Exhibit 10.1
PUBLIC BIDDING N° SIDUE-CEA-APP-2015-002
AGREEMENT No. C- SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTENERSHIP AGREEMENT for the:
“CONSTRUCTION, FINANCING AND OPERATION OF A DEASLINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
CONSISTING OF:
A DESALINATION PLANT WITH A CAPACITY OF UP TO 4.4 M3/SECOND IN TWO STAGES: THE FIRST WITH A CAPACITY OF 2.2 M3/SECOND, AND AN AQUEDUCT TO THE DELIVERY POINT IN TANK 3, MUNICIPALITY OF TIJUANA AND THE EXPANSION OF THE MENTIONED TANK TO 20,000 M3; AND THE SECOND WITH A CAPACITY OF 2.2 M3/SECOND, AND AN AQUEDUCT FROM TANK 3 TO THE POTABILIZATION PLANT OF EL FLORIDO, MUNICIPALITY OF TIJUANA, INCLUDING THE DESIGN, PREPARATION OF THE EXECUTIVE PROJECT, CONSTRUCTION, ELECTROMECHANIC EQUIPMENT AND FUNCTIONALITY TESTS OF THE DESALINATION PLANT AND THE AQUEDUCTS, AS WELL AS THE OPERATION, CONSERVATION AND MAINTENANCE, INCLUDING CONDUCTION AND DELIVERY OF UP TO 4,400 LITERS PER SECOND, TREATMENT AND DISPOSAL OF THE WASTE WATER, DURING AN OPERATION PERIOD OF 37 YEARS.
AUGUST 22, 2016
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INDEX
First. Subject matter of the Agreement | 26 |
Second. Term of the APP | 27 |
Third. Description of the Works | 28 |
Fourth. Terms for Execution | 29 |
Fifth. Execution of the Project and Financing | 32 |
Sixth. Operation of the System | 34 |
Seventh. Replacement of Equipment, Conservation and Maintenance | 36 |
Eight. Real Estate | 37 |
Ninth. Property of the Assets | 38 |
Tenth. Procurement of Permits and Authorizations | 39 |
Eleventh. Consideration for the Services | 39 |
Twelfth. Adjustments to the Amount of the Consideration | 46 |
Thirteenth. Form of Payment of the Consideration | 46 |
Fourteenth. Intentionally left blank | 48 |
Fifteenth. Intake Water Availability | 48 |
Sixteenth. Quality and Quantity of the Potable Water | 49 |
Seventeenth. Water Monitoring | 50 |
Eighteenth. Environmental Laws | 50 |
Nineteenth. Waste Water | 51 |
Twentieth. Contributions and Penalties | 52 |
Twenty First. Industrial and Intellectual Property | 52 |
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Twenty Second. Logbook | 53 |
Twenty Third. Supervision and Inspection of the Works | 53 |
Twenty Fourth. Minutes | 53 |
Twenty Fifth. Conditions to Deliver the System | 58 |
Twenty Sixth. Intentionally left blank | 60 |
Twenty Seventh. Insurances | 60 |
Twenty Eighth. Guarantees provided by the Developer | 62 |
Twenty Ninth. Resources of the Consideration | 67 |
Thirtieth. Early Termination of the APP | 68 |
Thirty First. Rescission | 71 |
Thirty Second. Early Termination due to Act of God or Force Majeure Event | 76 |
Thirty Third. Early Termination due to General Interest Reasons or Justified Causes | 78 |
Thirty Fourth. Procedure to Solve Technical Controversies | 79 |
Thirty Fifth. Conventional Penalties for Breach | 80 |
Thirty Sixth. Labor Liability | 82 |
Thirty Seventh. Assignment of Rights and Subcontracting | 83 |
Thirty Eighth. Notices | 83 |
Thirty Ninth. Discrepancies in the Information | 84 |
Fortieth. Arbitration | 85 |
Forty First. Exhibits | 86 |
Forty Second. Public Nature of the Public Private Partnership Agreement APP | 87 |
Forty Third. Amendments to the APP | 87 |
Forty Fourth. Conditions for the Commencement of the Effectiveness of the APP | 88 |
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Forty Fifth. Administration Trust | 90 |
Forty Sixth. Total Cost of the System | 90 |
Forty Seventh. Maximum Limit of Liability | 93 |
Forty Eighth. Obligations of the Developer | 93 |
Forty Ninth. Liability for the Quantity and Quality of the Water | 94 |
Fiftieth. Confidentiality | 95 |
Fifty First. Obligations of CEA | 95 |
Fifty Second. Headings | 96 |
Fifty Third. Unconditional Acceptance | 96 |
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PUBLIC PRIVATE PARTNERSHIP AGREEMENT (APP) HEREBY ENTERED INTO ON ONE PART BY THE BAJA CALIFORNIA STATE WATER COMMISSION, WHICH SHALL HEREINAFTER BE REFERRED TO AS “CEA” REPRESENTED HEREIN BY MR. GERMÁN JESÚS LIZOLA MÁRQUEZ, IN HIS CAPACITY AS GENERAL DIRECTOR, AND THE MERCANTILE COMPANY NAMEDAGUAS DE ROSARITO, SOCIEDAD ANÓNIMA PROMOTORA DE INVERSIÓN DE CAPITAL VARIABLE, WHICH SHALL HEREINAFTER BE REFERRED TO AS THE “DEVELOPER”, REPRESENTED HEREIN BYMESSRS. MICHAEL AVANT SMITH, FREDERICK W. MCTAGGARTANDLAUTARO MANUEL MILLAMAN-TERUEL,IN THEIRCAPACITY OF MEMBERS OF THE BOARD OF DIRECTORS, ALSO APPEARING THE TIJUANA STATE COMMISSION Of PUBLIC UTILITIES, AS JOINTLY LIABLE, HEREINAFTER THE “CESPT”, REPRESENTED HEREIN BY MR.MIGUEL LEMUS ZENDEJAS, IN HIS CAPACITY ASGENERAL DIRECTOR, ANDTHE GOVERNMENT OF THE STATE OF BAJA CALIFORNIA, THROUGHTHE MINISTRY OF PLANNING AND FINANCING, HEREINAFTER THE “SPF”, REPRESENTED HEREIN BYMR. ANTONIO VALLADOLID RODRÍGUEZ, IN HIS CAPACITY ASSECRETARY OF PLANNING AND FINANCING, PURSUANT TO THE FOLLOWING ANTECEDENTS, STATEMENTS, DEFINITIONS AND CLAUSES:
