REDRESSAL OF PUBLIC GRIEVANCES
40.1 Complaints Register
40.1.1 The Concessionaire shall maintain a public relations office at the Site where it shall keep
a register (the “Complaint Register”) open to public access at all times for recording of
complaints by any person (the “Complainant”). Information relating to the availability
of and access to the Complaint Register shall be prominently displayed by the
Concessionaire at each the Site so as to bring it to the attention of all Users.
40.1.2 The Complaint Register shall be securely bound and each page thereof shall be duly
numbered. It shall have appropriate columns including the complaint number, date, name
and address of the Complainant, substance of the complaint and the action taken by the
Concessionaire. Immediately after a complaint is registered, the Concessionaire shall give
a receipt to the Complainant stating the date and complaint number.
40.1.3 Without prejudice to the provisions of Clauses 40.1.1 and 40.1.2, the Authority may, in
consultation with the Concessionaire, specify the procedure for making complaints in
electronic form and for responses thereto.

40.2 Redressal of complaints

40.2.1 The Concessionaire shall inspect the Complaint Register every day and take prompt and
reasonable action for redressed of each complaint. The action taken shall be briefly noted
in the Complaint Register and a reply stating the particulars thereof shall be sent by the
Concessionaire to the Complainant under a certificate of posting.
40.2.2 Within 7 (seven) days of the close of each month, the Concessionaire shall send to the
Authority and to the Independent Engineer a true photocopy each of all the pages of the
Complaint Register on which any entry has been recorded during the course of such
month, and upon perusal thereof, the Authority may, in its discretion, advise the
Concessionaire to take such further action as the Authority may deem appropriate for a
fair and just redressal of any grievance. The Concessionaire shall consider such advice
and inform the Authority of its decision thereon, and if the Authority is of the opinion that
the Complainant is entitled to further relief, the Authority may advise the Complainant to
seek appropriate remedy under the Consumer Protection Act, 1986, at his own risk and
cost.

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ARTICLE 41
MISCELLANEOUS
41.1 Governing law and jurisdiction
This Agreement shall be construed and interpreted in accordance with and governed by
the laws of India, and the courts in New Delhi shall have exclusive jurisdiction over
matters arising out of or relating to this Agreement.

41.2 Waiver of immunity

Each Party unconditionally and irrevocably:
(a) Agrees that the execution, delivery and performance by it of this Agreement
constitute commercial acts done and performed for commercial purpose;
(b) 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;
(c) 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
(d) consents generally in respect of the enforcement of any judgment 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
judgment that may be made or given in connection therewith).

41.3 Depreciation
For the purposes of depreciation under Applicable Laws, the property representing the
capital investment made by the Concessionaire in the Project shall be deemed to be
acquired and owned by the Concessionaire. For the avoidance of doubt, the Authority
shall not in any manner be liable in respect of any claims for depreciation to be made by
the Concessionaire under Applicable Laws.

41.4 Delayed payments

41.4.1 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. Unless otherwise specified in this Agreement, 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 4% (four per cent) above the daily average Bank Rate, and
recovery thereof shall be without prejudice to the rights of the Parties under this
Agreement including Termination thereof.
41.4.2 Unless otherwise specified, any interest payable under this Agreement shall accrue on a
daily outstanding basis and shall be compounded on the basis of quarterly rests.

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41.5 Waiver
41.5.1 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:
(a) 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;
(b) Shall not be effective unless it is in writing and executed by a duly authorized
representative of the Party; and
(c) Shall not affect the validity or enforceability of this Agreement in any manner.
41.5.2 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.

41.6 Liability for review of Documents and Drawings

Except to the extent expressly provided in this Agreement
(a) no review, comment or approval by the Authority or the Independent Engineer of
any Project Agreement, Document or Drawing submitted by the Concessionaire
nor any observation or inspection of the construction, operation or maintenance of
the Project nor the failure to review, approve, comment, observe or inspect
hereunder shall relieve or absolve the Concessionaire from its obligations, duties
and liabilities under this Agreement, Applicable Laws and Applicable Permits;
and
(b) The Authority shall not be liable to the Concessionaire by reason of any review,
comment, approval, observation or inspection referred to in Sub-clause (a) above.

41.7 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.
41.8 Survival
41.8.1 Termination shall:
(a) Not relieve the Concessionaire or the Authority, as the case may be, of any
obligations hereunder which expressly or by implication survive Termination
hereof; and
(b) 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.

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41.8.2 All obligations surviving Termination shall only survive for a period of 3 (three) years
following the date of such Termination.
41.9 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 Concessionaire arising from the Request for Proposals,
as the case may be, shall be deemed to form part of this Agreement and treated as such.

41.10 Severability
If for any reason whatsoever, 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.

41.11 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 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.

41.12 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 including any Concessionaire’s Contractor.

41.13 Successors and assigns

This Agreement shall be binding upon, and inure to the benefit of the Parties and their
respective successors and permitted assigns.
41.14 Notices
Unless the law requires to follow the specified mode of communication only as
prescribed therein, any notice or other communication to be given by one contracting
Party to the other Party under or in connection with the matters contemplated by this
Agreement shall be routed through NHAI Data Lake under the hand of the authorized
representative and shall:

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(a) in the case of the Concessionaire, be given through NHAI Data Lake and marked
for attention of the person set out below or to such other person as the
Concessionaire may from time to time designate by notice to the Authority;
{Attention:
Designation:
Address:
Fax No:
Email ;}
(b) in the case of the Authority, be given through NHAI Data Lake and be addressed
to the person named below 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 Concessionaire;
{Name:
Designation:
Address:
Fax No:
Email :}; and
(c) any notice or communication by one contracting Party to the other Party, given in
accordance herewith, shall be deemed to have been delivered when given through
or made on the NHAI Data Lake.
41.15 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.
41.16 Counterparts
This Agreement may be executed in two counterparts, each of which, when executed and
delivered, shall constitute an original of this Agreement.
41.17 State Support Agreement
The Concessionaire acknowledges that it has received from the Authority a certified true
copy of the agreement executed between MORTH and the State Government for
providing the support and services specified therein (the “State Support Agreement”),
and the Parties hereto agree to make their best endeavors to procure the support of the
State Government.

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ARTICLE 42
DEFINITIONS
42.1 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;
“Additional Performance Security” shall have the meaning as set forth in Clause 9.7;
“Adjusted Equity” means the Equity funded in Indian Rupees and adjusted on the first
day of the current month (the “Reference Date”), in the manner set forth below, to
reflect the change in its value on account of depreciation and variations in WPI, and for
any Reference Date occurring:
(a) on or before COD, the Adjusted Equity shall be a sum equal to the Equity funded
in Indian Rupees and expended on the Project, revised to the extent of one half of
the variation in WPI occurring between the first day of the month of Appointed
Date and the Reference Date;
“Affected Party” shall have the meaning as set forth in Clause 28.1;
“Agreement” or “Concession Agreement” means this Agreement, its Recitals, and the
Schedules hereto and any amendments thereto made in accordance with the provisions
contained in this Agreement;
“Annuity Payments” shall have the meaning as set forth in Clause 23.6.2;
“Annuity Payment Date” shall have the meaning as set forth in Clause 23.6.2;
“Appendix” shall have the meaning as set forth in Clause 10.3.1;
“Applicable Laws” means all laws, brought into force and effect by GOI or the State
Government including rules, regulations and notifications made thereunder, and
judgments, 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, licenses, permits, authorizations, 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 during the subsistence of this Agreement;
“Appointed Date” means the date on which Financial Close is achieved and every
Condition Precedent is satisfied, in accordance with the provisions of this Agreement, and
such date shall be the date of commencement of the Concession Period;
“Associate” or “Affiliate” means, in relation to either Party {and/or Consortium
Members}, a person who controls, is controlled by, or is under the common control with
such Party {or Consortium Member} (as used in this definition, the expression “control”

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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);
“Authority” shall have the meaning attributed thereto in the array of Parties as set forth
in the Recitals;
“Authority Default” shall have the meaning as set forth in Clause 31.2.1;
“Authority Indemnified Persons” shall have the meaning set forth in Clause 36.1.1;
“Authority Representative” means such person or persons as may be authorized 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 fulfill 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 Senior Lenders,
but does not include a bank in which any Senior Lender has an interest;
“Bank Rate” means the rate of interest specified by the Reserve Bank of India from time
to time in pursuance of section 49 of the Reserve Bank of India Act, 1934 or any
replacement of such Bank Rate for the time being in effect;
“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 and “Bids” shall mean the bids submitted by any and all pre-
qualified bidders;
“Bid Date” means the last date on which the Bid may have been submitted in accordance
with the provisions of the Request for Proposals;
“Bid Project Cost” shall have the meaning as set forth in Clause 23.1;
DELETED
“COD” or “Commercial Operation Date” shall have the meaning as set forth in Clause
15.1.1;
“CPI (IW)” means the Consumer Price Index for Industrial Workers as published by the
Labour Bureau, Government of India and shall include any index which substitutes the
CPI (IW), and any reference to CPI (IW) shall, unless the context otherwise requires, be
construed as a reference to the CPI (IW) published for the period ending with the
preceding quarter;
“Change in Law” means the occurrence of any of the following after the Bid Date:
(a) The enactment of any new Indian law;
(b) The repeal, modification or re-enactment of any existing Indian law;
(c) The commencement of any Indian law which has not entered into effect until the
Bid Date;

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(d) a change in the interpretation or application of any Indian law by a judgment 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 Bid Date; or
(e) Any change in the rates of any of the Taxes that have a direct effect on the
Project;
“Change in Ownership” means a transfer of the direct and/or indirect legal or beneficial
ownership of any shares, or securities convertible into shares, that causes the aggregate
holding of the {selected bidder/ Consortium Members},together with {its/their}
Associates, in the total Equity to decline below 51% (fifty one per cent) thereof during
Construction Period and six months thereafter; provided that any material variation (as
compared to the representations made by the Concessionaire during the bidding process
for the purposes of meeting the minimum conditions of eligibility or for evaluation of its
application or bid, as the case may be,) in the proportion of the equity holding of {the
selected bidder/ any Consortium Member} to the total Equity, if it occurs prior to
completion of a period six months after COD, shall constitute Change in Ownership;
“Change of Scope” shall have the meaning as set forth in Clause 16.1.1;
“Company” means the company acting as the Concessionaire under this Agreement;
“Completion Certificate” shall have the meaning as set forth in Clause 14.2;
"Completion Cost” shall have the meaning as set forth in Clause 23.6.1
“Concession” shall have the meaning as set forth in Clause 3.1.1;
“Concessionaire” shall have the meaning attributed thereto in the array of Parties as set
forth in the Recitals;
“Concession Period” means the period starting on and from Appointed Date and ending
on the Transfer Date. For avoidance of doubt it is clarified that the Concession Period
shall include the Construction Period plus a fixed period of [15 years] of Operation &
Maintenance Period from the COD;
“Concessionaire Default” shall have the meaning as set forth in Clause 31.1.1;
“Conditions Precedent” shall have the meaning as set forth in Clause 4.1.1;
{“Consortium” shall have the meaning as set forth in Recital (D) ;}
{“Consortium Member” means a company specified in Recital (D) as a member of the
Consortium ;}
“Construction Period” means the period beginning from the Appointed Date and ending
on COD;
“Construction Works” means all works and things necessary to complete the Project in
accordance with this Agreement;
“Contractor” means the person or persons, as the case may be, with whom the
Concessionaire has entered into any of the EPC Contract, the O&M Contract or any other
material agreement or contract for construction, operation and/or maintenance of the
Project or matters incidental thereto, but does not include a person who has entered into
an agreement for providing financial assistance to the Concessionaire;

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“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:
(a) 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;
(b) Not relieve any Party from liability to pay Damages or compensation under the
provisions of this Agreement; and
(c) Not in any way be extended by any period of Suspension under this Agreement;
provided that if the cure of any breach by the Concessionaire requires any reasonable
action by the Concessionaire that must be approved by the Authority or the Independent
Engineer hereunder, the applicable Cure Period shall be extended by the period taken by
the Authority or the Independent Engineer to accord their approval;
“DBOT” or “Design, Build, Operate and Transfer” shall have the meaning as set forth in
Recital (A);
“Damages” shall have the meaning as set forth in Sub-clause (w) of Clause 1.2.1;
“Debt Due” means the aggregate of the following sums expressed in Indian Rupees
outstanding on the Transfer Date:
(a) the principal amount of the debt provided by the Senior Lenders under the
Financing Agreements for financing the Total Project Cost (the “principal”) but
excluding any part of the principal that had fallen due for repayment two years
prior to the Transfer Date;
(b) all accrued interest, financing fees and charges payable under the Financing
Agreements on, or in respect of, the debt referred to in Sub-clause (a) above until
the Transfer Date but excluding (i) any interest, fees or charges that had fallen
due one year prior to the Transfer Date, (ii) any penal interest or charges payable
under the Financing Agreements to any Senior Lender, and (iii) any pre-payment
charges in relation to accelerated repayment of debt except where such charges
have arisen due to Authority Default; and
(c) any Subordinated Debt which is included in the Financial Package and disbursed
by lenders for financing the Total Project Cost;
provided that if all or any part of the Debt Due is convertible into Equity at the option of
Senior Lenders and/or the Concessionaire, it shall for the purposes of this Agreement be
deemed to be Debt Due even after such conversion and the principal thereof shall be dealt
with as if such conversion had not been undertaken;
“Debt Service” means the sum of all payments on account of principal, interest,
financing fees and charges due and payable in an Accounting Year to the Senior Lenders
for and in respect of Debt Due under the Financing Agreements;
“Development Period” means the period from the date of this Agreement until the
Appointed Date;
“Dispute” shall have the meaning as set forth in Clause 38.1.1;

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“Dispute Resolution Procedure” means the procedure for resolution of Disputes as set
forth in Article 38;
“Divestment Requirements” means the obligations of the Concessionaire for and in
respect of Termination as set forth in Clause 32.1;
“Document” or “Documentation” means documentation in printed or written form,
or in tapes, discs, drawings, computer programmers, writings, reports, photographs,
films, cassettes, or expressed in any other written, electronic, audio or visual form;
“Drawings” means all of the drawings, calculations and documents pertaining to the
Project as set forth in Schedule-H, and shall include ‘as built’ drawings of the Project;
“EPC Contract” means the engineering, procurement and construction contract or
contracts entered into by the Concessionaire with one or more Contractors for, inter alia,
engineering and construction of the Project in accordance with the provisions of this
Agreement;
“EPC Contractor” means the person with whom the Concessionaire has entered into an
EPC Contract;
“Emergency” means a condition or situation that is likely to endanger the security of the
individuals on or about the Project, 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, 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, where applicable herein but excluding utilities
referred to in Clause 11.1;
“Equity” means the sum expressed in Indian Rupees representing the paid up equity
share capital of the Concessionaire for meeting the equity component of the Total Project
Cost, and for the purposes of this Agreement shall include convertible instruments or
other similar forms of capital, which shall compulsorily convert into equity share capital
of the Company, and any interest-free funds advanced by any shareholder of the
Company for meeting such equity component;
“Escrow Account” means an Account which the Concessionaire shall open and maintain
with a Bank in which all inflows and outflows of cash on account of capital and revenue
receipts and expenditures shall be credited and debited, as the case may be, in accordance
with the provisions of this Agreement, and includes the Sub-Accounts of such Escrow
Account;
“Escrow Agreement” shall have the meaning as set forth in Clause 25.1.2;
“Escrow Bank” shall have the meaning as set forth in Clause 25.1.1;
“Escrow Default” shall have the meaning as set forth in Schedule-O;
“Estimated Project Cost” shall be the cost estimated by the Authority for development
of the Project and provided in the Request for Proposal Volume –I – Instructions to
Bidders.

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“Financial Close” means the fulfillment of all conditions precedent to the initial
availability of funds under the Financing Agreements which shall be communicated by
the Lender’s Representative to the Authority in writing. Such communication from
Lender’s Representative shall be treated as date on which the Financial Close is achieved;
“Financial Default” shall have the meaning as set forth in Schedule-R;
“Financial Model” means the financial model adopted by Senior Lenders, setting forth
the capital and operating costs of the Project and revenues therefrom on the basis of
which financial viability of the Project has been determined by the Senior Lenders, and
includes a description of the assumptions and parameters used for making calculations
and projections therein;
“Financial Package” means the financing package indicating the total capital cost of the
Project and the means of financing thereof, as set forth in the Financial Model and
approved by the Senior Lenders, and includes Equity, all financial assistance specified in
the Financing Agreements and Subordinated Debt, if any;
“Financing Agreements” means the agreements executed by the Concessionaire in
respect of financial assistance to be provided by the Senior Lenders by way of loans,
guarantees, subscription to non-convertible debentures and other debt instruments
including loan agreements, guarantees, notes, debentures, bonds and other debt
instruments, security agreements, and other documents relating to the financing
(including refinancing) of the Total Project Cost, and includes amendments or
modifications made in accordance with Clause 5.2.3;
“Force Majeure” or “Force Majeure Event” shall have the meaning ascribed to it in
Clause 28.1;
“GOI” 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 operator 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 Concessionaire in accordance with this
Agreement, Applicable Laws and Applicable Permits in reliable, safe, economical and
efficient manner and for providing safe, economical, reliable and efficient use of the
Project;
“Government” means the Government of the India;
“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 or the performance of all or any of
the services or obligations of the Concessionaire under or pursuant to this Agreement;
“Indemnified Party” means the Party entitled to the benefit of an indemnity pursuant to
Article 36;
“Indemnifying Party” means the Party obligated to indemnify the other Party pursuant
to Article 36;

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“Independent Engineer” shall have the meaning as set forth in Clause 21.1;
“Indirect Political Event” shall have the meaning as set forth in Clause 28.3;
“Insurance Cover” means the aggregate of the maximum sums insured under the
insurances taken out by the Concessionaire pursuant to Article 26, and includes all
insurances required to be taken out by the Concessionaire under Clause 26.2 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, trademarks, service marks, logos, get-up,
trade names, internet domain names, rights in designs, blue prints, programs 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;
“LOA” or “Letter of Award” means the letter of award referred to in Recital (D);
“Lead Member” shall have the meaning set forth in Recital (D)
“Lenders’ Representative” means the person duly authorized by the Senior Lenders to
act for and on behalf of the Senior Lenders with regard to matters arising out of or in
relation to this Agreement, and includes his successors, assigns and substitutes;
“Licensed Premises” shall have the meaning as set forth in Clause 10.2.2;
“MoRTH” means the Ministry of Road Transport and Highways or any substitute thereof
dealing with highways;
“Maintenance Manual” shall have the meaning as set forth in Clause 17.3.1;
“Maintenance Program” shall have the meaning as set forth in Clause 17.4.1;
“Maintenance Requirements” shall have the meaning as set forth in Clause 17.2;
“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;
“Nominated Company” means a company selected by the Lenders’ Representative and
proposed to the Authority for substituting the Concessionaire in accordance with the
provisions of the Substitution Agreement;
“Non-Political Event” shall have the meaning as set forth in Clause 28.2;
“O&M” means the operation and maintenance of the Project and includes all matters
connected with or incidental to such operation and maintenance, and provision of services
and facilities, in accordance with the provisions of this Agreement;
“O&M Contract” means the operation and maintenance contract that may be entered
into between the Concessionaire and the O&M Contractor for performance of all or any
of the O&M obligations;

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“O&M Contractor” means the person, if any, with whom the Concessionaire has
entered into an O&M Contract for discharging O&M obligations for and on behalf of the
Concessionaire;
“O&M Expenses” means expenses incurred by or on behalf of the Concessionaire or by
the Authority, as the case may be, for all O&M including (a) cost of salaries and other
compensation to employees, (b) cost of materials, supplies, utilities and other services, (c)
premier for insurance, (d) all taxes, duties, cess and fees due and payable for O&M, (e) all
repair, replacement, reconstruction, reinstatement, improvement and maintenance costs,
(f) payments required to be made under the O&M Contract or any other contract in
connection with or incidental to O&M, and (g) all other expenditure required to be
incurred under Applicable Laws, Applicable Permits or this Agreement;
“O&M Inspection Report” shall have the meaning as set forth in Clause 19.2;
“O&M Payments” shall have the meaning as set forth in Clause 23.7.1;
“Operation Period” means the operation and maintenance period of 15 (fifteen) years
commencing from COD and ending on the Transfer Date;
“Parties” means the parties to this Agreement collectively and “Party” shall mean any of
the parties to this Agreement individually;
“Payment Milestone” shall have the meaning as set forth in Clause 23.4;
“Performance Guarantee” shall have the meaning as set forth in Clause 33.2.3;
“Performance Security” shall have the meaning as set forth in Clause 9.1.1;
“Physical Progress” shall mean the physical construction of the Project completed by the
Concessionaire and shall be measured as per the assessment done by the Independent
Engineer in accordance with Clause 23.4 of this Agreement.
“Political Event” shall have the meaning as set forth in Clause 28.4;
“Price Index” shall comprise:
(a) 70% (seventy per cent) of WPI; and
(b) 30% (thirty per cent) of CPI (IW),
Which constituents may be substituted by such alternative index or indices as the Parties
may by mutual consent determine;
“Price Index Multiple” shall have the meaning set forth in 23.2.3;
“Project” means the construction, operation and maintenance of the Project 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 in Site comprising the
Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from
Design Km 55+900/Existing Km 59.250 of NH-71 to Design Km. 92+800/Existing
Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km.
274.231 of Old NH-205 to Design Km 95+717/Existing Km. 275.148 of Old NH-205
in the State of Andhra Pradesh under Bharatmala Pariyojana and all Project Assets,
and its subsequent development and augmentation in accordance with this Agreement;

