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Road Traffic Management Corporation Act, 1999 (Act No. 20 of 1999)

Chapter 5 : Private investment in road traffic

37. Road traffic facility and services investment contracts

 

(1) For the purposes of subsection (2)—
(a) a contract to build-lease-and-transfer means a contract whereby a project contractor finances and constructs a road traffic facility and on its completion leases it to the Corporation for a fixed term after which ownership of the asset is automatically transferred to the Corporation, or any variation, amendment or addition of such terms as may be agreed;
(b) a contract to build-own-and-operate means a contract whereby a project contractor finances, constructs, owns, operates and maintains a road traffic facility with no time limitation imposed on ownership and from which the contractor is allowed to recover its total investment and operating and maintenance costs plus a reasonable rate of return thereon by collecting tolls, fees, rentals or other charges from facility users, or any variation, amendment or addition of such terms as may be agreed, but as long as the contractor is not in violation of its franchise, it may continue to operate the asset in perpetuity;
(c) a contract to build-operate-and-transfer means a contract whereby a project contractor—
(i) constructs and finances a road traffic facility;
(ii) assumes cost overruns, delays and specified performance risks;
(iii) operates and maintains such asset over a fixed term during which the contractor is allowed to charge users appropriate tolls, fees, rentals and charges not exceeding those proposed in its bid or as negotiated and incorporated in the contract to enable that contractor to recover its investment and operating and maintenance expenses in the project plus a reasonable rate of return thereon; and
(d) transfers the asset to the Corporation at the end of a fixed term, or any variation, amendment or addition of such terms as may be agreed;
(e) a contract to build-and-transfer means a contract whereby a project contractor finances and constructs a road traffic facility and after its completion turns it over to the Corporation, which pays the contractor on an agreed schedule its total investment expended on the project, plus a reasonable rate of return thereon, or any variation of such terms as may be agreed;
(f) a contract-add-operate arrangement means a contractual arrangement whereby the project contractor adds to an existing road traffic facility which it is renting from the Corporation and operates such road traffic facility over a fixed period including the transfer of the asset back to the Corporation, or any variation, amendment or addition of such terms as may be agreed;
(g) a contract to rehabilitate-own-and-operate means a contract whereby an existing road traffic facility is turned over .to a private person or entity to refurbish and operate with no time limitation imposed on ownership, but as long as the operator is not in violation of its franchise, it may continue to operate the facility in perpetuity or under any variation or amendment or addition to such terms as may be agreed; and
(h) a contract to rehabilitate-operate-and-transfer means a contract whereby an existing road traffic facility is—
(i) turned over to a project contractor to refurbish and operate for a fixed period, at the expiration of which legal title to the asset is turned over to the Corporation; or
(ii) leased to a project contractor to refurbish and operate for a fixed period, and may include the purchase of an existing facility from abroad, importing, refurbishing, erecting and consuming it within the Republic, or any variation, amendment or addition of such terms as may be agreed.

 

(2) The procurement of any investment in terms of section 34(c) must be effected through the conclusion of an appropriate investment contract which—
(a) in the case of a publicly-owned road traffic facility, may include—
(i) a contract to build-own-and-operate or a variant thereof;
(ii) a contract to rehabilitate-own-and-operate or a variant thereof;
(iii) a contract to rehabilitate-operate-and-transfer or a variant thereof;
(iv) a build-operate-and-transfer, build-and-transfer or build-lease-and-transfer contract or variant thereof;
(v) a leasing contract, including a contract-add-operate arrangement or variant thereof;
(vii) a management contract; and
(b) in the case of road traffic services, may include—
(i) a management contract for the supervision and co-ordination of agents within–
(aa) a province on a provincial level;
(bb) a metropolitan area on a metropolitan level; or
(cc) a local area on a local level; and
(ii) a services supply contract for—
(aa) road traffic law enforcement, subject to section 38(3);
(bb) vehicle registration and licensing service, or issuing of special permits or both services;
(cc) roadworthiness testing service at a vehicle testing station in respect of heavy vehicles, light motor vehicles or both;
(dd) driver testing in respect of learner driver licensing, driver licensing for light motor vehicles or motor cycles and driver licensing for heavy vehicles or all the services;
(ee) public payment service only;
(ff) auditing of agents for performance and compliance; and
(gg) any other road traffic service.

 

(3) For the purposes of this section, the chief executive officer must develop standard contracts in accordance with prescribed guidelines.

 

(4) A contract involving a publicly funded negative concession, must provide for—
(a) targets for possible reduction of exchequer finance, linked to time scales;
(b) fixed periods at which the contract will be reviewed to ascertain whether—
(i) targets have been met; and
(ii) targets need to be renegotiated or the contract terminated;
(c) separate accounting records; and
(d) the exercise by the Corporation of the right to—
(i) request a report from the contractor on the financial aspects of the operations;
(ii) conduct an audit of the books of account of the contractor; and
(iii) enter the premises of the contractor to inspect any facility or document.

 

(5) Nothing in this Act prevents the conclusion of any combination of two or more of the contracts referred to in subsection (2) to facilitate the provisioning of a road traffic facility and service.

 

(6) The Shareholders Committee may, on advice of the chief executive officer, approve any variation of the contracts referred to in subsection (2).

 

(7) The negotiation of a contract must be confidential and no party to the negotiations may reveal to any other person any technical, price or other information relating to the negotiations without the consent of the other party.

 

(8) The chief executive officer must submit quarterly reports to the Shareholders Committee on progress being achieved with the reduction of exchequer finance during the duration of a contract involving a publicly funded negative concession.