ANTECEDENTS
1. | In order to satisfy the demand of potable water currently required in theMunicipalities of Playas de Rosarito and Tijuana, State of Baja California and the requirements of its future development and trying to preserve the natural resources and the aquifers that supply the region, as one of the essential objectives of this administration to exercise a democratic and humanized government, which guarantees the respect of the law and decidedly encourages the participation of the society and allows to offer quality infrastructure and services to improve the life conditions of the residents of Baja California,CEA has made, jointly with the promoter of thePROJECT, the necessary studies to identify the alternatives that allow the sufficient and timely supply of potable water for the oncoming forty years. |
2. | One of the alternatives to obtain such water supply, which evidences the best financial viability, is through a public private partnership scheme, in whichCEAhires the public private partnership for the collection, desalinization of seawater, its potabilization and conduction in block to the established delivery point, which includes the preparation of a project integrating the engineering, financing, construction, start of operations and maintenance of a desalination plant, whose fundamental purpose is the desalination of seawater and block delivery throughCEA toCESPT with the quality required by the applicable health provisions in effect, in the amount and time required for the growing development of the communities of the municipalities of Playas de Rosarito and Tijuana; as well as to manage, conduct and dispose of the waste water with the guarantee of preservation and non-alteration of the surrounding environment. |
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3. | The State Committee of Public Private Partnership Projects (Projects Committee), as a collegiate and institutional body for the analysis, opinion and decision, that collaborates in the authorization procedure of public private partnership projects conducted byCEA, pursuant to the provisions of theLAPPEBC, and being formed by the SPF, which presides over the Projects Committee; the Secretary of General Government(SGG); the General Coordination of the Cabinet (CGG); the Major Government Surveillance Office(OMG); the Ministry of Economic Development(SDE); the Direction of Governmental Control and Evaluation(DCEG); andSIDUE, which shall act as the Executive Secretary of the Committee, authorized in the session held onJuly 16, 2015, the call for the public bidding procedure of thePROJECT. |
4. | That thisAPPis executed under such scheme to establish a long term contractual relationship between instances of the public and private sectors, for the supply of services to the public sector or the final user and in which the infrastructure and resources used are completely or partially provided by the private sector, for which it has determined to entrust theDEVELOPER with the supply of the services referred to in thisAPP. |
5. | In the Second Ordinary Session of 2015 of the Projects Committee, it was unanimously authorized by the members of the Committee, and consequently agreed to call to a public bidding process in accordance with the provisions of chapter four of theLAPPEBC, pursuant to the principles of legality, free concurrence, competition, objectiveness, impartiality, transparency and publicity, awarding the project to the best conditions of price, quality, financing and opportunity. ThusCEA requested the support of the Technical Unit of Investment ofSIDUE to collaborate in the public bidding procedure of the authorized project mentioned below (the “CALL”) and to deliver toCEA,once awarded, the necessary documents to contract with the winner, pursuant to the applicable provisions of theLAPPEBC and its Regulations. |
PUBLIC INTERNATIONAL CALL FOR THE PUBLIC PRIVATE PARTNERSHIP NUMBER 002/2015.