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 139
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

“Project Agreements” means this Agreement, the Financing Agreements, EPC Contract,
O&M Contract, and any other material agreements or contracts that may be entered into
by the Concessionaire with any person in connection with matters relating to, arising out
of or incidental to the Project, but does not include the Escrow Agreement, Substitution
Agreement, or any agreement for procurement of goods and services involving a
consideration of up to Rs. 25 crore (twenty five crore)9;
“Project Assets” means all physical and other assets relating to and forming part of the
Site including (a) rights over the Site in the form of license, Right of Way or otherwise;
(b) 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, kilometer-stones, toll plaza(s),
electrical systems, communication systems, rest areas, relief centers, maintenance depots
and administrative offices; (c) Project Facilities situated on the Site; (d) all rights of the
Concessionaire under the Project Agreements; (e) financial assets, such as receivables,
security deposits etc.; (f) insurance proceeds; and (g) Applicable Permits and
authorizations relating to or in respect of the Project;
“Project Completion Schedule” means the progressive Project Milestones set forth in
Schedule-G for completion of the Project 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 comprising Four-
Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design
Km 55+900/Existing Km 59.250 of NH-71 to Design Km. 92+800/Existing Km
98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of
Old NH-205 to Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the
State of Andhra Pradesh under Bharatmala Pariyojanaand all Project Assets, and its
subsequent development and augmentation in accordance with this Agreement;
“Project Milestones” means the project milestones as set forth in Schedule-G;
“Provisional Certificate” shall have the meaning as set forth in Clause 14.3;
“Punch List” shall have the meaning ascribed to it in Clause 14.3.1 and, if applicable,
shall only include any or all of the below:

(i) plantation of avenue trees along the edge of the RoW and other landscaping
works within RoW
(ii) completion of work on Provision of Unlined Roadside Drains
(iii) lining of roadside drains in identified stretches
(iv) construction of rest areas, as approved
(v) completion of Fencing Works of RoW
(vi) turfing on embankment slopes in identified sections
(vii) pointing to Stone Masonry works in identified Cross Drainage Structures
(viii) stone Pitching at identified locations

9
This may be fixed at the higher of: (a) 2% (two per cent) of Total Project Cost and (b) Rs. 25 (twenty five) crore.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 140
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

“RBI” means the Reserve Bank of India, as constituted and existing under the Reserve
Bank of India Act, 1934, including any statutory modification or replacement thereof, and
its successors;
“Re.”, “Rs .” or “Rupees” or “Indian Rupees” means the lawful currency of the
Republic of India;
“Reference Exchange Rate” means, in respect of any one currency that is to be
converted into another currency in accordance with the provisions of this Agreement, the
exchange rate as of 12.00 (twelve) noon on the relevant date quoted in Delhi by the State
Bank of India, and in the absence of such rate, the average of similar rates quoted in Delhi
by the Bank of India and the Bank of Baroda;
“Reference Index Date” means, in respect of the specified date or month, as the case
may be, that last day of the preceding month with reference to which the Price Index or
any constituent thereof is revised and in the event such revision has not been notified, the
last such Price Index or any constituent thereof shall be adopted provisionally and used
until the Price Index or such constituent thereof is revised and notified;
“Request for Proposals” or “RFP” shall have the meaning as set forth in Recital (B);
“Right of Way” means the constructive possession of the Site, together with all way
leaves, easements, unrestricted access and other rights of way, howsoever described,
necessary for construction, operation and maintenance of the Project in accordance with
this Agreement;
“Safety Consultant” shall have the meaning as set forth in Clause 18.1.2;
“Safety Requirements” shall have the meaning as set forth in Clause 18.1.1;
“Scheduled Completion Date” shall have the meaning as set forth in Clause 12.3.1;
“Scope of the Project” shall have the meaning as set forth in Clause 2.1;
“Senior Lenders” means the financial institutions, banks, multilateral lending agencies,
trusts, funds and agents or trustees of debenture holders, including their successors and
assignees, who have agreed to guarantee or provide finance to the Concessionaire under
any of the Financing Agreements for meeting all or any part of the Total Project Cost and
who hold paripassu charge on the assets, rights, title and interests of the Concessionaire;
“Site” shall have the meaning as set forth in Clause 10.1;
“Specifications and Standards” means the specifications and standards relating to the
quality, quantity, capacity and other requirements for the Project, as set forth in Schedule-
D, and any modifications thereof, or additions thereto, as included in the design and
engineering for the Project submitted by the Concessionaire to, and expressly approved
by, the Authority;
“State” means the State of Andhra Pradesh, and “State Government” means the
government of that State;
“Statutory Auditors” means a reputable firm of chartered accountants acting as the
statutory auditors of the Concessionaire under the provisions of the Companies Act, 2013,
including any re-enactment or amendment thereof, for the time being in force, and
appointed in accordance with Clause 27.2.1;

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 141
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

“Subordinated Debt” means the aggregate of the following sums expressed in Indian
Rupees or in the currency of debt, as the case may be, outstanding as on the Transfer
Date:
(a) the principal amount of debt provided by lenders or the Concessionaire’s
shareholders for meeting the Total Project Cost and subordinated to the financial
assistance provided by the Senior Lenders; and
(b) all accrued interest on the debt referred to in Sub-clause (a) above but restricted
to the lesser of actual interest rate and a rate equal to 5% (five per cent) above the
Bank Rate in case of loans expressed in Indian Rupees and lesser of the actual
interest rate and 6 (six) month LIBOR (London Inter-Bank Offer Rate) plus 2%
(two per cent) in case of loans expressed in foreign currency, but does not include
any interest that had fallen due 1 (one) year prior to the Transfer Date;
provided that if all or any part of the Subordinated Debt is convertible into Equity at the
option of the lenders and/or the Concessionaire’s shareholders, it shall for the purposes of
this Agreement be deemed to be Subordinated Debt even after such conversion and the
principal thereof shall be dealt with as if such conversion had not been undertaken;
“Substitution Agreement” shall have the meaning as set forth in Clause 34.3.1;
“Suspension” shall have the meaning as set forth in Clause 30.1;
“Taxes” means any Indian taxes including GST, 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 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 and the Concession
hereunder;
“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 the Authority to the
Concessionaire, under and in accordance with the provisions of this Agreement, upon
Termination;
“Tests” means the tests set forth in Schedule-I to determine the completion of the Project
in accordance with the provisions of this Agreement;
“Total Project Cost” means 60 % (sixty percent) of the Bid Project Cost specified in
Clause 23.1;
provided that in the event WPI increases, on an average, by more than 3% (three per cent)
per annum for the period between the Bid Date and COD, the amount hereinbefore
specified shall be increased such that the effect of increase in WPI, in excess of such 3%
(three per cent), is reflected in the Total Project Cost;
provided further that in the event of Termination, the Total Project Cost shall be deemed
to be modified to the extent of variation in WPI or Reference Exchange Rate occurring in

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 142
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

respect of Debt Due, as the case may be, in accordance with the provisions of this
Agreement;
Provided also that the Total Project Cost shall not exceed 60% of the actual capital
expenditure on the Project and capitalized in the books of accounts of the Concessionaire
as certified by the Statutory Auditor. ;
“Transfer Date” means the date on which this Agreement and the Concession hereunder
expires pursuant to the provisions of this Agreement or is terminated by a Termination
Notice;
“User” means a person who uses or intends to use the Project or any part thereof in
accordance with the provisions of this Agreement and Applicable Laws;
“Vesting Certificate” shall have the meaning as set forth in Clause 32.4; and
“WPI” means the Wholesale Price Index for all commodities as published by the
Ministry of 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 latest monthly WPI published no later than 30 (thirty) days prior to the date of
consideration hereunder.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 143
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED AND DELIVERED

THIS AGREEMENT AS OF THE DAY, MONTH AND YEAR FIRST ABOVE
WRITTEN.

SIGNED, SEALED AND DELIVERED For THE COMMON SEAL OF

and on behalf of THE AUTHORITY by: CONCESSIONAIRE has been affixed pursuant
to the resolution passed by the Board of
Directors of the Concessionaire at its meeting
held on the [] day of []20[] hereunto affixed in
the presence of[] Director, who has signed these
Presents in token thereof and, Company
Secretary/Authorized Officer who has
countersigned the same in token thereof:

(Signature) (Signature)

(Designation) (Designation)

(Name) (Name)

(Address) (Address)

(Fax No.) (Fax No.)

(e-mail) (e-mail)

In the presence of:

1. 2.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 144
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

Non-Technical Schedules

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 145
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

SCHEDULE - E
(See Clause 4.1.3)
APPLICABLE PERMITS
1 Applicable Permits
1.1 The Concessionaire shall obtain, as required under Applicable Laws, the following
Applicable Permits on or before the Appointed Date.
Part-I
(a) Permission of the State Government for extraction of boulders from quarries for and in
respect of at least 20% (twenty per cent) of the total length of the Project; and
Part-II
(a) Permission of Village Panchayat and the Pollution Control Board for installation
of crushers;
(b) License for use of explosives;
(c) Permission of the State Government for drawing water from river/reservoir; and
(d) Any other permits or clearances required under Applicable Laws.
1.2 Unless otherwise specified in this Agreement, Applicable Permits, as required, relating to
environmental protection and conservation shall have been procured by the Authority as a
Condition Precedent.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 146
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

SCHEDULE - F
(See Clause 9.1)
PERFORMANCE SECURITY

The Chairman,
National Highways Authority of India
New Delhi
WHEREAS:
(A) ……………….. (the “Concessionaire”) and the Chairman, National Highways Authority
of India (the “Authority”) have entered into a Concession Agreement dated ……………..
(the “Agreement”) whereby the Authority has agreed to the Concessionaire undertaking
Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from
Design Km 55+900/Existing Km 59.250 of NH-71 to Design Km. 92+800/Existing Km
98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of
Old NH-205 to Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State
of Andhra Pradesh under Bharatmala Pariyojana on design, build, operate and transfer
(“Hybrid Annuity”) basis, subject to and in accordance with the provisions of the
Agreement.

(B) The Agreement requires the Concessionaire to furnish a Performance Security to the
Authority in a sum of Rs. ***** cr. (Rupees ***** crore) (the “Guarantee Amount”) as
security for due and faithful performance of its obligations, under and in accordance with
the Agreement, during the Construction Period (as defined in the Agreement).

(C) We, …………………..through our Branch at …………………. (the “Bank”) have

agreed to furnish this Bank Guarantee by way of Performance Security.

NOW, THEREFORE, the Bank hereby, unconditionally and irrevocably, guarantees and
affirms as follows:

1. The Bank hereby unconditionally and irrevocably guarantees the due and faithful
performance of the Concessionaire’s obligations during the Construction Period, under
and in accordance with the Agreement, and agrees and undertakes to pay to the Authority,
upon its mere first written demand, and without any demur, reservation, recourse, contest
or protest, and without any reference to the Concessionaire, such sum or sums upto an
aggregate sum of the Guarantee Amount as the Authority shall claim, without the
Authority being required to prove or to show grounds or reasons for its demand and/or for
the sum specified therein.

2. A letter from the Authority, under the hand of an Officer not below the rank of General
Manager in the National Highways Authority of India, that the Concessionaire has
committed default in the due and faithful performance of all or any of its obligations
under and in accordance with the Agreement shall be conclusive, final and binding on the
Bank. The Bank further agrees that the Authority shall be the sole judge as to whether the
Concessionaire is in default in due and faithful performance of its obligations during the
Construction Period under the Agreement and its decision that the Concessionaire is in
default shall be final, and binding on the Bank, notwithstanding any differences between
the Authority and the Concessionaire, or any dispute between them pending before any
court, tribunal, arbitrators or any other authority or body, or by the discharge of the
Concessionaire for any reason whatsoever.

3. In order to give effect to this Guarantee, the Authority shall be entitled to act as if the

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 147
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

Bank were the principal debtor and any change in the constitution of the Concessionaire
and/or the Bank, whether by their absorption with any other body or corporation or
otherwise, shall not in any way or manner affect the liability or obligation of the Bank
under this Guarantee.

4. It shall not be necessary, and the Bank hereby waives any necessity, for the Authority to
proceed against the Concessionaire before presenting to the Bank its demand under this
Guarantee.

5. The Authority shall have the liberty, without affecting in any manner the liability of the
Bank under this Guarantee, to vary at any time, the terms and conditions of the
Agreement or to extend the time or period for the compliance with, fulfilment and/ or
performance of all or any of the obligations of the Concessionaire contained in the
Agreement or to postpone for any time, and from time to time, any of the rights and
powers exercisable by the Authority against the Concessionaire, and either to enforce or
forbear from enforcing any of the terms and conditions contained in the Agreement
and/or the securities available to the Authority, and the Bank shall not be released from its
liability and obligation under these presents by any exercise by the Authority of the
liberty with reference to the matters aforesaid or by reason of time being given to the
Concessionaire or any other forbearance, indulgence, act or omission on the part of the
Authority or of any other matter or thing whatsoever which under any law relating to
sureties and guarantors would but for this provision have the effect of releasing the Bank
from its liability and obligation under this Guarantee and the Bank hereby waives all of
its rights under any such law.

6. This Guarantee is in addition to and not in substitution of any other guarantee or security
now or which may hereafter be held by the Authority in respect of or relating to the
Agreement or for the fulfilment, compliance and/or performance of all or any of the
obligations of the Concessionaire under the Agreement.

7. Notwithstanding anything contained hereinbefore, the liability of the Bank under this
Guarantee is restricted to the Guarantee Amount and this Guarantee will remain in force
until the earlier of the 1st (first) anniversary of the Appointed Date or compliance of the
conditions specified in paragraph 8 below and unless a demand or claim in writing is
made by the Authority on the Bank under this Guarantee, no later than 6 (six) months
from the date of expiry of this Guarantee, all rights of the Authority under this Guarantee
shall be forfeited and the Bank shall be relieved from its liabilities hereunder.

8. The Performance Security shall cease to be in force and effect when the Concessionaire
shall have expended on Project construction an aggregate sum not less than 30% (thirty
per cent) of the Bid Project cost which is deemed to be Rs.*** cr. (Rupees ***** crore)
for the purposes of this Guarantee, and provided the Concessionaire is not in breach of
this Agreement. Upon request made by the Concessionaire for release of the Performance
Security alongwith the particulars required hereunder, duly certified by a statutory auditor
of the Concessionaire, the Authority shall release the Performance Security forthwith.

9. The Bank undertakes not to revoke this Guarantee during its currency, except with the
previous express consent of the Authority in writing, and declares and warrants that it has
the power to issue this Guarantee and the undersigned has full powers to do so on behalf
of the Bank.

10. Any notice by way of request, demand or otherwise hereunder may be sent by post
addressed to the Bank at its above referred Branch, which shall be deemed to have been
duly authorised to receive such notice and to effect payment thereof forthwith, and if sent

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 148
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

by post it shall be deemed to have been given at the time when it ought to have been
delivered in due course of post and in proving such notice, when given by post, it shall be
sufficient to prove that the envelope containing the notice was posted and a certificate
signed by an officer of the Authority that the envelope was so posted shall be conclusive.

11. This Guarantee shall come into force with immediate effect and shall remain in force and
effect for a period of one year and six months or until it is released earlier by the
Authority pursuant to the provisions of the Agreement.

12. This guarantee shall also be operatable at our ________________branch at New Delhi,
from whom, confirmation regarding the issue of this guarantee or extension/ renewal
thereof shall be made available on demand. In the contingency of this guarantee being
invoked and payment thereunder claimed, the said branch shall accept such invocation
letter and make payment of amounts so demanded under the said invocation.

13. The guarantor/bank hereby confirms that it is on the SFMS (Structural Finance
Messaging System) platform & shall invariably send an advice of this Bank Guarantee to
the designated bank of NHAI. Details of which is as under:

S. No. Particulars Details

1 Name of Beneficiary National Highways

Authority of India

2 Name of Bank Canara Bank

3 Account No. 8598201005819

4 IFSC Code CNRB0008598

Signed and sealed this ………. day of ……….., 20……… at ………..

SIGNED, SEALED AND DELIVERED

For and on behalf of
the BANK by:

(Signature)
(Name)
(Designation)
(Code Number)
(Address)
NOTES:

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 149
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

(i) The bank guarantee should contain the name, designation and code number of the officer(s)
signing the guarantee.
(ii) The address, telephone number and other details of the Head Office of the Bank as well as
of issuing Branch should be mentioned on the covering letter of issuing Branch.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 150
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

Annexure 1 of Schedule F
(See Clause 23.8)
Format for Guarantee for Mobilization Advance

The Chairman,
National Highways Authority of India
New Delhi

WHEREAS:

(A) ……………….. (the “Concessionaire”) and the Chairman, National Highways

Authority of India (the “Authority”) have entered into a Concession Agreement dated
…………….. (the “Agreement”) whereby the Authority has agreed to the
Concessionaire undertake Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-
71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to Design
Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km
94+800/Existing Km. 274.231 of Old NH-205 to Design Km 95+717/Existing Km.
275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala
Pariyojana (“Hybrid Annuity”) basis, subject to and in accordance with the provisions
of the Agreement.

(B) In accordance with Clause 23.8 of the Agreement, the Authority shall make to the
Concessionaire an interest bearing (@ average of one year MCLR of top 5 Scheduled
Commercial Banks10 plus 1.25%, compounded annually ) advance payment (herein after
called “Mobilization Advance”) not exceeding 10% (ten per cent) of the Bid Project Cost;
and that the Mobilization Advance shall be made in [one/two]11 installment(s) subject to
the concessionaire furnishing an irrevocable and unconditional guarantee by a scheduled
bank for an amount equivalent to 110% (one hundred and ten percent) of such installment
to remain effective till the complete and full payment of the installment of the
Mobilization Advance as security for compliance with its obligations in accordance with
the Agreement. The amount of {first/second}12 installment of the Mobilization Advance
is Rs.--------- Cr. (Rupees------ Crore) and the amount of this Guarantee is Rs. ---- Cr.
(Rupees---- crore) (the “Guarantee Amount”)13.

(C) We, …………………..through our branch at …………………. (the “Bank”) have agreed
to furnish this bank guarantee (hereinafter called the “Guarantee”) for the Guarantee
Amount.

NOW, THEREFORE, the Bank hereby, unconditionally and irrevocably, guarantees and
affirms as follows:

1. The Bank hereby unconditionally and irrevocably guarantees the due and faithful
repayment on time of the aforesaid installment of Mobilization Advance under and in
accordance with the Agreement, and agrees and undertakes to pay to the Authority, upon

10
The Authority shall declare the list of top 5 Scheduled Commercial Banks on 1st September every
calendar year based on the balance sheet size as declared in their annual reports. The 1 year MCLR of top 5
Scheduled Commercial Banks shall be taken at the start of every quarter.
11
Please strike out whichever is not applicable as per Clause 23.8 of the Agreement.
12
Please delete in case of mobilization advance is to be made in one/single installment.
13
The Guarantee amount should be equivalent to 110% of the value of the applicable installment.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 151
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

its mere first written demand, and without any demur, reservation, recourse, contest or
protest, and without any reference to the Concessionaire, such sum or sums upto an
aggregate sum of the Guarantee Amount as the Authority shall claim, without the
Authority being required to prove or to show grounds or reasons for its demand and/or for
the sum specified therein.

2. A letter from the Authority, under the hand of an Officer not below the rank of General
Manager in the National Highways Authority of India, that the Concessionaire has
committed default in the due and faithful performance of all or any of its obligations for
the repayment of the installment of the Mobilization Advance under and in accordance
with the Agreement shall be conclusive, final and binding on the Bank. The Bank further
agrees that the Authority shall be the sole judge as to whether the Concessionaire is in
default in due and faithful performance of its obligations during and under the Agreement
and its decision that the Concessionaire is in default shall be final, and binding on the
Bank, notwithstanding any differences between the Authority and the Concessionaire, or
any dispute between them pending before any court, tribunal, arbitrators or any other
authority or body, or by the discharge of the Concessionaire for any reason whatsoever.
3. The Bank further also agrees that the Authority at its option shall be entitled to in enforce
this Guarantee against the Bank as principal debtor, in the first instance without
proceeding against the Concessionaire and notwithstanding any security or other
guarantee that the Authority may have in relation to the Concessionaire’s liability.
4. In order to give effect to this Guarantee, the Authority shall be entitled to act as if the
Bank were the principal debtor and any change in the constitution of the Concessionaire
and/or the Bank, whether by their absorption with any other body or corporation or
otherwise, shall not in any way or manner affect the liability or obligation of the Bank
under this Guarantee.
5. It shall not be necessary, and the Bank hereby waives any necessity, for the Authority to
proceed against the Concessionaire before presenting to the Bank its demand under this
Guarantee.
6. The Authority shall have the liberty, without affecting in any manner the liability of the
Bank under this Guarantee, to vary at any time, the terms and conditions of the
Mobilization Advance or to extend the time or period of its repayment or to postpone
for any time, and from time to time, any of the rights and powers exercisable by the
Authority against the Concessionaire, and either to enforce or forbear from enforcing any
of the terms and conditions contained in the Agreement and/or the securities available to
the Authority, and the Bank shall not be released from its liability and obligation under
these presents by any exercise by the Authority of the liberty with reference to the matters
aforesaid or by reason of time being given to the Concessionaire or any other forbearance,
indulgence, act or omission on the part of the Authority or of any other matter or thing
whatsoever which under any law relating to sureties and guarantors would but for this
provision have the effect of releasing the Bank from its liability and obligation under this
Guarantee and the Bank hereby waives all of its rights under any such law.
7. This Guarantee is in addition to and not in substitution of any other guarantee or security
now or which may hereafter be held by the Authority in respect of or relating to the
Mobilization Advance.
8. Notwithstanding anything contained hereinbefore, the liability of the Bank under this
Guarantee is restricted to the Guarantee Amount and this Guarantee will remain in force

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 152
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

for the period specified in paragraph 9 below and unless a demand or claim in writing is
made by the Authority on the Bank under this Guarantee all rights of the Authority under
this Guarantee shall be forfeited and the Bank shall be relieved from its liabilities
hereunder.
9. The Guarantee shall cease to be in force and effect on _______14 unless a demand or
claim under this Guarantee is made in writing on or before the aforesaid date, the Bank
shall be discharged from its liabilities hereunder.