“CONSTRUCTION, FINANCING AND OPERATION OF A DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO (WATER PRODUCTION THROUGH DESALINIZATION)”
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Consisting of:
A DESALINATION PLANT WITH A CAPACITY OF UP TO 4.4 M3/SECOND IN TWO STAGES: THE FIRST WITH A CAPACITY OF 2.2 M3/SEC, AND AN AQUEDUCT TO THE DELIVERY POINT IN TANK 3, MUNICIPALITY OF TIJUANA AND THE EXPANSION OF THE MENTIONED TANK TO 20,000 M3; AND THE SECOND WITH A CAPACITY OF 2.2 M3/SECOND, AND AN AQUEDUCT FROM TANK 3 TO THE POTABILIZATION PLANT OF EL FLORIDO, MUNICIPALITY OF TIJUANA, INCLUDING THE DESIGN, PREPARATION OF THE EXECUTIVE PROJECT, CONSTRUCTION, ELECTROMECHANIC EQUIPMENT AND FUNCTIONALITY TESTS OF THE DESALINATION PLANT AND THE AQUEDUCTS, AS WELL AS THE OPERATION, CONSERVATION AND MAINTENANCE, INCLUDING CONDUCTION AND DELIVERY OF UP TO 4,400 LITERS PER SECOND, TREATMENT AND DISPOSAL OF THE WASTE WATER, DURING AN OPERATION PERIOD OF 37 YEARS.
Public Bidding Procedure No.: SIDUE-CEA-APP-2015-002
Agreement No.: C-SIDUE-CEA-APP-2015-002
6. | CEAandCESPT shall execute theWATER PURCHASE AND SALE AGREEMENT,with the purpose of havingCEA supplying toCESPT theamount of annual cubic meters ofPOTABLE WATERin block, pursuant to the provisions of thisAPP, which, in turn, shall payCEA the necessary resources to pay theCONSIDERATION to theDEVELOPER, pursuant to thisAPP. |
7. | In exercise of the authority granted by thePublic Private Partnerships Law for the State of Baja California (LAPPEBC) published in the Official Gazette No. 42, dated August 22, 2014, Section I, Volume CXXI and in the Regulations of the Public Private Partnerships Law for the State of Baja California published in the Official Gazette No. 48, dated October 3, 2014, Section II, Volume CXXI,CEA published theCALL, onNovember 6, 2015, which content responded to the nature of the bidded services, as well as to the applicable legal requirements of the subject-matter. TheCALL is attached herein asEXHIBIT 1. |
8. | The eighteenth transitory article of the Income Law for the State of Baja California for Fiscal Year 2016, authorizesCEA and the State of Baja California, through theSPF, to execute the necessary legal instruments to offer theCREDITORS with an alternative and partial source of payment of the obligations of multiannual payments in public private partnerships entered into byCEA for the supply of water, in terms of theLAPPEBC, approved by the State Committee of Public Private Partnerships Projects for all of those projects formalized within fiscal year 2016. |
9. | Once the stages of thePUBLIC BIDDING were satisfied and thePROPOSITIONS filed by theCONTESTANTS were received, analyzed and valued,CEA,jointly withSIDUE, pursuant to the provisions of theLAPPEBC,issued theAWARD on June 15, 2016, resulting as winning participant thereof, the association comprised by N.S.C. AGUA, SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE, NUWATER, SOCIEDAD ANÓNIMA PROMOTORA DE INVERSIÓN DE CAPITAL VARIABLE and DEGRÉMONT, SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE. Copy of theAWARD is attached herein asEXHIBIT 2. |
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10. | In accordance with the provisions of theBASES OF THE PUBLIC BIDDING, the winningCONTESTANT of thePUBLIC BIDDING incorporated the specific purpose mercantile company which is obliged to execute thisAPP. |
STATEMENTS
I. CEA states, through its legal representative, that:
I.1. The Strategic Plan of Baja California 2013-2019 is the ruling project of the State Government, which constitutes the main pillar of the State Development System. Pursuant to the law, such system intends to be an “orderly prevision and the execution of actions that foster socioeconomic development”, through the actions of the government and the collaboration of the civil society in the “politics, economic, environmental, social and institutional life of the state”, with the purpose and objective of “improving the quality of life of the population”.
I.2. The State Development Plan 2014-2019 determines that, the challenges faced by Baja California to achieve competitiveness for the integral development of the State and its inhabitants, have been, mostly, the adaptation to changes in the technologic demands, the coverage of infrastructure services and the general logistics capacity; likewise it states that it is sought for infrastructure to detonate the economic, social, productive, competitive and sustainable development, favoring the sustainability criteria as guarantee of the wellbeing of the present and future generations.
I.3. The Ruling Axis 5, called “Infrastructure for the competitiveness and development” has as a general objective the endowing of infrastructure for the State, for a competitive development, through the efficiency of the potable water and water treatment services in the five municipalities, disposing of land, housing and quality equipment that allow the development of the potential and the integral formation of its population, under a participative and sustainable framework.
I.4. Within the Axis 5, is the sub-axis 5.5, named “potable water, sewer and sanitation”, which has as a general objective the assurance, endowment and maintenance of the supply sources, potable water, sewer and sanitation services, as well as the exploitation of the residual treated waters, in the adequate quality and quantity in our State, preserving the safekeeping of the environment.
I.5. It is a Descentralized Public Entity of the State Government, with its own authority and assets, created through decree of the executive power dated March 2, 1999, published in the official gazette of the state on March 3, 1999.
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I.6. Its authority include the following: coordinating projects related to the conduction and distribution of water by the block through aqueducts systems for the supply of the population; planning, regulating and coordinating the Potable Water, Sanitary Sewer and Treatment System of the State; participating and, if applicable, drafting the programs arising from the State Development Plan related to the aforementioned system; managing and obtaining the financing for fostering of the development of infrastructure and services; promoting, supporting and, when applicable, managing the assignations, concessions and permits; with the purpose of endowing the population centers with water; formulating alternative solutions in the use of energy sources for the operation of the conduction systems; and, the other conditions granted by the law.
I.7. For the execution of thisAPP, it is duly represented by its General Director, Mr.GERMÁN JESÚS LIZOLA MÁRQUEZ,as evidenced by the power of attorney granted by the Board of Directors, which testimony was formalized by Mr. Luis Alfonso Vidales Moreno, notary public No. 5 of this municipality, as evidenced in the public deed number 155,867, volume 4,127, dated February 10, 2015, and which was registered before the Public Registry of Commerce under number 5717341, dated February 27, 2015.
I.8.Its assets consist, among others, of the contributions made by the State and Federal Government, as well as by the water operating organisms or the Municipalities, pursuant to transitory articles third and fourth of its Creation Decree, dated March 2, 1999, and its amendments dated November 19, 2014 and January 27, 2006.CEA will make up its assets through the contributions of the water operating organisms of the State and shall convene with them the corresponding contributions for the subsequent years, prior approval of the Ministry.
I.9. It has its domicile in Bulevar Anáhuac No. 1016, Col. El Vidrio, C.P. 21080, Mexicali, Baja California.