10. The Bank undertakes not to revoke this Guarantee during its currency, except with the
previous express consent of the Authority in writing, and declares and warrants that it has
the power to issue this Guarantee and the undersigned has full powers to do so on behalf
of the Bank.

11. Any notice by way of request, demand or otherwise hereunder may be sent by post
addressed to the Bank at its above referred Branch, which shall be deemed to have been
duly authorised to receive such notice and to effect payment thereof forthwith, and if sent
by post it shall be deemed to have been given at the time when it ought to have been
delivered in due course of post and in proving such notice, when given by post, it shall be
sufficient to prove that the envelope containing the notice was posted and a certificate
signed by an officer of the Authority that the envelope was so posted shall be conclusive.

12. This Guarantee shall come into force with immediate effect and shall remain in force and
effect up to the date specified in paragraph 9 above or until it is released earlier by the
Authority pursuant to the provisions of the Agreement.

13. This guarantee shall be operatable at our ………….Branch at New Delhi, from whom,
confirmation regarding the issue of this guarantee or extension/renewal thereof shall be
made available on demand. In the contingency of this guarantee being invoked and
payment thereunder claimed, the said branch shall accept such invocation letter and make
payment of amounts so demanded under the said invocation.

14. The guarantor/bank hereby confirms that it is on the SFMS (Structural Finance
Messaging System) platform & shall invariably send an advice of this Bank Guarantee to
the designated bank of NHAI. Details of which is as under:

S. No. Particulars Details

1 Name of Beneficiary National Highways Authority of India

2 Name of Bank Canara Bank

3 Account No. 8598201005819

4 IFSC Code CNRB0008598

14
Initially the validity shall be 60 days after the expected date for tenth payment milestone mentioned in
clause 23.4 of the Agreement. If the Concessionaire submits the Guarantee which has validity period
which is less than that specified herein, then the Concessionaire shall also provide an undertaking to the
Authority which states that the Concessionaire shall get the validity of the Guarantee extended so that the
Guarantee is valid in accordance with this footnote.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 153
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

Signed and sealed this ………. day of ……….., 20……… at ………..

SIGNED, SEALED AND DELIVERED

For and on behalf of

the BANK by:

(Signature)
(Name)
(Designation)
(Code Number)
(Address)
NOTES:

(i) The bank guarantee should contain the name, designation and code number of the officer(s)
signing the guarantee.
(iii) The address, telephone number and other details of the Head Office of the Bank as well as
of issuing Branch should be mentioned on the covering letter of issuing Branch.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 154
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

SCHEDULE - G
(See Clause 12.1)
PROJECT COMPLETION SCHEDULE
1 Project Completion Schedule
During Construction Period, the Concessionaire shall comply with the requirements set
forth in this Schedule-G for each of the Project Milestones and the Scheduled Completion
Date (the “Project Completion Schedule”). Within 15 (fifteen) days of the date of each
Project Milestone, the Concessionaire shall notify the Authority of such compliance along
with necessary particulars thereof.

2 Project Milestone-I
2.1 Project Milestone-I shall occur on the date falling on the 150th (One hundred and fiftieth)
day from the Appointed Date (the “Project Milestone-I”).
2.2 Prior to the occurrence of Project Milestone-I, the Concessionaire shall have expended
not less than 20% (twenty per cent) of the total capital cost set forth in the Financial
Package.
2.3 Prior to the occurrence of Project Milestone –I, the Concessionaire shall have commenced
construction of the Project and achieved 20% Physical Progress.

3 Project Milestone-II
3.1 Project Milestone-II shall occur on the date falling on the 330th (Three hundred and
thirtieth) day from the Appointed Date (the “Project Milestone-II”).
3.2 Prior to the occurrence of Project Milestone-II, the Concessionaire shall have expended
not less than 35% (thirty five per cent)] of the total capital cost set forth in the Financial
Package. Provided, however, that at least 70% (seventy percent) of the expenditure
referred to hereinabove shall have been incurred on physical works which shall not
include advances of any kind to any person or expenditure of any kind on plant and
machinery.
3.3 Prior to the occurrence of Project Milestone –II, the Concessionaire shall have
commenced construction of the Project and achieved 35% Physical Progress
4 Project Milestone-Ill
4.1 Project Milestone-Ill shall occur on the date falling on the 510th (Five hundred and tenth)
day from the Appointed Date (the “Project Milestone-Ill”).
4.2 Prior to the occurrence of Project Milestone-Ill, the Concessionaire shall have
commenced construction of all Project Facilities and expended not less than 75% (seventy
five per cent) of the total capital cost set forth in the Financial Package.
4.3 Prior to the occurrence of Project Milestone –III, the Concessionaire shall have
commenced construction of the Project and achieved 75% Physical Progress
5 Scheduled Completion Date

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 155
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

5.1 The Scheduled Completion Date shall be the 730th (Seven hundred and thirtieth) day from
the Appointed Date.
5.2 On or before the Scheduled Completion Date, the Concessionaire shall have completed
the Project in accordance with this Agreement.
6 Extension of period
Upon extension of any or all of the aforesaid Project Milestones or the Scheduled
Completion Date, as the case may be, under and in accordance with the provisions of this
Agreement, the Project Completion Schedule shall be deemed to have been amended
accordingly.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 156
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

Annexure-I of Schedule G
Format for Contract Price Weightages for Highway Projects with Flexible Pavements
Contract Price Weightages

1.1 The Contract Price for this Agreement is Rs.

1.2 Proportions of the Contract Price for different stages of Construction of the Project Highway
shall be as specified below:

Weightage
in
pe
rc
en
ta
ge
Stage for measurement
to
Item of Physical Unit Qty.
th
Progress
e
Co
nt
ra
ct
Pr
ice
1 2 3 4 5
Road works including culverts, A- Widening and
minor bridges, underpasses, strengthening
overpasses, approaches to of existing road
ROB/RUB/ Major Bridges/ (1) Earthwork up to top
Km [***] [***]
Structures (but excluding of the sub-grade
service roads) (2) Granular work
(sub- base, base,
shoulders)
(a) GSB Km [***] [***]
(b) WMM Km [***] [***]
(3) Shoulders Km [***] [***]
(4) Bituminous work
(a) DBM Km [***] [***]
(b) BC Km [***] [***]
(5) Rigid Pavement
Concrete work Km [***] [***]
(6) Widening and repair
No. [***] [***]
of culverts
(7) Widening and repair
No. [***] [***]
of minor bridges
B- New
realignment/by

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 157
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

pass
(1) Earthwork up to top
Km [***] [***]
of the sub-grade
(2) Granular work
(sub- base, base,
shoulders)
(a) GSB Km [***] [***]
(b) WMM Km [***] [***]
(3) Shoulders Km [***] [***]
(4) Bituminous work
(a) DBM Km [***] [***]
(b) BC Km [***] [***]
(5) Rigid Pavement
Concrete work Km [***] [***]
C- New culverts,
minor bridges,
underpasses,
overpasses on
existing road,
realignments,
bypasses:
(1) Culverts No. [***] [***]
(2) Minor bridges
(a) Foundation No. [***] [***]
(b) Sub-structure No. [***] [***]
(c) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
(3) Cattle/Pedestrian
underpasses
(a) Foundation No. [***] [***]
(b) Sub-structure No. [***] [***]
(c) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
(4) Pedestrian
overpasses
(a) Foundation No. [***] [***]
(b) Sub-structure No. [***] [***]
(c) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
(5) Grade separated
structures
(a) Underpasses

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 158
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

(i) Foundation No. [***] [***]

(ii) Sub-structure No. [***] [***]
(iii) Super-
structure
(including crash No. [***] [***]
barriers etc.
complete)
(b) Overpass
(i) Foundation No. [***] [***]
(ii) Sub-structure No. [***] [***]
(iii) Super-
structure
(including crash No. [***] [***]
barriers etc.
complete)
(c) Flyover
(i) Foundation No. [***] [***]
(ii) Sub-structure No. [***] [***]
(iii) Super-
structure
(including crash No. [***] [***]
barriers etc.
complete)
(d) Foot over Bridge No. [***] [***]
Major Bridge works and A- Widening and
ROB/RUB repairs of
Major Bridges
(1) Foundation
(a) Open Foundation No. [***] [***]
(b) Pile
Foundation/Wel No. [***] [***]
l Foundation
(2) Sub-structure No. [***] [***]
(3) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
B- Widening and
repair of
(a) ROB
(1) Foundation No. [***] [***]
(2) Sub-structure No. [***] [***]
(3) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
(b) RUB

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 159
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

(1) Foundation No. [***] [***]

(2) Sub-structure No. [***] [***]
(3) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
C- New Major Bridges
(1) Foundation No. [***] [***]
(a) Open Foundation No. [***] [***]
(b) Pile
Foundation/Wel No. [***] [***]
l Foundation
(2) Sub-structure No. [***] [***]
(3) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
D- New rail-road
bridges
(a) ROB
(1) Foundation No. [***] [***]
(2) Sub-structure No. [***] [***]
(3) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
(b) RUB
(1) Foundation No. [***] [***]
(2) Sub-structure No. [***] [***]
(3) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
Structures (elevated sections, (1) Foundation No. [***] [***]
reinforced earth) (2) Sub-structure No. [***] [***]
(3) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
(4) Reinforced Earth
Wall (includes
Approaches of
ROB, Sqm [***] [***]
Underpasses,
Overpasses,
Flyover etc.
Electrical and public health EHT line Km [***] [***]
utilities EHT crossings Number [***] [***]

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 160
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

HT/LT line (including Km [***] [***]

Transformers if
any)
HT/LT crossings Number [***] [***]

Water pipeline Km [***] [***]

Water pipeline crossings Number [***] [***]

Sewage line Km [***] [***]

Sewage line crossings Number [***] [***]

Other Works (i) Service roads/ Slip

Km [***] [***]
Roads
(ii) Toll Plaza No. [***] [***]
(iii) Road side drains Km [***] [***]
(iv) Road signs,
markings, km
stones, safety
devices, ….
(a)Road signs,
markings, km Km [***] [***]
stones, ….
(b) Concrete Crash
Barrier/ W-
Beam Crash Km [***] [***]
Barrier in
Road work
(v) Project facilities
(a) Bus bays No. [***] [***]
(b) Truck lay-byes No. [***] [***]
(c) Rest areas No. [***] [***]
(vi) Repairs to
bridges/structu No. [***] [***]
res
(vii) Road side
Km [***] [***]
plantation
(viii) Protection works
(a) Boulder Pitching
Km [***] [***]
on slopes
(b) Toe/Retaining
Km [***] [***]
wall
(ix) Tunnel
(a) Excavation Metre [***] [***]
(b) Construction of
support system
including rock Metre [***] [***]
bolting, lining
etc.
(c) On complete Metre [***] [***]

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 161
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

completion of
tunnel
Lump
s
(x) Miscellaneous [***] [***]
u
m
Total 100.00%

* The above list is illustrative and may require modification as per the scope of the work.

** Measurement of Progress
For example, if the total length of bituminous work to be done is 100 km, the physical progress of
bituminous work shall be determined as follows:
Physical progress of bituminous work =Weightage for
bituminous work x (L'/L)

L = Total length of bituminous work in km

L' = Executed length of bituminous work in km

Similarly, the physical progress for other stages shall be worked out and addition of all will give
the total progress achieved.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 162
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

Annexure-I of Schedule G
Format for Contract Price Weightages for Highway Projects with Rigid Pavements
Contract Price Weightages

1.1 The Contract Price for this Agreement is Rs.

1.2 Proportions of the Contract Price for different stages of Construction of the Project Highway
shall be as specified below:

Weightage
in
Stage for measurement
percentag
Item of Physical Unit Qty.
e to the
Progress
Contract
Price
1 2 3 4 5
Road works including culverts, A- Widening and
minor bridges, underpasses, strengthening
overpasses, approaches to of existing road
ROB/RUB/ Major Bridges/ (1) Earthwork up to top
Km [***] [***]
Structures (but excluding of the sub-grade
service roads) (2) Granular work
(sub- base,
shoulders)
GSB Km [***] [***]
(3) Shoulders Km [***] [***]
(4) Bituminous work Km [***] [***]
(5) Rigid Pavement
(a) DLC Km [***] [***]
(b) PQC Km [***] [***]
(6) Widening and repair
No. [***] [***]
of culverts
(7) Widening and repair
No. [***] [***]
of minor bridges
B- New
realignment/by
pass
(1) Earthwork up to top
Km [***] [***]
of the sub-grade
(2) Granular work
(sub- base,
shoulders)
GSB Km [***] [***]
(3) Shoulders Km [***] [***]
(4) Bituminous work Km [***] [***]
(5) Rigid Pavement
(a) DLC Km [***] [***]
(b) PQC Km [***] [***]

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 163
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

C- New culverts,
minor bridges,
underpasses,
overpasses on
existing road,
realignments,
bypasses:
(1) Culverts No. [***] [***]
(2) Minor bridges
(a) Foundation No. [***] [***]
(b) Sub-structure No. [***] [***]
(c) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
(3) Cattle/Pedestrian
underpasses
(a) Foundation No. [***] [***]
(b) Sub-structure No. [***] [***]
(c) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
(4) Pedestrian
overpasses
(a) Foundation No. [***] [***]
(b) Sub-structure No. [***] [***]
(c) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
(5) Grade separated
structures
(a) Underpasses
(i) Foundation No. [***] [***]
(ii) Sub-structure No. [***] [***]
(iii) Super-
structure
(including crash No. [***] [***]
barriers etc.
complete)
(b) Overpass
(i) Foundation No. [***] [***]
(ii) Sub-structure No. [***] [***]
(iii) Super-
structure
(including crash No. [***] [***]
barriers etc.
complete)

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 164
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

(c) Flyover
(i) Foundation No. [***] [***]
(ii) Sub-structure No. [***] [***]
(iii) Super-
structure
(including crash No. [***] [***]
barriers etc.
complete)
(d) Foot over Bridge No. [***] [***]
Major Bridge works and A- Widening and
ROB/RUB repairs of
Major Bridges
(1) Foundation
(a) Open Foundation No. [***] [***]
(b) Pile
Foundation/Wel No. [***] [***]
l Foundation
(2) Sub-structure No. [***] [***]
(3) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
B- Widening and
repair of
(a) ROB
(1) Foundation No. [***] [***]
(2) Sub-structure No. [***] [***]
(3) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
(b) RUB
(1) Foundation No. [***] [***]
(2) Sub-structure No. [***] [***]
(3) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
C- New Major Bridges
(1) Foundation No. [***] [***]
(a) Open Foundation No. [***] [***]
(b) Pile
Foundation/Wel No. [***] [***]
l Foundation
(2) Sub-structure No. [***] [***]

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 165
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

(3) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
D- New rail-road
bridges
(a) ROB
(1) Foundation No. [***] [***]
(2) Sub-structure No. [***] [***]
(3) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
(b) RUB
(1) Foundation No. [***] [***]
(2) Sub-structure No. [***] [***]
(3) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
Structures (elevated sections, (1) Foundation No. [***] [***]
reinforced earth) (2) Sub-structure No. [***] [***]
(3) Super-structure
(including crash
No. [***] [***]
barriers etc.
complete)
(4) Reinforced Earth
Wall (includes
Approaches of
ROB, Sqm [***] [***]
Underpasses,
Overpasses,
Flyover etc.
EHT line Km [***] [***]
EHT crossings Number [***] [***]
HT/LT line (including Km [***] [***]
Transformers if
Electrical and public health any)
utilities
HT/LT crossings Number [***] [***]
Water pipeline Km [***] [***]
Water pipeline crossings Number [***] [***]
Sewage line Km [***] [***]
Sewage line crossings Number [***] [***]
Other Works (i) Service roads/ Slip
Km [***] [***]
Roads
(ii) Toll Plaza No. [***] [***]
(iii) Road side drains Km [***] [***]
(iv) Road signs,
markings, km
stones, safety

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 166
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

devices, ….

(a)Road signs,
markings, km Km [***] [***]
stones, ….
(b) Concrete Crash
Barrier/ W-
Beam Crash Km [***] [***]
Barrier in
Road work
(v) Project facilities
(a) Bus bays No. [***] [***]
(b) Truck lay-byes No. [***] [***]
(c) Rest areas No. [***] [***]
(vi) Repairs to
bridges/structu No. [***] [***]
res
(vii) Road side
Km [***] [***]
plantation
(viii) Protection works
(a) Boulder Pitching
Km [***] [***]
on slopes
(b) Toe/Retaining
Km [***] [***]
wall
(ix) Tunnel
(a) Excavation Metre [***] [***]
(b) Construction of
support system
including rock Metre [***] [***]
bolting, lining
etc.
(c) On complete
completion of Metre [***] [***]
tunnel
Lump
s
(x) Miscellaneous [***] [***]
u
m
Total 100.00%

* The above list is illustrative and may require modification as per the scope of the work.

** Measurement of Progress
For example, if the total length of bituminous work to be done is 100 km, the physical progress of
bituminous work shall be determined as follows:
Physical progress of bituminous work =Weightage for
bituminous work x (L'/L)

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 167
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

L = Total length of bituminous work in km

L' = Executed length of bituminous work in km

Similarly, the physical progress for other stages shall be worked out and addition of all will give
the total progress achieved.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 168
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

SCHEDULE - H
(See Clause 12.2)
DRAWINGS
1 Drawings
In compliance of the obligations set forth in Clause 12.2 of this Agreement, the
Concessionaire shall furnish to the Independent Engineer, free of cost, all Drawings listed
in Annex-I of this Schedule-H.
2 Additional drawings
If the Independent Engineer determines that for discharging its duties and functions under
this Agreement, it requires any drawings other than those listed in Annex-I, it may by
notice require the Concessionaire to prepare and furnish such drawings forthwith. Upon
receiving a requisition to this effect, the Concessionaire shall promptly prepare and
furnish such drawings to the Independent Engineer, as if such drawings formed part of
Annex-I of this Schedule-H.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 169
 PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

Annex - I (Schedule-H)
List of Drawings
Note: The Authority shall describe in this Annex-I, all the Drawings that the Concessionaire is
required to furnish under Clause 12.2.

 All drawings required for construction of improvement proposal mentioned in Schedule B & C
(Viz. Plan & profile, cross sections, detailed structural drawings, drainage drawings, road
furnitures, junction drawings etc.)

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 170
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

SCHEDULE - I
(See Clause 14.1.2)

TESTS
1 Schedule for Tests
1.1 The Concessionaire shall, no later than 30 (thirty) days prior to the likely completion of
the Project, notify the Independent Engineer and the Authority of its intent to subject the
Project to Tests, and no later than 7 (seven) days prior to the actual date of Tests, furnish
to the Independent Engineer and the Authority detailed inventory and particulars of all
works and equipment forming part of the Project.
1.2 The Concessionaire shall notify the Independent Engineer of its readiness to subject the
Project to Tests at any time after 7 (seven) days from the date of such notice, and upon
receipt of such notice, the Independent Engineer shall, in consultation with the
Concessionaire, determine the date and time for each Test and notify the same to the
Authority who may designate its representative to witness the Tests. The Independent
Engineer shall thereupon conduct the Tests itself or cause any of the Tests to be
conducted in accordance with Article 14 and this Schedule-I.
2 Tests
2.1 In pursuance of the provisions of Clause 14.1.2 of this Agreement, the Independent
Engineer shall conduct, or cause to be conducted, the Tests specified in this Paragraph 2.
2.2 Visual and physical Test: The Independent Engineer shall conduct a visual and physical
check of the Project to determine that all works and equipment forming part thereof
conform to the provisions of this Agreement.
2.3 Test drive: The Independent Engineer shall undertake a test drive of the Project by a Car
and by a fully loaded Truck to determine that the quality of service conforms to the
provisions of the Agreement.
2.4 Riding quality Test: Riding quality of each lane of the carriageway shall be checked with
the help of a calibrated bump integrator and the maximum permissible roughness for
purposes of this Test shall be 1,800 (one thousand and eight hundred) mm for each
kilometer.
2.5 Pavement Composition Test: The thickness and composition of the pavement structure
shall be checked on a sample basis by digging pits to determine conformity of such
pavement structure with Specifications and Standards. The sample shall consist of one pit
in each direction of travel to be chosen at random in each stretch of 5 (five) kilometers of
the Project. The first pit for the sample shall be selected by the Independent Engineer
through an open draw of lots and every fifth kilometer from such first pit shall form part
of the sample for this pavement quality Test.
2.6 Cross-section Test: The cross-sections of the Project shall be checked on a sample basis
through physical measurement of their dimensions for determining the conformity thereof
with Specifications and Standards. For the road portion, the sample shall consist of one
spot to be selected at random in each stretch of 1(one) kilometer of the Project. The first
spot for the sample shall be selected by the Independent Engineer through an open draw
of lots and the spots located at every one kilometer from such first spot shall form part of

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 171
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

the sample. For the bridge portion, one spot shall be selected at random by the
Independent Engineer in each span of the bridge.
2.7 Structural Test for bridges: All major and minor bridges, including over bridges,
underpasses and flyovers, constructed by the Concessionaire shall be subjected to the
Rebound Hammer and Ultrasonic Pulse Velocity tests, to be conducted in accordance
with the procedure described in Special Report No. 17: 1996 of the IRC Highway
Research Board on Non-destructive Testing Techniques, at two spots in every span, to be
chosen at random by the Independent Engineer. Bridges with a span of 15 (fifteen) meters
or more shall also be subjected to load testing.
2.8 Other Tests: The Independent Engineer may require the Concessionaire to carry out or
cause to be carried additional Tests, in accordance with Good Industry Practice, for
determining the compliance of the Project with Specifications and Standards.
2.9 Environmental audit: The Independent Engineer shall carry out a check to determine
conformity of the Project with the environmental requirements set forth in Applicable
Laws and Applicable Permits.
2.10 Safety review: Safety audit of the Project shall have been undertaken by the Safety
Consultant as set forth in Schedule-L, and on the basis of such audit, the Independent
Engineer shall determine conformity of the Project with the provisions of this Agreement.

3 Agency for conducting Tests

All Tests set forth in this Schedule-I shall be conducted by the Independent Engineer or
such other agency or person as it may specify in consultation with the Authority.

4 Completion/Provisional Certificate
Upon successful completion of Tests, the Independent Engineer shall issue the
Completion Certificate or the Provisional Certificate, as the case may be, in accordance
with the provisions of Article 14.

5 Tests during construction

Without prejudice to the provisions of this Schedule-I, tests during construction shall be
conducted In accordance with the provisions of Clause 13.3.1.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 172
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

SCHEDULE - J
(See Clause 14.2 & 14.3)

COMPLETION CERTIFICATE
1 I/We,…………….. (Name of the Independent Engineer), acting as Independent Engineer,
under and in accordance with the Concession Agreement dated ………………..(the
“Agreement”), for development and operation of the Four-Laning of Pileru-Kalur
(Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing
Km 59.250 of NH-71 to Design Km. 92+800/Existing Km 98.325 of NH-71 and
[Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra
Pradesh under Bharatmala Pariyojana (the “Project”) on design, build, operate and
transfer (the “Hybrid Annuity”) basis, through………………(Name of Concessionaire),
hereby certify that the Tests specified in Article 14 and Schedule-I of the Agreement have
been successfully undertaken to determine compliance of the Project with the provisions
of the Agreement, and I/We am/are satisfied that the Project can be safely and reliably
placed in commercial service of the Users thereof.
2 It is certified that Ran Water Harvesting and Artificial recharging arrangements have
been provided by the Concessionaire as per schedule –C of the Concession Agreement,
and are functional. Details (with location Chainage) are as given in Annex______.

3. It is certified that, in terms of the aforesaid Agreement, all works forming part of the Project
have been completed, and the Project is hereby declared fit for entry into commercial
operation on this the day of 20

SIGNED, SEALED AND DELIVERED

For and on behalf of

INDEPENDENT ENGINEER by:

(Signature)
(Name)
(Designation)
(Address)

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 173
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

PROVISIONAL CERTIFICATE
1 I/We,…………… (Name of the Independent Engineer), acting as Independent Engineer,
under and in accordance with the Concession Agreement Dated…………… (the
“Agreement”), for development and operation of the Four-Laning of Pileru-Kalur
(Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing
Km 59.250 of NH-71 to Design Km. 92+800/Existing Km 98.325 of NH-71 and
[Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra
Pradesh under Bharatmala Pariyojana (the “Project”) on design, build, operate and
transfer (the “Hybrid Annuity”) basis through………………(Name of Concessionaire),
hereby certify that the Tests specified in Article 14 and Schedule-I of the Agreement have
been undertaken for the Project/section………………. of the Project to determine
compliance thereof with the provisions of the Agreement.
2 Construction Works forming part of the Project/section of the Project that were found to
be incomplete and/or deficient have been specified in the Punch List appended hereto,
and the Concessionaire has agreed and accepted that it shall complete and/or rectify all
such works in the time and manner set forth in the Agreement. [Some of the incomplete
works have been delayed as a result of reasons attributable to the Authority or due to
Force Majeure and the Provisional Certificate cannot be withheld on this account. Though
the remaining incomplete works have been delayed as a result of reasons attributable to
the Concessionaire,] I/We am/are satisfied that having regard to the nature and extent of
such incomplete works, it would not be prudent to withhold commercial operation of the
Project/section………….. of the Project, pending completion thereof.
3 In view of the foregoing, I/We am/are satisfied that the Project/section of the Project
can be safely and reliably placed in commercial service of the Users thereof, and in terms
of the Agreement, the Project/section of the Project is hereby provisionally declared
fit for entry into commercial operation on this the …… day of………… 20

ACCEPTED, SIGNED, SEALED SIGHNED, SEALED

AND
AND DELIVERED DELIVERED
FOR AND ON BEHALF OF FOR AND ON BEHALF OF

CONCESSIONAIRE by: INDEPENDENT

ENGINEER bY:

(Signature) (Signature)
(Name and Designation) (Name and Signature)
(Address) (Address)


May be struck out if not applicable. Also strike out other parts which are not applicable.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 174
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

SCHEDULE - K
(See Clause 17.2)

MAINTENANCE REQUIREMENTS
1 Maintenance Requirements
1.1 The Concessionaire shall, at all times, operate and maintain the Project in
accordance with the provisions of the Agreement, Applicable Laws and Applicable
Permits. In particular, the Concessionaire shall, at all times during the Operation
Period, conform to the maintenance requirements set forth in this Schedule-K (the
“Maintenance Requirements”).
1.2 The Concessionaire shall repair or rectify any defect or deficiency set forth in
Paragraph 2 of this Schedule-K within the time limit specified therein and any
failure in this behalf shall constitute a breach of the Agreement. Upon occurrence of
any breach hereunder, the Authority shall be entitled to recover Damages as set
forth in Clause 17.8 of the Agreement, without prejudice to the rights of the
Authority under the Agreement, including Termination thereof.

2. Repair/rectification of defects and deficiencies

2.1 The obligations of the Concessionaire in respect of Maintenance Requirements
shall include repair and rectification of the defects and deficiencies specified in
Annex - I of this Schedule - K within the time limit set forth therein.
2.2 The Concessionaire shall at all times maintain an adequate inventory of spares and
consumables to meet the Maintenance Requirements.

3 Other defects and deficiencies

3.1 In respect of any defect or deficiency not specified in Annex - I of this Schedule-K,
the Concessionaire shall undertake repair or rectification in accordance with Good
Industry Practice and within the time limit specified by the Independent Engineer.
3.2 In respect of any defect or deficiency not specified in Annex - I of this Schedule-K,
the Independent Engineer may, in conformity with Good Industry Practice, specify
the permissible limit of deviation or deterioration with reference to the
Specifications and Standards, and any deviation or deterioration beyond the
permissible limit shall be repaired or rectified by the Concessionaire in accordance
with Good Industry Practice and within the time limit specified by the Independent
Engineer.

4 Extension of time limit

Notwithstanding anything to the contrary specified in this Schedule-K, if the nature
and extent of any defect or deficiency justifies more time for its repair or rectification
than the time specified herein, the Concessionaire shall be entitled to additional time
in conformity the Good Industry Practice. Such additional time shall be determined
by the Independent Engineer and conveyed to the Concessionaire and the Authority
with reasons thereof.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 175
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

5 Emergency repairs/restoration
Notwithstanding anything to the contrary contained in this Schedule-K, if any defect,
deficiency or deterioration in the Project poses a hazard to safety or risk of damage to
property, the Concessionaire shall promptly take all reasonable measures for eliminating
or minimizing such danger.

6 Daily Inspection by the Concessionaire

The Concessionaire shall, through its engineer, undertake a daily visual inspection of the
Project and maintain a record thereof in a register to be kept in such form and manner as
the Independent Engineer may specify. Such record shall be kept in safe custody of the
Concessionaire and shall be open to inspection by the Authority and the Independent
Engineer at any time during office hours.

7 Divestment Requirements
All defects and deficiencies specified in this Schedule-K shall be repaired and rectified by
the Concessionaire so that the Project conforms to the Maintenance Requirements on the
Transfer Date.

8 Display of Schedule - K
The Concessionaire shall display copy of this Schedule –K at the site along with the
complaint register stipulated in article 40.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 176
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

ANNEX – I
(Schedule-K)
Repair/Rectification of Defects and Deficiencies
The Concessionaire shall repair and rectify the defects and deficiencies specified in this Annex-I
of Schedule-K within the time limit set forth herein.

ROADS
(a)
[Link]. Nature of defect or deficiency Time limit for Repair/
rectification
Carriageway and paved shoulders
(i) Breach or blockade Temporary restoration of
traffic within 24 hours;
permanent restoration
within 15 days
(ii) Roughness value exceeding 2,750 mm in a stretch of 1 180 days
km (as measured by a standardized rough
meter/bump integrator)
(iii) Pot holes 48 hours
(iv) Cracking in more than 5% of road surface in a stretch of 1 30 days
km
(v) Rutting exceeding 10 mm in more than 2% of road 30 days
surface in a stretch of 1 km (measured with 3 m
straight edge)
(vi) Bleeding/skidding 7 days
(vii) Raveling/Stripping of bitumen surface exceeding 10 Sq m 15 days
(viii) Damage to pavement edges exceeding 100 mm 15 days
(ix) Removal of debris 6 hours
Hard/earth shoulders, side slopes, drains and culverts
(i) Variation by more than 2% in the prescribed slope of 30 days
camber/cross fall
(ii) Edge drop at shoulders exceeding 40 mm 7 days
(iii) Variation by more than 15% in the prescribed side 30 days
(embankment) slopes
(iv) Rain cuts/gullies in slope 7 days
(v) Damage to or silting of culverts and side drains during 7 days
and immediately preceding the rainy season
(vi) Desalting of drains in urban/semi-urban areas
48 hours
Road side furniture including road signs and pavement marking
(i) Damage to shape or position; Poor visibility or loss of 48 hours
retro-reflectivity

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 177
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

Street lighting and telecom (ATMS)

(i) Any major failure of the system 24 hours
(ii) Faults and minor failures 8 hours
Trees and plantation
(i) Obstruction in a minimum head-room of 5 m above 24 hours
carriageway or obstruction in visibility of road
signs
(ii) Deterioration in health of trees and bushes Timely watering and treatment
(iii) Replacement of trees and bushes 90 days
(iv) Removal of vegetation affecting sight line and road 15 days
structures
Rest areas
(i) Cleaning of toilets Every 4 hours
(ii) Defects in electrical, water and sanitary installations 24 hours
Other Project Facilities and Approach roads
(i) Damage or deterioration in Approach Roads, [pedestrian 15 days
facilities, truck lay-bys, bus-bays, bus- shelters,
cattle crossings, Traffic Aid Posts, Medical Aid
Posts, Rain Water Harvesting/ Artificial Recharge
Unit and other works]

BRIDGES
Superstructure of bridges
(i) Cracks
Temporary measures
Within 48 hours
Permanent measures
Within 45 days

(ii) Spalling/scaling 15 days

Foundations of bridges
(i) Scouring and/or cavitation 15 days
Piers, abutments, return walls and wing walls
(i) Cracks and damages including settlement and tilting 30 days
Bearings (metallic) of bridges
(i) Deformation 15 days
Joints in bridges
(i) Loosening and malfunctioning of joints 15 days
Other items relating to bridges
(i) Deforming of pads in elastomeric bearings 7 days
(ii) Gathering of dirt in bearings and joints or clogging of 3 days
spouts, weep holes and vent-holes
(iii) Damage or deterioration in parapets and handrails 3 days

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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(iv) Rain-cuts or erosion of banks of the side slopes of 15 days

approaches
(v) Damage to wearing coat 15days
(vi) Damage or deterioration in approach slabs, pitching, apron, 30 days
toes, floor or guide bunds
(vii) Growth of vegetation affecting the structure or obstructing 15 days
the waterway

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
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SCHEDULE - L
(See Clause 18.1.1)

SAFETY REQUIREMENTS
Guiding principles
1.1 Safety Requirements aim at reduction in injuries, loss of life and damage to property
resulting from accidents on or about the Project, irrespective of the person(s) at fault.
1.2 Users of the Project include motorised and non-motorized vehicles as well as pedestrians
and animals involved in, or associated with accidents. Vulnerable Road Users (VRU)
include pedestrians as well as riders of motorized two-wheelers, bicycles and other
vehicles which do not provide adequate occupant protection.
1.3 Safety Requirements apply to all phases of construction, operation and maintenance with
emphasis on identification of factors associated with accidents, consideration of the same,
and implementation of appropriate remedial measures.
1.4 Safety Requirements include measures associated with traffic management and regulation
such as road signs, pavement marking, traffic control devices, roadside furniture, highway
design elements, enforcement and emergency response.
2 Obligations of the Concessionaire
The Concessionaire shall abide by the following insofar as they relate to safety of the
Users:
(a) Applicable Laws and Applicable Permits;
(b) Manual for Safety in Road Design, issued by MoRTH;
(c) Relevant Standards/Guidelines of IRC relating to safety, road geometries,
bridges, culverts, road signs, pavement marking and roadside furniture;
(d) Provisions of this Agreement; and
(e) Good Industry Practice.

3 Appointment of Safety Consultant

For carrying out safety audit of the Project under and in accordance with this Schedule-L,
the Authority shall appoint from time to time, one or more qualified firms or
organisations as its consultants (the “Safety Consultant”). The Safety Consultant shall
employ a team comprising, without limitation, one road safety expert and one traffic
planner to undertake safety audit of the Project.

4 Safety measures during Development Period

4.1 No later than 90 (ninety) days from the date of this Agreement, the Authority shall
appoint a Safety Consultant for carrying out safety audit at the design stage of the Project.
The Safety Consultant shall collect data on all fatal crashes and other road accidents
which occurred on the Project in the preceding two years by obtaining copies of the
relevant First Information Reports (FIRs) from the police stations having jurisdiction. The
information contained in such FIRs shall be summarised in the form prescribed by the

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
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Authority for this purpose and the data shall be analysed for the type of victims killed or
injured, impacting vehicles, location of accidents and other relevant factors.
4.2 The Concessionaire shall provide to the Safety Consultant, in four copies, the relevant
drawings containing the design details that have a bearing on safety of Users (the “Safety
Drawings”). Such design details shall include horizontal and vertical alignments;
sightlines; layouts of intersections; interchanges; road cross-section; bridges and culverts;
side drains; provision for parked vehicles, slow moving vehicles (tractors, bullock carts,
bicycles) and pedestrians; bus bays; truck lay-bys; and other incidental or consequential
information. The Safety Consultant shall review the design details and forward 3 (three)
copies of the Safety Drawings with its recommendations, if any, to the Independent
Engineer who shall record its comments, if any, and forward one copy each to the
Authority and the Concessionaire.
4.3 The accident data and the design details shall be compiled, analysed and used by the
Safety Consultant for evolving a package of recommendations consisting of safety related
measures for the Project. The safety audit shall be completed in a period of three months
and a report thereof (the “Safety Report”) shall be submitted to the Authority, in 5 (five)
copies. One copy each of the Safety Report shall be forwarded by the Authority to the
Concessionaire and the Independent Engineer forthwith.
4.4 The Concessionaire shall endeavor to incorporate the recommendations of the Safety
Report in the design of the Project, as may reasonably be required in accordance with
Applicable Laws, Applicable Permits, Manuals and Guidelines of the Authority,
Specifications and Standards, and Good Industry Practice. If the Concessionaire does not
agree with any or all of such recommendations, it shall state the reasons thereof and
convey them to the Authority forthwith. In the event that any or all of the works and
services recommended in the Safety Report fall beyond the scope of Schedule-B,
Schedule-C or Schedule-D, the Concessionaire shall make a report thereon and seek the
instructions of the Authority for funding such works in accordance with the provisions of
Article 18.
4.5 Without prejudice to the provisions of Paragraph 4.4, the Concessionaire and the
Independent Engineer shall, within 15 (fifteen) days of receiving the Safety Report, send
their respective comments thereon to the Authority, and no later than 15 (fifteen) days of
receiving such comments, the Authority shall review the same along with the Safety
Report and by notice direct the Concessionaire to carry out any or all of the
recommendations contained therein with such modifications as the Authority may
specify; provided that any works or services required to be undertaken hereunder shall be
governed by the provisions of Article 18.

5 Safety measures during Construction Period

5.1 A Safety Consultant shall be appointed by the Authority, no later than 4 (four) months
prior to the expected COD, for carrying out a safety audit of the completed Construction
Works.
5.2 The Safety Consultant shall collect and analyses the accident data for the preceding two
years in the manner specified in Paragraph 4.1 of this Schedule- L. It shall study the
Safety Report for the Development Period and inspect the Project to assess the adequacy
of safety measures. The Safety Consultant shall complete the safety audit within a period
of 4 (four) months and submit a Safety Report recommending a package of additional

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 181
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road safety measures, if any, that are considered essential for reducing accident hazards
on the Project. Such recommendations shall be processed, mutatis mutandis, and acted
upon in the manner set forth in Paragraphs 4.3, 4.4 and 4.5 of this Schedule-L.
5.3 The Concessionaire shall make adequate arrangements during the Construction Period for
the safety of workers and road Users in accordance with the guidelines of IRC for safety
in construction zones, and notify the Authority and the Independent Engineer about such
arrangements.

6 Safety measures during Operation Period

6.1 The Concessionaire shall develop, implement and administer a surveillance and safety
program for Users, including correction of safety violations and deficiencies and all other
actions necessary to provide a safe environment in accordance with this Agreement.
6.2 [The Concessionaire shall establish a Highway Safety Management Unit (the “HSMU”)
to be functional on and after COD, and designate one of its officers to be in-charge of the
HSMU. Such officer shall have specialist knowledge and training in road safety and
traffic engineering by having attended a course conducted by a reputed organization on
the subject.]
6.3 The Concessionaire shall keep a copy of every FIR recorded by the Police with respect to
any accident occurring on the Project. In addition, the Concessionaire shall also collect
data for all cases of accidents not recorded by the Police but where a vehicle rolled over
or had to be towed away. The information so collected shall be summarized in the form
prescribed by the Authority for this purpose. The Concessionaire shall also record the
exact location of each accident on a road map. The aforesaid data shall be submitted to
the Authority at the conclusion of every quarter and to the Safety Consultant as and when
appointed.
6.4 The Concessionaire shall submit to the Authority before the 31st (thirty first) May of each
year, an annual report (in ten copies) containing, without limitation, a detailed listing and
analysis of all accidents of the preceding Accounting Year and the measures taken by the
Concessionaire pursuant to the provisions of Paragraph 6.1 of this Schedule-L for
averting or minimizing such accidents in future.
6.5 Once in every Accounting Year, a safety audit shall be carried out by the Safety
Consultant to be appointed by the Authority. It shall review and analyses the annual
report and accident data of the preceding year, and undertake an inspection of the Project.
The Safety Consultant shall complete the safety audit within a period of 1 (one) month
and submit a Safety Report recommending specific improvements, if any, required to be
made to the road, bridges, culverts, markings, signs, road furniture and Project Facilities,
including cattle crossings and pedestrian crossings. Such recommendations shall be
processed, mutatis mutandis, and acted upon in the manner set forth in Paragraphs 4.3,
4.4 and 4.5 of this Schedule-L.

7 Costs and expenses

Costs and expenses incurred in connection with the Safety Requirements set forth herein,
including the provisions of Paragraph 2 of this Schedule-L, shall be met in accordance
with Article 18, and in particular, the remuneration of the Safety Consultant, safety audit,
and costs incidental thereto, shall be met by the Concessionaire.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
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SCHEDULE - M
(See Clause 21.1)

SELECTION OF INDEPENDENT ENGINEER

1 Selection of Independent Engineer
1.1 The provisions of the Model Request for Proposals for Selection of Technical
Consultants, issued by the Ministry of Finance, GOI vide OM 24(23)/PF-II/ 2008 dated
21 May 2009, or any substitute thereof shall apply for selection of an experienced firm to
discharge the functions and duties of an Independent Engineer. Provided, however, that
no entity which is owned or controlled by the Authority shall be eligible for appointment
as the Independent Engineer hereunder.
1.2 In the event of termination of an Independent Engineer appointed in accordance with the
provisions of Paragraph 1.1, the Authority shall appoint another firm of Technical
Consultants forthwith or may engage a government-owned entity in accordance with the
provisions of Paragraph 5 of this Schedule-M.
1.3 The Concessionaire may, in its discretion, nominate a representative to participate in the
process of selection to be undertaken by the Authority under this Schedule-M.

2 Terms of Reference
The Terms of Reference for the Independent Engineer shall substantially conform to
Schedule-N.

3 Fee and expenses

3.1 In determining the nature and quantum of duties and services to be performed by the
Independent Engineer during the Development Period and Construction Period, the
Authority shall endeavor that payments to the Independent Engineer on account of fee
and expenses do not exceed 3% (three per cent) of the Bid Project Cost. Payments not
exceeding such 3% (three per cent) shall be borne equally by the Authority and the
Concessionaire in accordance with the provisions of this Agreement and any payments in
excess thereof shall be borne entirely by the Authority.
3.2 The nature and quantum of duties and services to be performed by the Independent
Engineer during the Operation Period shall be determined by the Authority in conformity
with the provisions of this Agreement and with due regard for economy in expenditure.
All payments made to the Independent Engineer on account of fee and expenses during
the Operation Period shall be borne equally by the Authority and the Concessionaire.