II. THE DEVELOPER STATES, THROUGH ITS BOARD OF DIRECTORS, THAT:
II.1.It is a legally incorporated company, pursuant to the Mexican mercantile law, as evidenced in public deed number 112,154 granted by Mr. Carlos Enríquez de Rivera Castellanos, notary public number 9 of the city of Mexicali, Baja California, dated August 17, 2016, and registered under the Public Registry of Property and Commerce of the city of Mexicali, B.C., under the electronic mercantile folio number N-2016014561, dated August 22, 2016, a certified copy of which is attached to thisAPPasEXHIBIT 3.
II.2. Messrs. MICHAEL AVANT SMITH (CHAIRMAN), FREDERICK W. MCTAGGART (MEMBER)ANDLAUTARO MANUEL MILLAMAN-TERUEL (ALTERNATE MEMBER)evidence their authority as members of the Board of Directors, in terms of the public deed mentioned in the statement II.1 above, in which the authority granted to the Board of Directors is evidenced.
II.3. Its main corporate purpose is limited to the necessary activities for the compliance of the subject-matter of theAPP.
II.4 It has ample and well-founded knowledge of the necessities that motivate the execution of thisAPP, that it has duly inspected the site in which thePROJECT WORKS shall be carried out and knows the characteristics of the region, as well as the prevailing weather conditions, which it took into account for the preparation of thePROPOSAL filed in thePUBLIC BIDDING and to comply with the provisions of theCOMMITMENT LETTER attached herein asEXHIBIT 4.
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II.5.It has considered all the intervening factors in the execution of the project of theSEAWATER DESALINATION PLANT of the Municipality of Playas de Rosarito, Baja California, thus obliging itself to carry out all the necessary actions to execute the required investments and expenses to carry out theEXECUTIVE PROJECTS, the equipment, the performanceTESTS, theSET-UP OF OPPERATIONS and operation of theSYSTEM, as well as its conservation and maintenance, causing that the latter achieves the water quantity and quality commitments in a timely manner, as established in theBASES OF THE PUBLIC BIDDING, as well asCLAUSES FIRST AND SIXTEENTHof thisAPP.
II.6. Ithas, through its shareholders, affiliates and related parties, all the technical, financial and legal elements, as well as the applicable technology, equipment, materials, machinery and specialized personnel for the execution and carrying out of theWORKS subject matter of thisAPP, as well as its experience required by the foregoing.
II.7. It has knowledge of the content of theAPPLICABLE LAWS,both in the State of Baja California and those of federal nature in the different subject-matters governing the hiring and the services subject-matter of thisAPP, among which are theLAPPEBC and its Regulations, the General Law of Ecologic Equilibrium and Environmental Protection and its Regulations, as well as the National Waters Law and its Regulations, accepting to submit itself to its provisions.
II.8. It has its tax domicile in Boulevard Sánchez Taboada 10488-801, Zona Río, C.P. 22320, in the city of Tijuana, State of Baja California, which is hereby stated for the legal purposes and effects of thisAPP. Its Federal Taxpayers Registry number isARO160817RB5.
III. CESPT STATES, THROUGH ITS REPRESENTATIVE, THAT:
III.1. It is a decentralized public organism of the Government of the State of Baja California, with its own legal capacity and assets, whose authority is the operation of the potable water and sanitary sewer systems of the municipality of Tijuana Baja California, as well as the direct or contracted execution of the works of its jurisdiction and the operation and maintenance of the mentioned systems, as well as the development of activities that facilitate, directly or indirectly, the objectives for which it was created, in direct benefit of the population of the municipality of Tijuana Baja California.
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III.2. It is duly represented by its General Director, Mr.Miguel Lemus Zendejas, who evidences his authority through the designation issued byMr. Francisco Vega de Lamadrid, Constitutional Governor of the State of Baja California, which was granted on March 31, 2016, as well as with a power of attorney granted pursuant to the provisions of Article 12 of the State Commissions of Public Services of the State of Baja California, in Extraordinary Meeting of the Board of Administration on April 4, 2016, formalized under the public deed number 196,460, volume 2,367, dated April 12, 2016, granted by Mr. Gabriel Moreno Mafud, notary public number 2 of this city, which is duly registered before the Public Registry of Property and Commerce under entry 6009404 dated April 21, 2016 in the civil section and under the electronic mercantile folio number 40086*2 dated April 20, 2016, which authority has not been limited nor restricted in any manner to this date.