4 Selection every three years

No later than 3 (three) years from the date of appointment of Independent Engineer
pursuant to the provisions of Paragraph 1 of this Schedule-M, and every 3 (three) years
thereafter, the Authority shall engage another firm in accordance with the criteria set forth
in this Schedule-M.

5 Appointment of government entity as Independent Engineer

Notwithstanding anything to the contrary contained in this Schedule, the Authority may
in its discretion appoint a government-owned entity as the Independent Engineer;

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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provided that such entity shall be a body corporate having as one of its primary function
the provision of consulting, advisory and supervisory services for engineering projects;
provided further that a government- owned entity which is owned or controlled by the
Authority shall not be eligible for appointment as Independent Engineer.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 184
PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

SCHEDULE - N
(See Clause 21.2.1)
TERMS OF REFERENCE FOR INDEPENDENT ENGINEER
1 Scope
These Terms of Reference for the Independent Engineer (the “TOR”) are being specified
pursuant to the Concession Agreement dated (the “Agreement”), which has been entered
into between the Authority and the “Concessionaire”) for Four-Laning of Pileru-Kalur
(Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing
Km 59.250 of NH-71 to Design Km. 92+800/Existing Km 98.325 of NH-71 and
[Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra
Pradesh under Bharatmala Pariyojanaon design, build, operate and transfer (the
“Hybrid Annuity”) basis, and a copy of which is annexed hereto and marked as Annex-A
to form part of this TOR.

2 Definitions and interpretation

2.1 The words and expressions beginning with or in capital letters used in this TOR and not
defined herein but defined in the Agreement shall have, unless repugnant to the context,
the meaning respectively assigned to them in the Agreement.
2.2 References to Articles, Clauses and Schedules in this TOR shall, except where the context
otherwise requires, be deemed to be references to the Articles, Clauses and Schedules of
the Agreement, and references to Paragraphs shall be deemed to be references to
Paragraphs of this TOR.
2.3 The rules of interpretation stated in Clauses 1.2, 1.3 and 1.4 of the Agreement shall apply,
mutatis mutandis, to this TOR.
3.1 The role and functions of the Independent Engineer shall include the following:
(I) review of the Drawings and Documents as set forth in Paragraph 4;
(ii) Review, inspection and monitoring of Construction Works as set forth in
Paragraph 5; conducting Tests on completion of construction and issuing
Completion/ Provisional Certificate as set forth in Paragraph 5
(iv) Review, inspection and monitoring of O&M as set forth in Paragraph 6;
(v) review, inspection and monitoring of Divestment Requirements as set forth in
Paragraph 7;
(vi) determining, as required under the Agreement, the costs of any works or services
and/or their reasonableness;
(vii) determining, as required under the Agreement, the period or any extension
thereof, for performing any duty or obligation;
(viii) Assisting the Parties in resolution of Disputes as set forth in Paragraph 9; and
(ix) Undertaking all other duties and functions in accordance with the Agreement.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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3.2 The Independent Engineer shall discharge its duties in a fair, impartial and efficient
manner, consistent with the highest standards of professional integrity and Good Industry
Practice.

4 Development Period
4.1 During the Development Period, the Independent Engineer shall undertake a detailed
review of the Drawings to be furnished by the Concessionaire along with supporting data,
including the geo-technical and hydrological investigations, characteristics of materials
from borrow areas and quarry sites, topographical surveys and traffic surveys. The
Independent Engineer shall complete such review and send its comments/observations to
the Authority and the Concessionaire within 15 (fifteen) days of receipt of such
Drawings. In particular, such comments shall specify the conformity or otherwise of such
Drawings with the Scope of the Project and Specifications and Standards.
4.2 The Independent Engineer shall review any modified Drawings or supporting Documents
sent to it by the Concessionaire and furnish its comments within 7 (seven) days of
receiving such Drawings or Documents.
4.3 The Independent Engineer shall review the Drawings sent to it by the Safety Consultant
in accordance with Schedule-L and furnish its comments thereon to the Authority and the
Concessionaire within 7 (seven) days of receiving such Drawings. The Independent
Engineer shall also review the Safety Report and furnish its comments thereon to the
Authority within 15 (fifteen) days of receiving such report.
4.4 The Independent Engineer shall review the detailed design, construction methodology,
quality assurance procedures and the procurement, engineering and construction time
schedule sent to it by the Concessionaire and furnish its comments within 15 (fifteen)
days of receipt thereof.
4.5 Upon reference by the Authority, the Independent Engineer shall review and; comment
on the EPC Contract or any other contract for construction, operation and maintenance of
the Project, and furnish its comments within 7 (seven) days from receipt of such reference
from the Authority.

5 Construction Period
5.1 In respect of the Drawings, Documents and Safety Report received by the Independent
Engineer for its review and comments during the Construction Period, the provisions of
Paragraph 4 shall apply, mutatis mutandis.
5.2 The Independent Engineer shall review the monthly progress report furnished by the
Concessionaire and send its comments thereon to the Authority and the Concessionaire
within 7 (seven) days of receipt of such report.
5.3 The Independent Engineer shall inspect the Construction Works and the Project once
every month, preferably after receipt of the monthly progress report from the
Concessionaire, but before the 20th (twentieth) day of each month in any case, and make
out a report of such inspection (the “Inspection Report”) setting forth an overview of the
status, progress, quality and safety of construction, including the work methodology
adopted, the materials used and their sources, and conformity of Construction Works with
the Scope of the Project and the Specifications and Standards. In a separate section of the
Inspection Report, the Independent Engineer shall describe in reasonable detail the lapses,

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 186
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defects or deficiencies observed by it in the construction of the Project. The Inspection

Report shall also contain a review of the maintenance of the existing lanes in conformity
with the provisions of the Agreement. The Independent Engineer shall send a copy of its
Inspection Report to the Authority and the Concessionaire within 7 (seven) days of the
inspection.
5.4 The Independent Engineer may inspect the Project more than once in a month if any
lapses, defects or deficiencies require such inspections.
5.5 For determining that the Construction Works conform to Specifications and Standards,
the Independent Engineer shall require the Concessionaire to carry out, or cause to be
carried out, tests on a sample basis, to be specified by the Independent Engineer in
accordance with Good Industry Practice for quality assurance. For purposes of this
Paragraph 5.5, the tests specified in the IRC Special Publication-11 (Handbook of Quality
Control for Construction of Roads and Runways) and the Specifications for Road and
Bridge Works issued by the Authority (the “Quality Control Manuals”) or any
modification/substitution thereof shall be deemed to be tests conforming to Good Industry
Practice for quality assurance. The Independent Engineer shall issue necessary directions
to the Concessionaire for ensuring that the tests are conducted in a fair and efficient
manner, and shall monitor and review the results thereof.
5.6 The sample size of the tests, to be specified by the Independent Engineer under Paragraph
5.5, shall comprise 10% (ten per cent) of the quantity or number of tests prescribed for
each category or type of tests in the Quality Control Manuals; provided that the
Independent Engineer may, for reasons to be recorded in writing, increase the aforesaid
sample size by up to 10% (ten per cent) for certain categories or types of tests.
5.7 The timing of tests referred to in Paragraph 5.5, and the criteria for acceptance/ rejection
of their results shall be determined by the Independent Engineer in accordance with the
Quality Control Manuals. The tests shall be undertaken on a random sample basis and
shall be in addition to, and independent of, the tests that may be carried out by the
Concessionaire for its own quality assurance in accordance with Good Industry Practice.
5.8 In the event that the Concessionaire carries out any remedial works for removal or
rectification of any defects or deficiencies, the Independent Engineer shall require the
Concessionaire to carry out, or cause to be carried out, tests to determine that such
remedial works have brought the Construction Works into conformity with the
Specifications and Standards, and the provisions of this Paragraph 5 shall apply to such
tests.
5.9 In the event that the Concessionaire fails to achieve any of the Project Milestones, the
Independent Engineer shall undertake a review of the progress of construction and
identify potential delays, if any. If the Independent Engineer shall determine that
completion of the Project is not feasible within the time specified in the Agreement, it
shall require the Concessionaire to indicate within 15 (fifteen) days the steps proposed to
be taken to expedite progress, and the period within which COD shall be achieved. Upon
receipt of a report from the Concessionaire, the Independent Engineer shall review the
same and send its comments to the Authority and the Concessionaire forthwith.
5.10 If at any time during the Construction Period, the Independent Engineer determines that
the Concessionaire has not made adequate arrangements for the safety of workers and
Users in the zone of construction or that any work is being carried out in a manner that

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 187
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threatens the safety of the workers and the Users, it shall make a recommendation to the
Authority forthwith, identifying the whole or part of the Construction Works that should
be suspended for ensuring safety in respect thereof.
5.11 In the event that the Concessionaire carries out any remedial measures to secure the safety
of suspended works and Users, it may, by notice in writing, require the Independent
Engineer to inspect such works, and within 3 (three) days of receiving such notice, the
Independent Engineer shall inspect the suspended works and make a report to the
Authority forthwith, recommending whether or not such suspension may be revoked by
the Authority.
5.12 If suspension of Construction Works is for reasons not attributable to the Concessionaire,
the Independent Engineer shall determine the extension of dates set forth in the Project
Completion Schedule, to which the Concessionaire is reasonably entitled, and shall notify
the Authority and the Concessionaire of the same.
5.13 The Independent Engineer shall carry out, or cause to be carried out, all the Tests
specified in Schedule-I and issue a Completion Certificate or Provisional Certificate, as
the case may be. For carrying out its functions under this Paragraph 5.13 and all matters
incidental thereto, the Independent Engineer shall act under and in accordance with the
provisions of Article 14 and Schedule-I.
5.14 Upon reference from the Authority, the Independent Engineer shall make a fair and
reasonable assessment of the costs of providing information, works and services as set
forth in Article 16 and certify the reasonableness of such costs for payment by the
Authority to the Concessionaire.
5.15 The Independent Engineer shall aid and advise the Concessionaire in preparing the
Maintenance Manual.
5.16 Upon reference from the Authority, the Independent Engineer shall undertake the
assessment of cost of civil works, as per applicable schedule of rates, for the reduction of
Scope of work as provided in Clause 16.6.1 of the Concession Agreement.

6 Operation Period
6.1 In respect of the Drawings, Documents and Safety Report received by the Independent
Engineer for its review and comments during the Operation Period, the provisions of
Paragraph 4 shall apply, mutatis mutandis.
6.2 The Independent Engineer shall review the annual Maintenance Program furnished by the
Concessionaire and send its comments thereon to the Authority and the Concessionaire
within 15 (fifteen) days of receipt of the Maintenance Program.
6.3 The Independent Engineer shall review the monthly status report furnished by the
Concessionaire and send its comments thereon to the Authority and the Concessionaire
within 7 (seven) days of receipt of such report.
6.4 The Independent Engineer shall inspect the Project once every month, preferably after
receipt of the monthly status report from the Concessionaire, but before the 20th
(twentieth) day of each month in any case, and make out an O&M Inspection Report
setting forth an overview of the status, quality and safety of O&M including its
conformity with the Maintenance Requirements and Safety Requirements. In a separate
section of the O&M Inspection Report, the Independent Engineer shall describe in

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh under Bharatmala Pariyojana 188
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reasonable detail the lapses, defects or deficiencies observed by it in O&M of the Project.
The Independent Engineer shall send a copy of its O&M Inspection Report to the
Authority and the Concessionaire within 7 (seven) days of the inspection.
6.5 The Independent Engineer may inspect the Project more than once in a month, if any
lapses, defects or deficiencies require such inspections.
6.6 The Independent Engineer shall in its O&M Inspection Report specify the tests, if any,
that the Concessionaire shall carry out, or cause to be carried out, for the purpose of
determining that the Project is in conformity with the Maintenance Requirements. It shall
monitor and review the results of such tests and the remedial measures, if any, taken by
the Concessionaire in this behalf.
6.7 In respect of any defect or deficiency referred to in Paragraph 3 of Schedule- K, the
Independent Engineer shall, in conformity with Good Industry Practice, specify the
permissible limit of deviation or deterioration with reference to the Specifications and
Standards and shall also specify the time limit for repair or rectification of any deviation
or deterioration beyond the permissible limit.
6.8 The Independent Engineer shall determine if any delay has occurred in completion of
repair or remedial works in accordance with the Agreement, and shall also determine the
Damages, if any, payable by the Concessionaire to the Authority for such delay.
6.9 The Independent Engineer shall examine the request of the Concessionaire for closure of
any lane(s) of the carriageway for undertaking maintenance/repair thereof, keeping in
view the need to minimize disruption in traffic and the time required for completing such
maintenance/repair in accordance with Good Industry Practice. It shall grant permission
with such modifications, as it may deem necessary, within 3 (three) days of receiving a
request from the Concessionaire. Upon expiry of the permitted period of closure, the
Independent Engineer shall monitor the re-opening of such lane(s), and in case of delay,
determine the Damages payable by the Concessionaire to the Authority under Clause
17.7.
6.10 The Independent Engineer shall monitor and review the curing of defects and deficiencies
by the Concessionaire as set forth in Clause 19.4.
6.11 In the event that the Concessionaire notifies the Independent Engineer of any
modifications that it proposes to make to the Project, the Independent Engineer shall
review the same and send its comments to the Authority and the Concessionaire within 15
(fifteen) days of receiving the proposal.
6.12 The Independent Engineer shall undertake traffic sampling, as and when required by the
Authority, under and in accordance with the provisions of this Agreement.

7 Termination
7.1 At any time, not earlier than 90 (ninety) days prior to Termination but not later than 15
(fifteen) days prior to such Termination, the Independent Engineer shall, in the presence
of a representative of the Concessionaire, inspect the Project for determining compliance
by the Concessionaire with the Divestment Requirements set forth in Clause 32.1 and, if
required, cause tests to be carried out at the Concessionaire’s cost for determining such
compliance. If the Independent Engineer determines that the status of the Project is such
that its repair and rectification would require a larger amount than the sum set forth in

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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Clause 33.2, it shall recommend retention of the required amount in the Escrow Account
and the period of retention thereof.
7.2 The Independent Engineer shall inspect the Project once in every 15 (fifteen) days during
a period of 90 (ninety) days after Termination for determining the liability of the
Concessionaire under Article 33, in respect of the defects or deficiencies specified
therein. If any such defect or deficiency is found by the Independent Engineer, it shall
make a report in reasonable detail and send it forthwith to the Authority and the
Concessionaire.

8 Determination of costs and time

8.1 The Independent Engineer shall determine the costs, and/or their reasonableness, that are
required to be determined by it under the Agreement.
8.2 The Independent Engineer shall determine the period, or any extension thereof, that is
required to be determined by it under the Agreement.

9 Assistance in Dispute resolution

9.1 When called upon by either Party in the event of any Dispute, the Independent Engineer
shall mediate and assist the Parties in arriving at an amicable settlement.
9.2 In the event of any disagreement between the Parties regarding the meaning, scope and
nature of Good Industry Practice, as set forth in any provision of the Agreement, the
Independent Engineer shall specify such meaning, scope and nature by issuing a reasoned
written statement relying on good industry practice and authentic literature.

10 Other duties and functions

The Independent Engineer shall perform all other duties and functions specified in the
Agreement.

11 Miscellaneous
11.1 The Independent Engineer shall notify its programmer of inspection to the Authority and
to the Concessionaire, who may, in their discretion, depute their respective
representatives to be present during the inspection.
11.2 A copy of all communications, comments, instructions, Drawings or Documents sent by
the Independent Engineer to the Concessionaire pursuant to this TOR, and a copy of all
the test results with comments of the Independent Engineer thereon shall be furnished by
the Independent Engineer to the Authority forthwith.
11.3 The Independent Engineer shall obtain, and the Concessionaire shall furnish in
2(two)……….. Copies thereof, all communications and reports required to be submitted,
under this Agreement, by the Concessionaire to the Independent Engineer, whereupon the
Independent Engineer shall send 1 (one) of the copies to the Authority along with its
comments thereon.
11.4 The Independent Engineer shall retain at least one copy each of all Drawings and
Documents received by it, including ‘as-built’ Drawings, and keep them in its safe
custody.

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11.5 Upon completion of its assignment hereunder, the Independent Engineer shall duly
classify and list all Drawings, Documents, results of tests and other relevant records, and
hand them over to the Authority or such other person as the Authority may specify, and
obtain written receipt thereof. Two copies of the said documents shall also be furnished in
their editable digital format or in such other medium or manner as may be acceptable to
the Authority.
11.6 Wherever no period has been specified for delivery of services by the Independent
Engineer, the Independent Engineer shall act with the efficiency and urgency necessary
for discharging its functions in accordance with Good Industry Practice.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
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SCHEDULE -O
(See Clause 25.1.2)
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is entered into on this the day of 20 AMONGST
1 Limited, a company incorporated under the provisions of the Companies Act, 2013 and
having its registered office at (hereinafter referred to as the “Concessionaire” which
expression shall, unless repugnant to the context or meaning thereof, include its
successors, permitted assigns and substitutes);
2 (insert name and particulars of Lenders’ Representative) and having its registered office
at acting for and on behalf of the Senior Lenders as their duly authorized agent with
regard to matters arising out of or in relation to this Agreement (hereinafter referred to as
the “Lenders’ Representative” which expression shall, unless repugnant to the context or
meaning thereof, include its successors and substitutes);
3 (insert name and particulars of the Escrow Bank) and having its registered office at
(hereinafter referred to as the “Escrow Bank” which expression shall, unless repugnant to
the context or meaning thereof, include its successors and substitutes); and
4 THE NATIONAL HIGHWAYS AUTHORITY OF INDIA, established under the
National Highways Authority of India Act 1988, represented by its Chairman and having
its principal offices at G-5 & 6, Sector 10, Dwarka, New Delhi-110075 (hereinafter
referred to as the “Authority” which expression shall, unless repugnant to the context or
meaning thereof, include its administrators, successors and assigns).

WHEREAS:
(A) The Authority has entered into a Concession Agreement dated with the Concessionaire
(the “Concession Agreement”) for Four-Laning of Pileru-Kalur (Tirupati Rural)
Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-
71 to Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from
Design Km 94+800/Existing Km. 274.231 of Old NH-205 to Design Km
95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra Pradesh
under Bharatmala Pariyojana (the “Project”) on design, build, operate and transfer (the
“Hybrid Annuity”) basis, and a copy of which is annexed hereto and marked as Annex-A
to form part of this Agreement.
(B) Senior Lenders have agreed to finance the Project in accordance with the terms and
conditions set forth in the Financing Agreements.
(C) The Concession Agreement requires the Concessionaire to establish an Escrow Account,
inter alia, on the terms and conditions stated therein.
NOW, THEREFORE, in consideration of the foregoing and the respective covenants and
agreements set forth in this Agreement, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the Parties agree as follows:

1 DEFINITIONS AND INTERPRETATION

1.1 Definitions

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

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:
“Agreement” means this Escrow Agreement and any amendment thereto made in
accordance with the provisions contained herein;
“Concession Agreement” means the Concession Agreement referred to in Recital (A)
above and annexed hereto as Annex-A, and shall include all of its Recitals and Schedules
and any amendments made thereto in accordance with the provisions contained in this
behalf therein;
“Cure Period” means the period specified in this Agreement for curing any breach or
default of any provision of this Agreement by the Concessionaire, and shall commence
from the date on which a notice is delivered by the Authority or the Lenders’
Representative, as the case may be, to the Concessionaire asking the latter to cure the
breach or default specified in such notice;
“Escrow Account” means an escrow account established in terms of and under this
Agreement, and shall include the Sub-Accounts;
“Escrow Default” shall have the meaning ascribed thereto in Clause 6.1;
“Lenders’ Representative” means the person referred to as the Lenders’ Representative
in the foregoing Recitals;
“Parties” means the parties to this Agreement collectively and “Party” shall mean any of
the Parties to this Agreement individually;
“Payment Date” means, in relation to any payment specified in Clause 4.1, the date(s)
specified for such payment; and
“Sub-Accounts” means the respective sub-accounts of the Escrow Account, into which
the monies specified in Clause 4.1 would be credited every month and paid out if due, and
if not due in a month then appropriated proportionately in such month and retained in the
respective sub-accounts and paid out therefrom on the Payment Date(s).
1.2 Interpretation
1.2.1 References to Lenders’ Representative shall, unless repugnant to the context or meaning
thereof, mean references to the Lenders’ Representative, acting for and on behalf of
Senior Lenders.
1.2.2 The words and expressions beginning with capital letters and defined in this Agreement
shall have the meaning ascribed thereto herein, and the words and expressions used in this
Agreement and not defined herein but defined in the Concession Agreement shall, unless
repugnant to the context, have the meaning ascribed thereto in the Concession
Agreement.
1.2.3 References to Clauses are, unless stated otherwise, references to Clauses of this
Agreement.
1.2.4 The rules of interpretation stated in Clauses 1.2, 1.3 and 1.4 of the Concession Agreement
shall apply, mutatis mutandis, to this Agreement.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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2 ESCROW ACCOUNT
2.1 Escrow Bank to act as trustee
2.1.1 The Concessionaire hereby appoints the Escrow Bank to act as trustee for the Authority,
the Lenders’ Representative and the Concessionaire in connection herewith and
authorizes the Escrow Bank to exercise such rights, powers, authorities and discretion as
are specifically delegated to the Escrow Bank by the terms hereof together with all such
rights, powers, authorities and discretion as are reasonably incidental hereto, and the
Escrow Bank accepts such appointment pursuant to the terms hereof.
2.1.2 The Concessionaire hereby declares that all rights, title and interest in and to the Escrow
Account shall be vested in the Escrow Bank and held in trust for the Authority, the
Lenders’ Representative and the Concessionaire, and applied in accordance with the
terms of this Agreement. No person other than the Authority, the Lenders’ Representative
and the Concessionaire shall have any rights hereunder as the beneficiaries of or as third
party beneficiaries under this Agreement.
2.2 Acceptance of Escrow Bank
The Escrow Bank hereby agrees to act as such and to accept all payments and other
amounts to be delivered to and held by the Escrow Bank pursuant to the provisions of this
Agreement. The Escrow Bank shall hold and safeguard the Escrow Account during the
term of this Agreement and shall treat the amount in the Escrow Account as monies
deposited by the Concessionaire, Senior Lenders or the Authority with the Escrow Bank.
In performing its functions and duties under this Agreement, the Escrow Bank shall act in
trust for the benefit of, and as agent for, the Authority, the Lenders’ Representative and
the Concessionaire or their nominees, successors or assigns, in accordance with the
provisions of this Agreement.
2.3 Establishment and operation of Escrow Account
2.3.1 Within 30 (thirty) days from the date of this Agreement, and in any case prior to the
Appointed Date, the Concessionaire shall open and establish the Escrow Account with the
(name of Branch) Branch of the Escrow Bank. The Escrow Account shall be denominated
in Rupees.
2.3.2 The Escrow Bank shall maintain the Escrow Account in accordance with the terms of this
Agreement and its usual practices and applicable regulations, and pay the maximum rate
of interest payable to similar customers on the balance in the said account from time to
time.
2.3.3 The Escrow Bank and the Concessionaire shall, after consultation with the Lenders’
Representative, agree on the detailed mandates, terms and conditions, and operating
procedures for the Escrow Account, but in the event of any conflict or inconsistency
between this Agreement and such mandates, terms and conditions, or procedures, this
Agreement shall prevail.
2.4 Escrow Bank’s fee The Escrow Bank shall be entitled to receive its fee and expenses in
an amount, and at such times, as may be agreed between the Escrow Bank and the
Concessionaire. For the avoidance of doubt, such fee and expenses shall form part of the
O&M Expenses and shall be appropriated from the Escrow Account in accordance with
Clause 4.1.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
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2.5 Rights of the Parties Save and except as otherwise provided in the Concession
Agreement, the rights of the Authority, the Lenders’ Representative and the
Concessionaire in the monies held in the Escrow Account are set forth in their entirety in
this Agreement and the Authority, the Lenders’ Representative and the Concessionaire
shall have no other rights against or to the monies in the Escrow Account.
2.6 Substitution of the Concessionaire The Parties hereto acknowledge and agree that upon
substitution of the Concessionaire with the Nominated Company, pursuant to the
Substitution Agreement, it shall be deemed for the purposes of this Agreement that the
Nominated Company is a Party hereto and the Nominated Company shall accordingly be
deemed to have succeeded to the rights and obligations of the Concessionaire under this
Agreement on and with effect from the date of substitution of the Concessionaire with the
Nominated Company.
3 DEPOSITS INTO ESCROW ACCOUNT
3.1 Deposits by the Concessionaire
3.1.1 The Concessionaire agrees and undertakes that it shall deposit into and/or credit the
Escrow Account with:
(a) All monies received in relation to the Project from any source, including the
Senior Lenders, lenders of Subordinated Debt and the Authority;
(b) All funds received by the Concessionaire from its shareholders, in any manner or
form;
(c) Any other revenues; rentals, deposits or capital receipts, as the case may be, from
or in respect of the Project; and
(d) All proceeds received pursuant to any insurance claims.
3.1.2 The Concessionaire may at any time make deposits of its other funds into the Escrow
Account, provided that the provisions of this Agreement shall apply to such deposits.
3.2 Deposits by the Authority
The Authority agrees and undertakes that, as and when due and payable, it shall deposit
into and/or credit the Escrow Account with:
(a) Grant and any other monies disbursed by the Authority to the Concessionaire;
(b) All revenues collected by the Authority in exercise of its rights under the
Concession Agreement; and
(c) Termination Payments
Provided that, notwithstanding the provisions of Clause 4.1.1, the Authority shall be
entitled to appropriate from the aforesaid amounts, any amounts due and payable to it by
the Concessionaire, and the balance remaining shall be deposited into the Escrow
Account.
3.3 Deposits by Senior Lenders
The Lenders’ Representative agrees, confirms and undertakes that the Senior Lenders
shall deposit into and/or credit the Escrow Account with all disbursements made by them

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
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in relation to or in respect of the Project; provided that notwithstanding anything to the

contrary contained in this Agreement, the Senior Lenders shall be entitled to make direct
payments to the EPC Contractor under and in accordance with the express provisions
contained in this behalf in the Financing Agreements.
3.4 Interest on deposits
The Escrow Bank agrees and undertakes that all interest accruing on the balances of the
Escrow Account shall be credited to the Escrow Account; provided that the Escrow Bank
shall be entitled to appropriate therefrom the fee and expenses due to it from the
Concessionaire in relation to the Escrow Account and credit the balance remaining to the
Escrow Account.

4 WITHDRAWALS FROM ESCROW ACCOUNT

4.1 Withdrawals during Concession Period
4.1.1 At the beginning of every month, or at such shorter intervals as the Lenders’
Representative and the Concessionaire may by written instructions determine, the Escrow
Bank shall withdraw amounts from the Escrow Account and appropriate them in the
following order by depositing such amounts in the relevant Sub-Accounts for making due
payments, and if such payments are not due in any month, then retain such monies in such
Sub-Accounts and pay out therefrom on the Payment Date(s):
(a) All taxes due and payable by the Concessionaire for and in respect of the Project;
(b) Deleted;
(c) All payments relating to construction of the Project, subject to and in accordance
with the conditions, if any, set forth in the Financing Agreements;
(d) O&M Expenses, subject to the ceiling, if any, set forth in the Financing
Agreements;
(e) O&M Expenses and other costs and expenses incurred by the Authority in
accordance with the provisions of the Concession Agreement, and certified by the
Authority as due and payable to it;
(f) Any amounts due and payable to the Authority;
(g) Monthly proportionate provision of Debt Service due in an Accounting Year;
(h) all payments and Damages certified by the Authority as due and payable to it by
the Concessionaire pursuant to the Concession Agreement;
(i) Monthly proportionate provision of debt service payments due in an Accounting
Year in respect of Subordinated Debt;
(j) any reserve requirements set forth in the Financing Agreements; and
(k) Balance, if any, in accordance with the instructions of the Concessionaire.
4.1.2 No later than 60 (sixty) days prior to the commencement of each Accounting Year, the
Concessionaire shall provide to the Escrow Bank, with prior written approval of the
Lenders’ Representative, details of the amounts likely to be required for each of the
payment obligations set forth in this Clause 4.1; provided that such amounts may be

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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subsequently modified, with prior written approval of the Lenders’ Representative, if

fresh information received during the course of the year makes such modification
necessary.
4.2 Withdrawals upon Termination upon Termination of the Concession Agreement, all
amounts standing to the credit of the Escrow Account shall, notwithstanding anything in
this Agreement, be appropriated and dealt with in the following order:
(a) All taxes due and payable by the Concessionaire for and in respect of the Project;
(b) Deleted;
(c) 90% (ninety per cent) of Debt Due excluding Subordinated Debt;
(d) all payments and Damages certified by the Authority as due and payable to it by
the Concessionaire pursuant to the Concession Agreement, including any claims
in connection with or arising out of Termination;
(e) Retention and payments arising out of, or in relation to, liability for defects and
deficiencies set forth in Article 33 of the Concession Agreement;
(f) Outstanding Debt Service including the balance of Debt Due;
(g) Outstanding Subordinated Debt;
(h) Incurred or accrued O&M Expenses;
(i) Any other payments required to be made under the Concession Agreement; and
(j) Balance, if any, in accordance with the instructions of the Concessionaire:
Provided that the disbursements specified in Sub-clause (i) of this Clause 4.2
shall be undertaken only after the Vesting Certificate has been issued by the
Authority.

4.3 Application of insufficient funds:

Funds in the Escrow Account shall be applied in the serial order of priority set forth in
Clauses 4.1 and 4.2, as the case may be. If the funds available are not sufficient to meet
all the requirements, the Escrow Bank shall apply such funds in the serial order of priority
until exhaustion thereof.

4.4 Application of insurance proceeds

Notwithstanding anything in this Agreement, the proceeds from all insurance claims,
except life and injury, shall be deposited into and/or credited to the Escrow Account and
utilized for any necessary repair, reconstruction, reinstatement, replacement,
improvement, delivery or installation of the Project, and the balance remaining, if any,
shall be applied in accordance with the provisions contained in this behalf in the
Financing Agreements.

4.5 Withdrawals during Suspension

Notwithstanding anything to the contrary contained in this Agreement, the Authority may
exercise all or any of the rights of the Concessionaire during the period of Suspension
under Article 30 of the Concession Agreement. Any instructions given by the Authority
to the Escrow Bank during such period shall be complied with as if such instructions were

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
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given by the Concessionaire under this Agreement and all actions of the Authority
hereunder shall be deemed to have been taken for and on behalf of the Concessionaire.
5 OBLIGATIONS OF THE ESCROW BANK
5.1 Segregation of funds
Monies and other property received by the Escrow Bank under this Agreement shall, until
used or applied in accordance with this Agreement, be held by the Escrow Bank in trust
for the purposes for which they were received, and shall be segregated from other funds
and property of the Escrow Bank.
5.2 Notification of balances
7(seven) business days prior to each Payment Date (and for this purpose the Escrow Bank
shall be entitled to rely on an affirmation by the Concessionaire and/or the Lenders’
Representative as to the relevant Payment Dates), the Escrow Bank shall notify the
Lenders’ Representative of the balances in the Escrow Account and Sub-Accounts as at
the close of business on the immediately preceding business day.

5.3 Communications and notices

In discharge of its duties and obligations hereunder, the Escrow Bank:
(a) May, in the absence of bad faith or gross negligence on its part, rely as to any
matters of fact which might reasonably be expected to be within the knowledge
of the Concessionaire upon a certificate signed by or on behalf of the
Concessionaire;
(b) may, in the absence of bad faith or gross negligence on its part, rely upon the
authenticity of any communication or document believed by it to be authentic;
(c) shall, within 5 (five) business days after receipt, deliver a copy to the Lenders’
Representative of any notice or document received by it in its capacity as the
Escrow Bank from the Concessionaire or any other person hereunder or in
connection herewith; and
(d) shall, within 5 (five) business days after receipt, deliver a copy to the
Concessionaire of any notice or document received by it from the Lenders’
Representative in connection herewith.
5.4 No set off
The Escrow Bank agrees not to claim or exercise any right of set off, banker’s lien or
other right or remedy with respect to amounts standing to the credit of the Escrow
Account. For the avoidance of doubt, it is hereby acknowledged and agreed by the
Escrow Bank that the monies and properties held by the Escrow Bank in the Escrow
Account shall not be considered as part of the assets of the Escrow Bank and being trust
property, shall in the case of bankruptcy or liquidation of the Escrow Bank, be wholly
excluded from the assets of the Escrow Bank in such bankruptcy or liquidation.
5.5 Regulatory approvals
The Escrow Bank shall use its best efforts to procure, and thereafter maintain and comply
with, all regulatory approvals required for it to establish and operate the Escrow Account.

Four-Laning of Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing Km 59.250 of NH-71 to
Design Km. 92+800/Existing Km 98.325 of NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
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The Escrow Bank represents and warrants that it is not aware of any reason why such
regulatory approvals will not ordinarily be granted to the Escrow Bank.

6 ESCROW DEFAULT
6.1 Escrow Default
6.1.1 Following events shall constitute an event of default by the Concessionaire (an “Escrow
Default”) unless such event of default has occurred as a result of Force Majeure or any act
or omission of the Authority or the Lenders’ Representative:
(a) the Concessionaire commits breach of this Agreement by failing to deposit any
receipts into the Escrow Account as provided herein and fails to cure such breach
by depositing the same into the Escrow Account within a Cure Period of 5 (five)
business days;
(b) the Concessionaire causes the Escrow Bank to transfer funds to any account of
the Concessionaire in breach of the terms of this Agreement and fails to cure such
breach by depositing the relevant funds into the Escrow Account or any Sub-
Account in which such transfer should have been made, within a Cure Period of 5
(five) business days; or
(c) the Concessionaire commits or causes any other breach of the provisions of this
Agreement and fails to cure the same within a Cure Period of 5 (five) business
days.
6.1.2 Upon occurrence of an Escrow Default, the consequences thereof shall be dealt with
under and in accordance with the provisions of the Concession Agreement.
7 TERMINATION OF ESCROW AGREEMENT
7.1 Duration of the Escrow Agreement
This Agreement shall remain in full force and effect so long as any sum remains to be
advanced or is outstanding from the Concessionaire in respect of the debt, guarantee or
financial assistance received by it from the Senior Lenders, or any of its obligations to the
Authority remain to be discharged, unless terminated earlier by consent of all the Parties
or otherwise in accordance with the provisions of this Agreement.
7.2 Substitution of Escrow Bank
The Concessionaire may, by not less than 45 (forty five) days prior notice to the Escrow
Bank, the Authority and the Lenders’ Representative, terminate this Agreement and
appoint a new Escrow Bank, provided that the new Escrow Bank is acceptable to the
Lenders’ Representative and arrangements are made satisfactory to the Lenders’
Representative for transfer of amounts deposited in the Escrow Account to a new Escrow
Account established with the successor Escrow Bank.
The termination of this Agreement shall take effect only upon coming into force of an
Escrow Agreement with the substitute Escrow Bank.

7.3 Closure of Escrow Account

The Escrow Bank shall, at the request of the Concessionaire and the Lenders’
Representative made on or after the payment by the Concessionaire of all outstanding

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amounts under the Concession Agreement and the Financing Agreements including the
payments specified in Clause 4.2, and upon confirmation of receipt of such payments,
close the Escrow Account and Sub- Accounts and pay any amount standing to the credit
thereof to the Concessionaire. Upon closure of the Escrow Account hereunder, the
Escrow Agreement shall be deemed to be terminated.

8 SUPPLEMENTARY ESCROW AGREEMENT

8.1 Supplementary escrow agreement
The Lenders’ Representative and the Concessionaire shall be entitled to enter into a
supplementary escrow agreement with the Escrow Bank providing, inter alia, for detailed
procedures and documentation for withdrawals from Sub- Accounts pursuant to Clause
4.1.1 and for matters not covered under this Agreement such as the rights and obligations
of Senior Lenders and lenders of Subordinated Debt, investment of surplus funds,
restrictions on withdrawals by the Concessionaire in the event of breach of this
Agreement or upon occurrence of an Escrow Default, procedures relating to operation of
the Escrow Account and withdrawal therefrom, reporting requirements and any matters
incidental thereto; provided that such supplementary escrow agreement shall not contain
any provision which is inconsistent with this Agreement and in the event of any conflict
or inconsistency between provisions of this Agreement and such supplementary escrow
agreement, the provisions of this Agreement shall prevail.

9 INDEMNITIES
9.1 General indemnity
9.1.1 The Concessionaire will indemnify, defend and hold the Authority, Escrow Bank and the
Senior Lenders, acting through the Lenders’ Representative, harmless against any and all
proceedings, actions and third party claims for any loss, damage, cost and expense arising
out of any breach by the Concessionaire of any of its obligations under this Agreement or
on account of failure of the Concessionaire to comply with Applicable Laws and
Applicable Permits.
9.1.2 The Authority will indemnify, defend and hold the Concessionaire harmless against any
and all proceedings, actions and third party claims for any loss, damage, cost and expense
arising out of failure of the Authority to fulfil any of its obligations under this Agreement
materially and adversely affecting the performance of the Concessionaire’s obligations
under the Concession Agreement or this Agreement other than any loss, damage, cost and
expense arising out of acts done in discharge of their lawful functions by the Authority,
its officers, servants and agents.
9.1.3 The Escrow Bank will indemnify, defend and hold the Concessionaire harmless against
any and all proceedings, actions and third party claims for any loss, damage, cost and
expense arising out of failure of the Escrow Bank to fulfil its obligations under this
Agreement materially and adversely affecting the performance of the Concessionaire’s
obligations under the Concession Agreement other than any loss, damage, cost and
expense, arising out of acts done in discharge of their lawful functions by the Escrow
Bank, its officers, servants and agents.
9.2 Notice and contest of claims

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

In the event that any Party hereto receives a claim from a third party in respect of which it
is entitled to the benefit of an indemnity under Clause 9.1 or in respect of which it is
entitled to reimbursement (the “Indemnified Party”), it shall notify the other Party
responsible for indemnifying such claim hereunder (the “Indemnifying Party”) within 15
(fifteen) days of receipt of the claim 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, it
may conduct the proceedings in the name of the Indemnified Party and shall bear all costs
involved in contesting the same. The Indemnified Party shall provide all cooperation and
assistance in contesting any claim and shall sign all such writings and documents as the
Indemnifying Party may reasonably require.

10 DISPUTE RESOLUTION
10.1 Dispute resolution
10.1.1 Any dispute, difference or claim arising out of or in connection with this Agreement,
which is not resolved amicably, shall be decided finally by reference to arbitration to a
Board of Arbitrators comprising one nominee of each Party to the dispute, and where the
number of such nominees is an even number, the nominees shall elect another person to
such Board. Such arbitration shall be held in accordance with the Rules of Arbitration of
the International Centre for Alternative Dispute Resolution, New Delhi (the “Rules”) or
such other rules as may be mutually agreed by the Parties, and shall be subject to the
provisions of the Arbitration and Conciliation Act, 1996.
10.1.2 The Arbitrators shall issue a reasoned award and such award shall be final and binding on
the Parties. The place of arbitration shall be the capital of the State and the language of
arbitration shall be English.

11. MISCELLANEOUS PROVISIONS

11.1 Governing law and jurisdiction
This Agreement shall be construed and interpreted in accordance with and governed by
the laws of India, and the courts in the State shall have jurisdiction over all matters arising
out of or relating to this Agreement.
11.2 Waiver of sovereign immunity The Authority unconditionally and irrevocably:
(a) agrees that the execution, delivery and performance by it of this Agreement constitute
commercial acts done and performed for commercial purpose;
(b) 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 Authority with respect to its
assets;
(c) 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
(d) consents generally in respect of the enforcement of any judgment 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

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

execution against it or in respect of any assets, property or revenues whatsoever

irrespective of their use or intended use of any order or judgment that may be made or
given in connection therewith).
11.3 Priority of agreements
In the event of any conflict between the Concession Agreement and this Agreement, the
provisions contained in the Concession Agreement shall prevail over this Agreement.
11.4 Alteration of terms
All additions, amendments, modifications and variations to this Agreement shall be
effectual and binding only if in writing and signed by the duly authorized representatives
of the Parties.
11.5 Waiver
11.5.1 Waiver by any Party of a default by another Party in the observance and performance of
any provision of or obligations under this Agreement:
(a) 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;
(b) shall not be effective unless it is in writing and executed by a duly authorized
representative of the Party; and
(c) shall not affect the validity or enforceability of this Agreement in any manner.
11.5.2 Neither the failure by any 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 any Party to another Party shall be treated or deemed as
waiver of such breach or acceptance of any variation or the relinquishment of any such
right hereunder.
11.6 No third party beneficiaries This Agreement is solely for the benefit of the Parties and no
other person or entity shall have any rights hereunder.
11.7 Survival
11.7.1 Termination of this Agreement:
(a) shall not relieve the Parties of any obligations hereunder which expressly or by
implication survive termination hereof; and
(b) except as otherwise provided in any provision of this Agreement expressly
limiting the liability of either Party, shall 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.
11.7.2 All obligations surviving the cancellation, expiration or termination of this Agreement
shall only survive for a period of 3 (three) years following the date of such termination or
expiry of this Agreement.
11.8 Severability

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

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 dispute resolution under Clause 10.1 of this
Agreement or otherwise.
11.9 Successors and assigns
This Agreement shall be binding on and shall inure to the benefit of the Parties and their
respective successors and permitted assigns.
11.10 Notices
All notices or other communications to be given or made under this Agreement shall be in
writing and shall either be delivered personally or sent by courier or registered post with
an additional copy to be sent by facsimile or e-mail. The address for service of each Party,
its facsimile number and e-mail are set out under its name on the signing pages hereto. A
notice shall be effective upon actual receipt thereof, save that where it is received after
5.30 (five thirty) p.m. on a business day, or on a day that is not a business day, the notice
shall be deemed to be received on the first business day following the date of actual
receipt. Without prejudice to the foregoing, a Party giving or making a notice or
communication by facsimile or e-mail shall promptly deliver a copy thereof personally, or
send it by courier or registered post to the addressee of such notice or communication. It
is hereby agreed and acknowledged that any Party may by notice change the address to
which such notices and communications to it are to be delivered or mailed. Such change
shall be effective when all the Parties have notice of it.
11.11 Language
All notices, certificates, correspondence and proceedings under or in connection with this
Agreement shall be in English.
11.12 Authorized representatives
Each of the Parties shall, by notice in writing, designate their respective authorized
representatives through whom only all communications shall be made. A Party hereto
shall be entitled to remove and/or substitute or make fresh appointment of such
authorized representative by similar notice.
11.13 Original Document
This Agreement may be executed in four counterparts, each of which when executed and
delivered shall constitute an original of this Agreement.
IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED AND DELIVERED
THIS AGREEMENT AS OF THE DATE FIRST ABOVE WRITTEN.