III.3.It has established its domicile in Bulevar Federico Benítez number 4057, 20 de Noviembre, in the city of Tijuana, Baja California, which is herein stated for the legal purposes and effects of thisAPP.
III.4. CESPT, shall guarantee the payment of the consideration of thisAPPin charge ofCEA,obliging itself to timely conduct and contribute to theADMINISTRATION TRUST all the payments thatCEA is obliged to make with respect to theCONSIDERATION established in thisAPP.
III.5. CEAandCESPTshall execute theWATER PURCHASE AND SALE AGREEMENT,through which,CESPT obliges itself to acquire fromCEA all thePOTABLE WATERproduced and delivered at theDELIVERY POINT.
IV. SPF STATES, THROUGH ITS REPRESENTATIVE, THAT:
IV.1 It is herein represented by its secretary, Mr. Antonio Valladolid Rodríguez, who evidences his authority with the appointment granted by Mr. Francisco Arturo Vega de Lamadrid, Governor of the State of Baja California, dated November 01, 2013, having the necessary authority to execute this agreement.
IV.2It has established its domicile in Edificio del Poder Ejecutivo, 4to. Piso, Calzada Independencia No. 994, 4to. Piso, Centro Cívico, C.P. 21000, Mexicali Baja California, which is herein appointed for the legal purposes and effects of thisAPP.
IV.3 TheSPF shall guarantee theCURRENT ACCOUNT LOAN through the contribution, to theMASTER GUARANTEE TRUST of the necessary resources, including without limitation, the necessary and sufficient percentage of income and rights for (i) income and rights for tax on personal remuneration, in terms of transitory article eighteenth of the 2016 Income Law for the State, and/or (ii) income arising from the state contributions, products and other state rights, pursuant to the provisions of thisAPP. Further, if necessary, theSPF shall reconstitute such affectations, in such a manner that the amount of the guarantee shall remain available throughout the term of thisAPP.
Having stated the foregoing, thePARTIES agree to submit themselves to the following Defined Terms and Clauses:
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DEFINED TERMS
Pursuant to the terminology proposed in theBASES OF THE PUBLIC BIDDING, ITS EXHIBITSandAPPENDIXES whose award caused and forms part of thisAPP, and for all its effects, the terms hereinafter enlisted shall have the meaning ascribed to them, as long as they are used with capital letters or with the abbreviation included in the corresponding term, unless it is expressly indicated otherwise and may be used in singular or plural form, as required by the intent of the corresponding sentence. The headings in thisAPP and its Exhibits are only for practical purposes, and therefore shall not be considered for their interpretation.
For the purposes of thisAPPthe following terms shall have the meaning mentioned below:
1. | CREDITORS: means the financial entities that have granted financing to theDEVELOPER under theFINANCIAL AGREEMENTS for the development of thePROJECT. |
2. | MINUTES OF CAPACITY:Document or documents that shall be issued by theDEVELOPER, duly executed by its representative, once it has complied with the norms and specifications of the Protocol ofTESTS andSET-UP OF OPERATIONS of theSYSTEM in which it shall be evidenced in a partial or total manner, as applicable, that thePROJECT WORKS corresponding to the first stage of thePROJECT comply with the establishedPRODUCTION CAPACITY, and which will be reviewed by theSUPERVISION and authorized byCEA. |
3. | MINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY: Document that shall be issued byTHE DEVELOPER upon the expiration of the term of theAPP, duly executed by its legal representative, which shall contain the inventory and conditions of the equipment, machinery and premises that integrate theSYSTEM and in which it shall be evidenced theDELIVERY by theDEVELOPER toCEA, of the ownership and operation of all the assets that integrate theSYSTEM, gratuitously and with no lien whatsoever, as well as of the real estate of theSEAWATER DESALINATION PLANT, in the conditions of normal functioning in which theSYSTEM is received. With the issuance and execution of these minutes, the effects of theAPP shall conclude, which shall be authorized and executed byCEA. |
4. | MINUTES OF COMMENCEMENT OF CONSTRUCTION: Document that shall be issued by theDEVELOPER, executed by its legal representative, in which the date of commencement of thePROJECT WORKS corresponding to the first stage of thePROJECT shall be established, onceCEA has issued itsNON-OBJECTION. |
5. | MINUTES OF COMMENCEMENT OF THE APP: Document that shall be executed by thePARTIES once the conditions for theAPP EFFECTIVENESS COMMENCEMENThave been met, and whose effects shall be the commencement of theINVESTMENT PERIOD. |
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6. | MINUTES OF COMMENCEMENT OF OPERATION: Document in which it shall be evidenced that thePROJECT WORKS corresponding to the first stage of thePROJECT have satisfactorily complied with theTESTS, which shall be prepared and executed by theDEVELOPER, reviewed by theSUPERVISION, and submitted to the consideration ofCEA, for its issuance jointly with theDEVELOPER. With the issuance of these minutes, the monthly payments of the T1 + T2 + (T3 X Q) + (T4 X Q) tariffs shall commence; in the understanding that the T1 Tariff may commence to be paid prior to the lapsing of the 37 (thirty seven) months following theAPP EFFECTIVENES COMMENCEMENT, in accordance with the terms of thisAPP. |
7. | MINUTES OF TERMINATION OF THE CONSTRUCTION: Document issued by theDEVELOPER, executed by its legal representative, reviewed by theSUPERVISION, and authorized byCEA, in which it shall be evidenced the termination of the construction and equipment of the first stage of theSYSTEM and the commencement of theTESTSandSET-UP OF OPERATIONS period. |
8. | FINANCIAL AGREEMENTS: Means each and every loan agreement, promissory note, document, guarantee agreement, mortgage, pledge agreement, subordination agreement and other documents related to the financing of debt for the construction and development of thePROJECT, as well as all of the agreements for the protection of interest rates or exchange rates related to such debt financing (with the understanding that such protection agreements shall be linked to theFINANCIAL AGREEMENTS and will not have speculative purposes), including in each case any amendment, extension, renewal, refinancing and replacement thereof (in the understanding that any refinancing shall maintain or improve the loan conditions), but excluding the financing that have been entirely paid for. |
This definition shall not consider any type of document related to the financing of the debt contracted by theDEVELOPER after theSET-UP OF OPERATIONS of thePROJECT.
9. | INTAKE WATER: The sea water that theDEVELOPER shall obtain from theSITE to be desalinated and potabilized in theSEAWATER DESALINATION PLANT, which shall comply, at least, with the quality and conditions established in thePROPOSAL. |
10. | WASTE WATER:Waste water that results from processes of theSEA WATER DESALINATION PLANT. |
11. | POTABLE WATER: The treated water, transported, stored and delivered by theDEVELOPER toCEA as a result of the desalination and treatment processes in theSEAWATER DESALINATION PLANT, which shall comply with the quality and conditions established in thePROPOSAL. |
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12. | GOVERNMENTAL AUTHORITY: Any governmental entity,whether federal, state or municipal, or any ministry, department, court,CEA, council, entity, body or similar authority comprising any such governments. |
13. | APP: This Public Private Partnership Agreement. |
14. | BASES OF THE PUBLIC BIDDING: Bases for the participation in thePUBLIC BIDDING. |
15. | LOGBOOK: Technical instrument that constitutes the means of communication between thePARTIES, in which the relevant matters and events arising during the execution of theWORKS and during theINVESTMENT PERIODshall be recorded, which shall comply with the provisions of article 126 of the Regulations of theLAPPEBC and upon conclusion of this period, a new logbook shall be opened, for theOPERATION PERIOD, which shall contain the signatures of the authorized personnel. |
16. | CHANGE IN LAW: Any change in theAPPLICABLE LAWS (including the issuance or promulgation of any otherAPPLICABLE LAW) as of the date of the filing of thePROPOSAL, to the extent that such change affects or implies the modification of the original conditions presented by theDEVELOPER in itsPROPOSAL or considered by it, including without limitation: (a) fiscal matters related to taxes, (b) customs, (c) environmental provisions, (d) labor matters related to the modification of the Minimum General Wage, published in the Federal Official Gazette, corresponding to the municipality of Playas de Rosarito, to the modifications of benefits pursuant to the Federal Labor Law and the Social Security Law, (e) the modification or imposing of any condition (additional to those originally established) for the issuance or renewal of any of the authorizations, permits, licenses or concessions applicable to thePROJECT, and (f) in general, any Federal, State and/or MunicipalAPPLICABLE LAW that modifies the original conditions submitted in thePROPOSAL. |