THE COMMON SEAL OF AND DELIVERED

CONCESSIONAIRE has been affixed

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

pursuant to the resolution passed by the by the For and on behalf of

Board of Directors of the Concessionaire at its
SENIOR LENDERS by
meeting held on the day of 20
the
hereunto affixed in the presence of , Director,
who has Lender’s representative:
signed these presents in token thereof and
Company Secretary / Authorized Officer who
has countersigned the same in token thereof¥

(Signature) (Signature)
(Name) (Name)
(Designation) (Designation)
(Address) (Address)
(Fax No.) (Fax No.)
(E-mail address) (E-mail address)
SIGNED, SEALED AND SIGNED, SEALED AND
DELIVERED DELIVERED
For and on behalf of for and on behalf of
THE ESCROW BANK by THE AUTHORITY by:
(Signature) (Signature)
(Name) (Name)
(Designation) (Designation)
(Address) (Address)
(Fax No.) (Fax No.)
(E-mail address) (E-mail address)
SIGNED, SEALED
In the presence of:

¥
To be affixed in accordance with the articles of association of the Concessionaire and the resolution passed by its Board of
Directors.

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

SCHEDULE - P
(See Clause 27.2.1)

PANEL OF CHARTERED ACCOUNTANTS

1 Panel of Chartered Accountants
Pursuant to the provisions of Clause 27.2.1 of the Agreement, the Authority and the
Concessionaire shall prepare a mutually agreed panel of 5 (five) reputable firms of
Chartered Accountants having their registered offices in India (the “Panel of Chartered
Accountants”). The criteria for preparing such Panel and the procedure to be adopted in
this behalf shall be as set forth in this Schedule-P.
2 Invitation for empanelment
2.1 The Authority shall invite offers from all reputed firms of Chartered Accountants who
fulfil the following eligibility criteria, namely:
(a) the firm should have conducted statutory audit of the annual accounts of at least
one hundred companies registered under the Companies Act, 1956, including any
re-enactment or amendment thereof, of which at least ten should have been public
sector undertakings;
(b) The firm should have at least 5 (five) practicing Chartered Accountants on its
rolls, each with a minimum experience of ten years in the profession;
(c) The firm or any of its partners should not have been disqualified or black-listed
by the Comptroller and Auditor General of India or the Authority; and
(d) The firm should have an office in the State or in an adjacent State with at least 2
(two) practicing Chartered Accountants on its rolls in such State.
2.2 Interested firms meeting the eligibility criteria shall be required to submit a statement of
their capability including the bio-data of all the practicing Chartered Accountants on its
rolls. In particular, each firm shall be required to furnish year-wise information relating to
the names of all the companies with an annual turnover exceeding Rs. 25,00,00,000 (Rs.
twenty five crore) whose annual accounts were audited by such firm in any of the
preceding 5 (five) Accounting Years
3 Evaluation and selection
3.1 The information furnished by each firm shall be scrutinized and evaluated by the
Authority and 1 (one) point shall be awarded for each annual audit of the companies
specified in Paragraph 2.2 above. (For the avoidance of doubt and by way of illustration,
a firm which has conducted audit of the annual accounts of any such company for 5 (five)
years shall be awarded 5 (five) points).
3.2 The Authority shall prepare a list of all the eligible firms along with the points scored by
each such firm and 5 (five) firms scoring the highest points shall be identified and
included in the draft Panel of Chartered Accountants.
4 Consultation with the Concessionaire
The Authority shall convey the aforesaid panel of firms to the Concessionaire for scrutiny
and comments, if any. The Concessionaire shall be entitled to scrutinize the relevant

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

records of the Authority to ascertain whether the selection of firms has been undertaken in
accordance with the prescribed procedure and it shall send its comments, if any, to the
Authority within 15 (fifteen) days of receiving the aforesaid panel.
5 Mutually agreed panel
5.1 The Authority shall, after considering all relevant factors including the comments, if any,
of the Concessionaire, finalize and constitute a panel of 5 (five) firms which shall be
deemed to be the mutually agreed Panel of Chartered Accountants.
5.2 After completion of every 5 (five) years from the date of preparing the mutually agreed
Panel of Chartered Accountants, or such earlier period as may be agreed between the
Authority and the Concessionaire, a new panel shall be prepared in accordance with the
provisions of this Schedule-P.

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

SCHEDULE - Q
(See Clause 32.4)

VESTING CERTIFICATE

1 The Chairman, National Highways Authority of India (the “Authority”) refers to the
Concession Agreement dated ……………….. (the “Agreement”) entered into between
the Authority and ……………………. (the “Concessionaire”) for Four-Laning of
Pileru-Kalur (Tirupati Rural) Section of NH-71. [Section-1] from Design Km
55+900/Existing Km 59.250 of NH-71 to Design Km. 92+800/Existing Km 98.325 of
NH-71 and [Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-
205 to Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of
Andhra Pradesh under Bharatmala Pariyojana (the “Project Highway”) on design,
build, operate and transfer (“Hybrid Annuity”) basis.

2 The Authority hereby acknowledges compliance and fulfilment by the Concessionaire of

the Divestment Requirements set forth in Clause 32.1 of the Agreement on the basis that
upon issue of this Vesting Certificate, the Authority shall be deemed to have acquired,
and all title and interest of the Concessionaire in or about the Project shall be deemed to
have vested unto the Authority, free from any encumbrances, charges and liens
whatsoever.
3 Notwithstanding anything to the contrary contained hereinabove, it shall be a condition of
this Vesting Certificate that nothing contained herein shall be construed or interpreted as
waiving the obligation of the Concessionaire to rectify and remedy any defect or
deficiency in any of the Divestment Requirements and/or relieving the Concessionaire in
any manner of the same.
Signed this…………………… day of……………………., 20………….
At………………………..
AGREED, ACCEPTED AND SIGNED SIGNED, SEALED AND DELIVERED
For and on behalf of for and on behalf of
CONCESSIONAIRE by: AUTHORITY by:

(Signature) (Signature)

(Name) (Name)
(Designation) (Designation)
(Address) (Address)

In the presence of:

1. 2.

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

SCHEDULE - R
(See Clause 34.3.1)

SUBSTITUTION AGREEMENT
THIS SUBSTITUTION AGREEMENT is entered into on this the……………day
of…………..20……………….
AMONGST
1 The NATIONAL HIGHWAYS AUTHORITY OF INDIA, established under the National
Highways Authority of India Act 1988 , represented by its Chairman and having its
principal offices at G-5 & 6, Sector – 10, Dwarka, New Delhi - 110075 (Hereinafter
referred to as the “Authority” which expression shall unless repugnant to the context or
meaning thereof include its administrators, successors and assigns);
2 …………………………………….Limited, a company incorporated under the
provisions of the Companies Act, 2013 and having its registered office at ……………….
(Hereinafter referred to as the “Concessionaire” which expression shall unless repugnant
to the context or meaning thereof include its successors and permitted assigns and
substitutes);
3 …………………………….. (insert name and particulars of Lenders’ Representative) and
having its registered office at………………………………., acting for and on behalf of
the Senior Lenders as their duly authorized agent with regard to matters arising out of or
in relation to this Agreement (hereinafter referred to as the “Lenders’ Representative”,
which expression shall unless repugnant to the context or meaning thereof include its
successors and substitutes);
WHEREAS:
(A) The Authority has entered into a Concession Agreement dated………………. With the
Concessionaire (the “Concession Agreement”) for the Four-Laning of Pileru-Kalur
(Tirupati Rural) Section of NH-71. [Section-1] from Design Km 55+900/Existing
Km 59.250 of NH-71 to Design Km. 92+800/Existing Km 98.325 of NH-71 and
[Section-2] from Design Km 94+800/Existing Km. 274.231 of Old NH-205 to
Design Km 95+717/Existing Km. 275.148 of Old NH-205 in the State of Andhra
Pradesh under Bharatmala Pariyojana (the “Project”) on design, build, operate and
transfer basis (the “Hybrid Annuity”), and a copy of which is annexed hereto and
marked as Annex-A to form part of this Agreement.
(B) Senior Lenders have agreed to finance the Project in accordance with the terms and
conditions set forth in the Financing Agreements.
(C) Senior Lenders have requested the Authority to enter into this Substitution Agreement for
securing their interests through assignment, transfer and substitution of the Concession to
a Nominated Company in accordance with the provisions of this Agreement and the
Concession Agreement.
(D) In order to enable implementation of the Project including its financing, construction,
operation and maintenance, the Authority has agreed and undertaken to transfer and

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assign the Concession to a Nominated Company in accordance with the terms and
conditions set forth in this Agreement and the Concession Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective covenants
and agreements set forth in this Agreement, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the Parties agree as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Substitution Agreement, the following words and expressions shall, unless
repugnant to the context or meaning thereof, have the meaning hereinafter respectively
assigned to them: “Agreement” means this Substitution Agreement and any amendment
thereto made in accordance with the provisions contained in this Agreement;
“Financial Default” means occurrence of a material breach of the terms and conditions
of the Financing Agreements or a continuous default in Debt Service by the
Concessionaire for a minimum period of 3 (three) months;
“Lenders’ Representative” means the person referred to as the Lenders’ Representative
in the foregoing Recitals;
“Nominated Company” means a company, incorporated under the provisions of the
Companies Act, 1956, including any re-enactment or amendment thereof, selected by the
Lenders’ Representative, on behalf of Senior Lenders, and proposed to the Authority for
assignment/transfer of the Concession as provided in this Agreement;
“Notice of Financial Default” shall have the meaning ascribed thereto in Clause 3.2.1;
and
“Parties” means the parties to this Agreement collectively and “Party” shall mean any of
the Parties to this Agreement individually.
1.2 Interpretation
1.2.1 References to Lenders’ Representative shall, unless repugnant to the context or meaning
thereof, mean references to the Lenders’ Representative, acting for and on behalf of
Senior Lenders.
1.2.2 References to Clauses are, unless stated otherwise, references to Clauses of this
Agreement.
1.2.3 The words and expressions beginning with capital letters and defined in this Agreement
shall have the meaning ascribed thereto herein, and the words and expressions used in this
Agreement and not defined herein but defined in .the Concession Agreement shall, unless
repugnant to the context, have the meaning ascribed thereto in the Concession
Agreement.
1.2.4 The rules of interpretation stated in Clauses 1.2, 1.3 and 1.4 of the Concession Agreement
shall apply, mutatis mutandis, to this Agreement.
2 ASSIGNMENT
2.1 Assignment of rights and title

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The Concessionaire hereby agrees to assign the rights, title and interest in the Concession
to, and in favor of, the Lenders’ Representative pursuant to and in accordance with the
provisions of this Agreement and the Concession Agreement by way of security in
respect of financing by the Senior Lenders under the Financing Agreements.
3 SUBSTITUTION OF THE CONCESSIONAIRE
3.1 Rights of substitution
3.1.1 Pursuant to the rights, title and interest assigned under Clause 2.1, the Lenders’
Representative shall be entitled to substitute the Concessionaire by a Nominated
Company under and in accordance with the provisions of this Agreement and the
Concession Agreement.
3.1.2 The Authority hereby agrees to substitute the Concessionaire by endorsement on the
Concession Agreement in favor of the Nominated Company selected by the Lenders’
Representative in accordance with this Agreement. For the avoidance of doubt, the Senior
Lenders or the Lenders’ Representative shall not be entitled to operate and maintain the
Project as Concessionaire either individually or collectively.
3.2 Substitution upon occurrence of Financial Default
3.2.1 Upon occurrence of a Financial Default, the Lenders’ Representative may issue a notice
to the Concessionaire (the “Notice of Financial Default”) along with particulars thereof,
and send a copy to the Authority for its information and record. A Notice of Financial
Default under this Clause 3 shall be conclusive evidence of such Financial Default and it
shall be final and binding upon the Concessionaire for the purposes of this Agreement.
3.2.2 Upon issue of a Notice of Financial Default hereunder, the Lenders’ Representative may,
without prejudice to any of its rights or remedies under this Agreement or the Financing
Agreements, substitute the Concessionaire by a Nominated Company in accordance with
the provisions of this Agreement.
3.2.3 At any time after the Lenders’ Representative has issued a Notice of Financial Default, it
may by notice require the Authority to suspend all the rights of the Concessionaire and
undertake the operation and maintenance of the Project in accordance with the provisions
of Article 30 of the Concession Agreement, and upon receipt of such notice, the Authority
shall undertake Suspension under and in accordance with the provisions of the
Concession Agreement. The aforesaid Suspension shall be revoked upon substitution of
the Concessionaire by a Nominated Company, and in the event such substitution is not
completed within 180 (one hundred and eighty) days from the date of such Suspension,
the Authority may terminate the Concession Agreement forthwith by issuing a
Termination Notice in accordance with the provisions of the Concession Agreement;
provided that upon written request from the Lenders’ Representative and the
Concessionaire, the Authority may extend the aforesaid period of 180 (one hundred and
eighty) days by a period not exceeding 90 (ninety) days. For the avoidance of doubt, the
Authority expressly agrees and undertakes to terminate the Concession Agreement
forthwith, upon receipt of a written request from the Lenders’ Representative at any time
after 240 (two hundred and forty) days from the date of Suspension hereunder.
3.3 Substitution upon occurrence of Concessionaire Default
3.3.1 Upon occurrence of a Concessionaire Default, the Authority shall by a notice inform the
Lenders’ Representative of its intention to issue a Termination Notice and grant 15

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(fifteen) days’ time to the Lenders’ Representative to make a representation, stating the
intention to substitute the Concessionaire by a Nominated Company.
3.3.2 In the event that the Lenders’ Representative makes a representation to the Authority
within the period of 15 (fifteen) days specified in Clause 3.3.1, stating that it intends to
substitute the Concessionaire by a Nominated Company, the Lenders’ Representative
shall be entitled to undertake and complete the substitution of the Concessionaire by a
Nominated Company in accordance with the provisions of this Agreement within a period
of 180 (one hundred and eighty) days from the date of such representation, and the
Authority shall either withhold Termination or undertake Suspension for the aforesaid
period of 180 (one hundred and eighty) days; provided that upon written request from the
Lenders’ Representative and the Concessionaire, the Authority shall extend the aforesaid
period of 180 (one hundred and eighty) days by a period not exceeding 90 (ninety) days;
provided further that the Lenders’ Representative may at any time withdraw its
representation hereunder and upon such withdrawal, the Authority may terminate this
Agreement in accordance with the provisions hereof.
3.4 Procedure for substitution
3.4.1 The Authority and the Concessionaire hereby agree that on or after the date of Notice of
Financial Default or the date of representation to the Authority under Clause 3.3.2, as the
case may be, the Lenders’ Representative may, without prejudice to any of the other
rights or remedies of the Senior Lenders, invite, negotiate and procure offers, either by
private negotiations or public auction or tenders for the take over and transfer of the
Project including the Concession to the Nominated Company upon such Nominated
Company’s assumption of the liabilities and obligations of the Concessionaire towards
the Authority under the Concession Agreement and towards the Senior Lenders under the
Financing Agreements.
3.4.2 To be eligible for substitution in place of the Concessionaire, the Nominated Company
shall be required to fulfil the eligibility criteria that were laid down by the Authority for
short listing the bidders for award of the Concession; provided that the Lenders’
Representative may represent to the Authority that all or any of such criteria may be
waived in the interest of the Project, and if the Authority determines that such waiver
shall not have any material adverse effect on the Project, it may waive all or any of such
eligibility criteria.
3.4.3 Upon selection of a Nominated Company, the Lenders’ Representative shall request the
Authority to:
(a) Accede to transfer to the Nominated Company the right to construct, operate and
maintain the Project in accordance with the provisions of the Concession
Agreement;
(b) Endorse and transfer the Concession to the Nominated Company, on the same
terms and conditions, for the residual Concession Period; and
(c) Enter into a Substitution Agreement with the Lenders’ Representative and the
Nominated Company on the same terms as are contained in this Agreement.
3.4.4 If the Authority has any objection to the transfer of Concession in favor of the Nominated
Company in accordance with this Agreement, it shall within 15 (fifteen) days from the
date of proposal made by the Lenders’ Representative, give a reasoned order after hearing

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the Lenders’ Representative. If no such objection is raised by the Authority, the

Nominated Company shall be deemed to have been accepted. The Authority shall
thereupon transfer and endorse the Concession within 15 (fifteen) days of its
acceptance/deemed acceptance of the Nominated Company; provided that in the event of
such objection by the Authority, the Lenders’ Representative may propose another
Nominated Company whereupon the procedure set forth in this Clause 3.4 shall be
followed for substitution of such Nominated Company in place of the Concessionaire.
3.4.5 The transfer of Concession hereunder to a Nominated Company may, notwithstanding
anything to the contrary in this Agreement and the Concession Agreement, be undertaken
by transfer of no less than 75% (seventy five per cent) of the equity of the Concessionaire
to the Nominated Company, and upon such transfer hereunder, the Concessionaire shall
be deemed to be the Nominated Company under and in accordance with the provisions of
this Agreement and the Concession Agreement.
3.5 Selection to be binding
The decision of the Lenders’ Representative and the Authority in selection of the
Nominated Company shall be final and binding on the Concessionaire. The
Concessionaire irrevocably agrees and waives any right to challenge the actions of the
Lenders’ Representative or the Senior Lenders or the Authority taken pursuant to this
Agreement including the transfer/assignment of the Concession in favor of the Nominated
Company. The Concessionaire agrees and confirms that it shall not have any right to seek
revaluation of assets of the Project or the Concessionaire’s shares. It is hereby
acknowledged by the Parties that the rights of the Lenders’ Representative are irrevocable
and shall not be contested in any proceedings before any court or Authority and the
Concessionaire shall have no right or remedy to prevent, obstruct or restrain the Authority
or the Lenders’ Representative from effecting or causing the transfer by substitution and
endorsement of the Concession as requested by the Lenders’ Representative.
4 PROJECT AGREEMENTS
4.1 Substitution of Nominated Company in Project Agreements
The Concessionaire shall ensure and procure that each Project Agreement contains
provisions that entitle the Nominated Company to step into such Project Agreement, in its
discretion, in place and substitution of the Concessionaire in the event of such Nominated
Company’s assumption of the liabilities and obligations of the Concessionaire under the
Concession Agreement.
5 TERMINATION OF CONCESSION AGREEMENT
5.1 Termination upon occurrence of Financial Default
At any time after issue of a Notice of Financial Default, the Lenders’ Representative may
by a notice in writing require the Authority to terminate the Concession Agreement
forthwith, and upon receipt of such notice, the Authority shall undertake Termination
under and in accordance with the provisions of Article 31 of the Concession Agreement.
5.2 Termination when no Nominated Company is selected
In the event that no Nominated Company acceptable to the Authority is selected and
recommended by the Lenders’ Representative within the period of 180 (one hundred and

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eighty) days or any extension thereof as set forth in Clause 3.3.2, the Authority may
terminate the Concession Agreement forthwith in accordance with the provisions thereof.
5.3 Realization of Debt Due
The Authority and the Concessionaire hereby acknowledge and agree that, without
prejudice to their any other right or remedy, the Lenders’ Representative is entitled to
receive from the Concessionaire, without any further reference to or consent of the
Concessionaire, the Debt Due upon Termination of the Concession Agreement. For
realization of the Debt Due, the Lenders’ Representative shall be entitled to make its
claim from the Escrow Account in accordance with the provisions of the Concession
Agreement and the Escrow Agreement.
6 DURATION OF THE AGREEMENT
6.1 Duration of the Agreement
This Agreement shall come into force from the date hereof and shall expire at the earliest
to occur of the following events:
(a) Termination of the Agreement; or
(b) No sum remains to be advanced and no sum are outstanding to the Senior
Lenders, under the Financing Agreements.
7 INDEMNITY
7.1 General indemnity
7.1.1 The Concessionaire will indemnify, defend and hold the Authority and the Lenders’
Representative harmless against any and all proceedings, actions and third party claims
for any loss, damage, cost and expense of whatever kind and nature arising out of any
breach by the Concessionaire of any of its obligations under this Agreement or on account
of failure of the Concessionaire to comply with Applicable Laws and Applicable Permits.
7.1.2 The Authority will indemnify, defend and hold the Concessionaire harmless against any
and all proceedings, actions and third party claims for any loss, damage, cost and expense
arising out of failure of the Authority to fulfil any of its obligations under this Agreement,
materially and adversely affecting the performance of the Concessionaire’s obligations
under the Concession Agreement or this Agreement, other than any loss, damage, cost
and expense, arising out of acts done in discharge of their lawful functions by the
Authority, its officers, servants and agents.
7.1.3 The Lenders’ Representative will indemnify, defend and hold the Concessionaire
harmless against any and all proceedings, actions and third party claims for any loss,
damage, cost and expense arising out of failure of the Lenders’ Representative to fulfil its
obligations under this Agreement, materially and adversely affecting the performance of
the Concessionaire’s obligations under the Concession Agreement, other than any loss,
damage, cost and expense, arising out of acts done in discharge of their lawful functions
by the Lenders’ Representative, its officers, servants and agents.
7.2 Notice and contest of claims
In the event that any Party hereto receives a claim from a third party in respect of which it
is entitled to the benefit of an indemnity under Clause 7.1 or in respect of which it is

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entitled to reimbursement (the “Indemnified Party”), it shall notify the other Party
responsible for indemnifying such claim hereunder (the “Indemnifying Party”) within 15
(fifteen) days of receipt of the claim and shall not settle or pay the claim without the prior
approval of the Indemnifying Party, such approval not to be unreasonably withheld or
delayed. In the event that the Indemnifying Party wishes to contest or dispute the claim, it
may conduct the proceedings in the name of the Indemnified Party and shall bear all costs
involved in contesting the same. The Indemnified Party shall provide all cooperation and
assistance in contesting any claim and shall sign all such writings and documents as the
Indemnifying Party may reasonably require.
8 DISPUTE RESOLUTION
8.1 Dispute resolution
8.1.1 Any dispute, difference or claim arising out of or in connection with this Agreement
which is not resolved amicably shall be decided by reference to arbitration to a Board of
Arbitrators comprising one nominee each of the Authority, Concessionaire and the
Lenders’ Representative. Such arbitration shall be held in accordance with the Rules of
Arbitration of the International Centre for Alternative Dispute Resolution, New Delhi (the
“Rules”) or such other rules as may be mutually agreed by the Parties, and shall be
subject to provisions of the Arbitration and Conciliation Act, 1996.
8.1.2 The Arbitrators shall issue a reasoned award and such award shall be final and binding on
the Parties. The place of arbitration shall be the capital of the State and the language of
arbitration shall be English.
9 MISCELLANEOUS PROVISIONS
9.1 Governing law and jurisdiction
This Agreement shall be construed and interpreted in accordance with and governed by
the laws of India, and the courts in the New Delhi shall have jurisdiction over all matters
arising out of or relating to this Agreement.
9.2 Waiver of sovereign immunity
The Authority unconditionally and irrevocably:
(a) agrees that the execution, delivery and performance by it of this Agreement
constitute commercial acts done and performed for commercial purpose;
(b) 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
Authority with respect to its assets;
(c) 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
(d) consents generally in respect of the enforcement of any judgment 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

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or revenues whatsoever irrespective of their use or intended use of any order or

judgment that may be made or given in connection therewith).
9.3 Priority of agreements
In the event of any conflict between the Concession Agreement and this Agreement, the
provisions contained in the Concession Agreement shall prevail over this Agreement.
9.4 Alteration of terms
All additions, amendments, modifications and variations to this Agreement shall be
effectual and binding only if in writing and signed by the duly authorized representatives
of the Parties
9.5 Waiver
9.5.1 Waiver by any Party of a default by another Party in the observance and performance of
any provision of or obligations under this Agreement:
(a) 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;
(b) Shall not be effective unless it is in writing and executed by a duly authorized
representative of the Party; and
(c) Shall not affect the validity or enforceability of this Agreement in any manner.
9.5.2 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 another Party shall be treated or deemed as
waiver of such breach or acceptance of any variation or the relinquishment of any such
right hereunder.
9.6 No third party beneficiaries
This Agreement is solely for the benefit of the Parties and no other person or entity shall
have any rights hereunder.
9.7 Survival
9.7.1 Termination of this Agreement:
(a) Shall not relieve the Parties of any obligations hereunder which expressly or by
implication survive termination hereof; and
(b) except as otherwise provided in any provision of this Agreement expressly limiting the
liability of either Party, shall 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.
9.7.2 All obligations surviving the cancellation, expiration or termination of this Agreement
shall only survive for a period of 3 (three) years following the date of such termination or
expiry of this Agreement.
9.8 Severability

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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 dispute resolution under Clause 8 of this
Agreement or otherwise.
9.9 Successors and assigns
This Agreement shall be binding on and shall inure to the benefit of the Parties and their
respective successors and permitted assigns.
9.10 Notices
All notices or other communications to be given or made under this Agreement shall be in
writing, shall either be delivered personally or sent by courier or registered post with an
additional copy to be sent by facsimile or e-mail. The address for service of each Party, its
facsimile number and e-mail address are set out under its name on the signing pages
hereto. A notice shall be effective upon actual receipt thereof, save that where it is
received after 5.30 (five thirty) p.m. on any day, or on a day that is a public holiday, the
notice shall be deemed to be received on the first working day following the date of actual
receipt. Without prejudice to the foregoing, a Party giving or making a notice or
communication by facsimile or e-mail shall promptly deliver a copy thereof personally, or
send it by courier or registered post to the addressee of such notice or communication. It
is hereby agreed and acknowledged that any Party may by notice change the address to
which such notices and communications to it are to be delivered or mailed. Such change
shall be effective when all the Parties have notice of it.
9.11 Language
All notices, certificates, correspondence and proceedings under or in connection with this
Agreement shall be in English.
9.12 Authorized representatives
Each of the Parties shall by notice in writing designate their respective authorized
representatives through whom only all communications shall be made. A Party hereto
shall be entitled to remove and/or substitute or make fresh appointment of such
authorized representative by similar notice.
9.13 Original Document
This Agreement may be executed in three counterparts, each of which when executed and
delivered shall constitute an original of this Agreement.

IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED AND DELIVERED THIS

AGREEMENT AS OF THE DATE FIRST ABOVE WRITTEN

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THE COMMON SEAL OFCONCESSIONAIRE SIGNED, SEALED

has been affixed pursuant to the resolution passed
AND DELIVERED
by the Board of Directors of the Concessionaire
at its meeting held on the…………..day of the For and behalf of THE AUTHORITY by:
………….20………..here unto affixed in to the
presence of………………the Director, who has
signed these presents in token thereof,
…………………………Company Secretary
/Authorized Officer who has countersigned the
same in token thereof¥.

(Signature) (Signature)
(Name)
(Name)
(Designation)
(Designation)
(Address)
(Address)
(Fax No.) (e-mail address)
(Fax No.) (e-mail address)

SIGNED, SEALED AND DELIVERED

For and on behalf of
SENIOR LENDERS by the
Lenders’ Representative:
(Signature)
(Name)
(Designation)

¥
To be affixed in accordance with the articles of association of the Concessionaire and the resolution passed by its Board of Directors

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(Address)
(Fax No.)
(E-mail address)
In the presence of: 1. 2.

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PUBLIC PRIVATE PARTNERSHIP IN HYBRID ANNUITY PROJECTS

SCHEDULE S
Procedure for Dispute Resolution Board
The parties to the Concession Agreement mutually agree as follows:
(1) The Board shall comprise of three Members having experience in the field of construction or
have been involved in the Works related to construction and with the interpretation of
contractual documents. One Member shall be selected by each of the Authority and the
Concessionaire from the list maintained by NHAI hosted on its website ([Link]). In
the event the parties fail to select the member within 28 days of the date of the signing of
Concession Agreement, in that eventuality, upon the request of either or both parties such
Member shall be selected by SAROD within 14 days. The third Member shall be selected by
the other two members from the same list. If the two Members selected by or on behalf of the
parties fail to select the third Member within 14 days after the later of their selections, then
upon the request of either or both parties such third Member shall be selected by SAROD
within 14 days. The third Member shall serve as Chairman of the Board.

(2) The Board shall be constituted when each of the three Board Members has signed a Board
Member’s declaration of Acceptance as required by the DRB’s rules and procedures (which,
along with the declaration of acceptance form, are attached as Annexure herewith).

(3) In the event of death, disability, or resignation of any Member, such Member shall be
replaced in the same manner as the Member being replaced was selected. If for any other
reason, a Member fails or is unable to serve, the Chairman (or failing the action of the
Chairman then either of the other Members) shall inform the Parties and such non-serving
Member shall be replaced in the same manner as the Member being replaced was selected.
Any replacement made by the parties shall be completed within 28 days after the event giving
rise to the vacancy on the Board, failing which the replacement shall be made by SAROD in
the same manner as described above. Replacement shall be considered complete when the
new Member signs the Board Member's Declaration of Acceptance. Throughout any
replacement process, the Members not being replaced shall continue to serve and the Board
shall continue to function and its activities shall have the same force and effect as if the
vacancy had not occurred, provided, however, that the Board shall not conduct a hearing nor
issue a decision until the replacement is completed.

(4) If either the Authority or the Concessionaire is dissatisfied with any decision of the Board,
and/or if the Board fails to issue its decision within 56 days after receipt of all the pleadings
(along with the supporting documents) of the parties by the Chairman of the Board or any
extension mutually agreed upon by the Authority and the Concessionaire, in such a case,
either the Authority or the Concessionaire may, within 28 days after his receipt of the
decision, or within 28 days after the expiry of the said period, as the case may be, give notice
to the other party, with a copy for information to the Independent Engineer, of his intention to
refer the matter to the Conciliation Committee of Independent Experts (CCIE) of the
Authority for Conciliation/amicable settlement.
(5) It is mandatory to refer all the disputes to DRB before issuance of completion certificate and
satisfactory completion of punch list items. No dispute shall be entertained after completion
of aforementioned date.

(6) If the Board has issued a decision to the Authority and the Concessionaire within the said 56
days or any extension mutually agreed upon by the Authority and the Concessionaire and no
notice of intention to commence Conciliation by the Conciliation Committee of Independent
Experts (CCIE) of the Authority for Conciliation/amicable settlement as to such dispute has
been given by either the Authority or the Concessionaire within 28 days after the parties

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received such decision from the Board, the decision shall become final and binding upon the
Authority and Concessionaire.

(7) Whether or not it has become final and binding upon the Authority and the Concessionaire, a
decision shall be admissible as evidence in any subsequent dispute resolution procedure,
including any arbitration or litigation having any relation to the dispute to which the decision
relates.

(8) All decision of DRB which have become final and binding or till they have been reversed in
subsequent conciliation/ Arbitration process shall be implemented by the parties forthwith.
Such implementation shall also include any relevant action of the Independent Engineer.

(9) If during the Concession Period, the Authority and the Concessionaire are of the opinion that
the Disputes Resolution Board is not performing its functions properly, the Authority and the
Concessionaire may together disband the Disputes Resolution Board and reconstitute it. In
that case, a new board shall be selected in accordance with the provisions applying to the
selection of the original Board as specified above, except that words "within 28 days after the
signing of this Concession Agreement" shall be replaced by the words "within 28 days after
the date on which the notice disbanding the original Board became effective".

(10) The Authority and the Concessionaire shall jointly sign a notice specifying that the Board
shall stand disbanded with effect from the date specified in the notice. The notice shall be
posted by email to each Member of the Board. A Member shall be deemed to have received
the e mail even if he refuses to have received the same.

(11) All other terms and conditions of the original Concession Agreement shall remain
unaltered/unaffected and the parties shall remain bound by terms and conditions as contained
therein.

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Annexure to Schedule S
Disputes Resolution Board’s Rules and Procedures
1. Except for providing the services required hereunder, the Board Members shall not give any
advice to either party or to the Independent Engineer concerning conduct of the Works. The
Board Members:

a. Shall have no financial interest in any party to the Concession Agreement, or the
Independent Engineer, or a financial interest in the Concession, except for payment for
services on the Board.
b. Shall have had no previous employment by, or financial ties to, any party to the
Concession Agreement, or the Independent Engineer, except for fee based consulting
services/ advisers on other projects, and/or be Retired Government Officers (not
connected in whole or part with the project), all of which must be disclosed in writing to
both parties prior to appointment to the Board.
c. Shall have disclosed in writing to both parties prior to appointment to the Board any and
all recent or close professional or personal relationships with any director, officer, or
employee of any party to the Concession Agreement, or the Independent Engineer, and
any and all prior involvement in the project to which the Concession relates;
d. Shall not, while Board member, be employed whether as a consultant or adviser or
otherwise by either party to the Concession Agreement, or the Independent Engineer,
except as a Board Member, without the prior consent of the parties and the other Board
Members;
e. Shall not, while a Board Member, engage in discussion or make any agreement with any
party to the Concession Agreement, or with the Independent Engineer, regarding
employment whether as a consultant or otherwise whether after the Concession is
completed or after service as a Board Member is completed.
f. Shall remain and be impartial and independent of the parties and shall disclose in writing
to the Authority, the Concessionaire and one another any fact or circumstance which
might be such as to cause either the Authority or the Concessionaire to question the
continued existence of the impartiality and independence required of Board Members;
and
g. Shall be fluent in the language of the Concession.

2. Except for its participation in the Board's activities as provided in the Concession Agreement and
in this Agreement none of the Authority, the Concessionaire, and or the Independent Engineer
shall solicit advice or consultation from the Board or the Board Members on matters dealing with
the conduct of the Works.

3. The Concessionaire shall:

a. Furnish to each Board member one copy of all documents which the Board may request
including Concession Agreement, progress reports and other documents pertinent to the
performance of the Concession Agreement.
b. In cooperation with the Authority, coordinate the site visits of the Board, including
conference facilities, and secretarial and copying service.

4. The Board shall begin its activities following the signing of a Board Member's Declaration of
Acceptance by all three Board Members, and it shall terminate these activities as set forth below:

a. The Board shall terminate its regular activities when either (i) issuance of completion
certificate and completion of punch list items or (ii) the parties have terminated the

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Concession and when, in either case, the Board has communicated to the parties and the
Independent Engineer its decision on all disputes previously referred to it.
b. Once the Board has terminated its regular activities as provided by the previous
paragraph, the Board shall remain available to process any dispute referred to it by either
party. In case of such a referral, Board Members shall receive payments as provided in
paragraphs 7 (a)(ii), (iii) and (iv).

5. Board Members shall not assign or subcontract any of their work under these Rules and
Procedures.

6. The Board Members are Independent and not employees or agents of either the Authority or the
Concessionaire.

7. Payments to the Board Members for their services shall be governed by the following provisions:

a. Each Board Member will receive payments as follows:

i. A retainer fee per calendar month as specified in the schedule of fee made part of this Schedule
and its revision from time to time. This retainer fee shall be considered as payment in full for:

A. Being available, on 7 days' notice, for all hearings, Site Visits, and other meetings of the
Board.

B. Being conversant with all project developments and maintaining relevant files.

C. All offices and overhead expenses such as secretarial services, photocopying and office
supplies (but not include telephone calls, faxes and telexes) incurred in connection with the duties
as a Board Member.

ii. A daily fee as specified in the schedule of fee in respect of fee for site visit & meeting, fee for
meeting/ hearing not at site and extra charges for days (max. of 02 days for travel on each
occasion) other than hearing / meeting days.

iii. Expenses, in addition to the above, all reasonable and necessary travel expenses (including
economy class air fare, subsistence, and other direct travel expenses). Receipts for all expenses in
excess of Rs. 2000/- (Rupees Two Thousand only) shall be provided.

iv. Reimbursement of any taxes that may be levied on payments made to the Board Member
pursuant to this paragraph 7.

b. The retainer fee and other fees shall remain fixed for the period of each Board Member's term
until revised by NHAI.

c. Phasing out of monthly retainer fee. Beginning with the next month after the completion
certificate (or, if there are more than one, the one issued last) has been issued, the Board members
shall receive only one-third of the monthly retainer fee till next one year. Beginning with the next
month after the Board has terminated its regular activities pursuant to paragraph 4(a) above, the
Board members shall no longer receive any monthly retainer fee.

d. Payments to the Board Members shall be shared equally by the Authority and the
Concessionaire. The concerned Project Implementation Unit (PIU) of Authority shall pay
members' invoices within 30 calendar days after receipt of such invoices and shall invoice the

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Concessionaire for one-half of the amounts of such invoices. The Concessionaire shall pay such
invoices within 30 days' time period after receipt of such invoices.

8. Board Site Visits.

a. The Board shall visit the Site and meet the representatives of the Authority, the
Concessionaire and the Independent Engineer at regular intervals, at times of critical
construction events, at the written request of either party, and in any case not less than 6 times
in any period of 12 months. The timing of Site visits shall be as agreed among the Authority,
the Concessionaire and the Board, but failing agreement shall be fixed by the Board.
b. Site visits shall include an informal discussion of the status of the construction of the Works.
Site visits shall be attended by personnel from the Authority, the Concessionaire and the
Independent Engineer.
c. At the conclusion of each Site visit, the Board shall prepare a report covering its activities
during the visit and shall send copies to the parties and to the Independent Engineer.

9. Procedure for Dispute Referral to the Board:

a. If either party objects to any action or inaction of the other party or the Independent
Engineer, the objecting party may file a written Notice of Dispute to the other party with
a copy to the Independent Engineer stating that it is given pursuant to the Agreement and
state clearly and in details the basis of the dispute.
b. The party receiving the Notice of Dispute will consider it and respond to it in writing
within 14 days after receipt.
c. This response shall be final and conclusive on the subject, unless a written appeal to the
response is filed with the responding party within 10 days after receiving the response and
call upon Independent Engineer to mediate and assist the parties in arriving an amicable
settlement thereof. Both parties are encouraged to pursue the matter further to attempt to
settle the dispute.
d. If the Independent Engineer receiving the Notice of Dispute fails to provide a written
response within 14 days after receipt of such Notice or failing mediation by Independent
Engineer, either party may require such dispute to be referred to the Board, either party
may refer the dispute to the Board by written Request to the Board. The Request for
decision shall state clearly and in full detail the specific issues of the dispute (s) to be
considered by Board and shall be addressed to the Chairman of the Board, with copies to
the other Board Members, the other party, and the Independent Engineer, and it shall state
that it is made pursuant to this Agreement.
e. When a dispute is referred to the Board, and the Board is satisfied that the dispute
requires the Board's assistance, the Board decide when to conduct a hearing on the
dispute. The Board may request that written documentation and arguments from both
parties be submitted to each Board Member before the hearing begins. The parties shall
submit insofar as possible agreed statements of the relevant facts.
f. During the hearing, the Concessionaire, the Authority, and the Independent Engineer shall
each have ample opportunity to be heard and to offer evidence. The Board's decision for
resolution of the dispute will be given in writing to the Authority, the Concessionaire and
the Independent Engineer as soon as possible, and in any event not more than 56 days or
any mutually extended period between the Authority and the Concessionaire. The time
period of 56 days of issuance of DRB decision will reckon/start from the day of first
hearing that begins after submission of complete pleadings (including supporting
documents, if any) by the parties.

10. Conduct of Hearings:

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a. Normally hearings will be conducted at the Site, but any location that would be more
convenient and still provide all required facilities and access to necessary
documentation may be utilized by the Board. Private session of the Board may be
held at any cost effective location convenient to the Board. Video recordings of all
hearings shall invariably be made.
b. The Authority, the Independent Engineer and the Concessionaire shall be given
opportunity to have representatives at all hearings. Parties should restrain to bring any
Advocate/ Law Firm during DRB hearings.
c. During the hearings, no Board Member shall express any opinion concerning the
merit of the respective arguments of the parties.
d. After the hearings are concluded, the Board shall meet privately to formulate its
decision. The private meeting (s) of the Board shall not exceed 3 sittings. All Board
deliberations shall be conducted in private, with all Members' individual views kept
strictly confidential. The Board's decisions, together with an explanation of its
reasoning shall be submitted in writing to both parties and to the Independent
Engineer. The decision shall be based on the pertinent Concession provisions,
applicable laws and regulations and the facts and circumstances involved in the
dispute.
e. The Board shall make every effort to reach a unanimous decision. If this proves
impossible the majority shall decide and the dissenting Member may prepare a
written minority report together with an explanation of its reasoning for submission to
both parties and to the Independent Engineer.

11. In all procedural matters, including the furnishing of written documents and arguments relating to
disputes, site visits and conduct of hearings, the Board shall have full and the final authority. If a
unanimous decision on any such matter proves impossible, the majority shall prevail.

12. After having been selected and where necessary approved each Board Member shall sign two
copies of the following declaration and make one copy available each to the Authority and to the
Concessionaire.

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“BOARD MEMBER’S DECLARATION OF ACCEPTANCE”

WHEREAS

a. A Concession Agreement (the Concession) for the _________ project [fill in the name of
project] has been signed on _______________ [fill in date] between [name of Authority]
and ___________________ [name of Concessionaire] (the Concessionaire).:
b. The provisions of Agreement and Dispute Resolution Board's rules and procedure provided
for establishment and operation of Dispute Resolution Board (DRB).
c. The undersigned has been selected to serve as a Board Member on said Board;

NOW THEREFORE, the undersigned Board Member hereby declares as follows:

1. I accept the selection as a Board Member and agree to serve on the Board and to be bound
by the provisions of Concession Agreement and rules and procedure provided for
establishment and operation of Dispute Resolution Board (DRB).

2. With respect to paragraph 1 of Dispute Resolution Board's Rules and Procedure. said
Annex A, I declare

a. that I have no financial interest of the kind referred to in subparagraph (a):

b. that I have had no previous employment nor financial ties of the kind referred to in
subparagraph (b); and
c. that I have made to both parties any disclosures that may be required by sub-paragraphs
(b) and (c).

3. I declare that I have _______ no. of Arbitrations (list enclosed) and no. _______ of DRBs
(list enclosed) in progress and that I will give sufficient time for the current assignment.

BOARD MEMBER
___________________________________________

___________________[insert name of Board Member)

Date : ____________________________________

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Schedule of expenses and fees payable to the

Member (s) of Dispute Resolution Board (DRB)

The fee and other expenses payable to the Members of DRB shall be as under :-

S. No. PARTICULAR AMOUNT PAYABLE

1. Retainer-ship fee, secretarial assistance and Rs. 50,000/- per month for one package
incidental charges (telephone, fax, and maximum of
postage etc.) Rs. 75,000/- per month for 2 or more
packages

2. (i) Fee for site visit or meetings at site Rs. 25,000/- per day

(ii) Fee for meetings/hearings not at site Rs. 10,000/- per day

3. Traveling expenses Economy class by air, AC first class by

train and AC taxi by road

4. Lodging & Boarding Rs. 15,000/- per day (Metro Cities); or

Rs. 10,000/- per day (in other cities); or
Rs. 5,000/- per day (own arrangement)

5. Extra charges for days other than hearing/ Rs. 5,000/-

meeting days (travel days
maximum of 2 days on each
occasion)
6. Local conveyance Rs. 2,000/-

Notes:
(i) Lodging, boarding and travelling expenses will be allowed only for those members
who are residing 100 kms away from the place of meeting.
(ii) Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad shall be considered as
Metro Cites.
(iii) The above schedule of fee and expenses shall be applicable on or after the date of issue
of this circular.
(iv) The expenses are to be shared equally by the parties i.e. Authority and Concessionaire.

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