17. | PRODUCTION CAPACITY: The capacity measured in theMEASURING POINT, that is, at exit of theSEAWATER DESALINATION PLANT, in terms of the flow ofPOTABLE WATER obtained from desalination, conducted, deposited and delivered, which theSYSTEM shall have, and shall be guaranteed by theDEVELOPER in itsPROPOSAL, which shall be supplied as from theDATE OF COMMENCEMENT OF OPERATIONS and pursuant to thePRODUCTION STANDARDS; the initial capacity shall be verified by theTESTSof theSYSTEM, prior to theSET-UP OF OPERATIONS. |
18. | RISK CAPITAL: Amount that theDEVELOPER shall contribute with its own resources, in an amount equal to or greater than 20% (twenty per cent) of theCOST OF THE SYSTEM. |
19. | COLLECTION: Necessary works for the intake ofINTAKE WATER that shall be performed in the real estate of the Federal Electricity Commission. |
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20. | LETTER OF COMMITMENT: Document establishing the commitments acquired by theDEVELOPER, and delivered together with itsPROPOSAL, which format is included inEXHIBIT E of theBASES OF THE PUBLIC BIDDING. |
21. | ACT OF GOD: Any event that is not caused by human will, arising from inevitable phenomena caused by nature, which affects compliance of the obligations arising from theBASES OF THE PUBLIC BIDDING and theAPP, understanding as such, in an enunciative but not limitative manner, the following:INTAKE WATER quality and conditions established in thePROPOSAL, earthquakes, tsunamis, avalanches, floods, cyclones, landslide, storms, tornadoes, lightning and fires. |
22. | FORCE MAJEURE EVENT: Any event that is not caused by the will of thePARTIES, that affects the compliance of their obligations arising from theBASES OF THE PUBLIC BIDDING or theAPP, understanding as such, in an enunciative but not limitative manner, the following:INTAKE WATER quality and conditions established in thePROPOSAL, wars, insurrections, revolts, civil disturbances, mutiny, sabotage, fires, illicit acts or actions of the users of thePOTABLE WATER or of third parties, devaluation or radical changes in the economic conditions of the country, transportation disasters whether maritime, airborne, train wrecks, or terrestrial, strikes or other labor disputes in Mexico which are not caused by the breach of any labor agreement by the affected party, or strikes or other labor disputes outside of Mexico that delay the delivery of any equipment,GOVERNMENTAL AUTHORITYacts (which are not voluntarily induced by the affected party, nor occur as consequence of a breach to its obligations), anyCHANGE IN LAW that cannot be remedied pursuant to the provisions of thisAPP; the impossibility for any of thePARTIES to obtain in time or maintain the state in effect, despite their best efforts and the compliance with theAPPLICABLE LAWS, any authorization, permit, license, registry or similar of anyGOVERNMENTAL AUTHORITY, necessary to allow the affected party to comply with its obligations pursuant to thisAPP and the lack of supply of electric energy to theSYSTEM. |
23. | CESPT: The Tijuana State Commission of Public Utilities. |
24. | CFE: Federal Electricity Commission. |
25. | PUBLIC BIDDING: Public Bidding N° SIDUE-CEA-APP-2015-002. |
26. | COMPTROLLER:The Direction of Governmental Control and Evaluation. |
27. | WATER PURCHASE AND SALE AGREEMENT: Agreement executed byCEA andCESPT with the purpose of havingCEA supplying water in block toCESPT and for the latter to oblige itself to pay the necessary and sufficient resources to guarantee and pay theCONSIDERATION to theDEVELOPER pursuant to thisAPP, beingCESPT obliged to acquire all thePOTABLE WATER at theDELIVERY POINT and expressly including the obligation ofCEA to assign its collection rights arising therefrom to theADMINISTRATION TRUST. |
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28. | COST OF THE SYSTEM: It is the amount of Mex. Cy. $8,525,746,895.00 (Eight billion, five hundred and twenty five million, seven hundred and forty six thousand, eight hundred and ninety five pesos 00/100 Mexican currency) using values of February 2016 without includingIVA, which pursuant to thePROPOSAL, is the total amount of thePROJECT WORKS and theSUPERVISION pursuant to the provisions ofCLAUSE FORTY SIXTH of thisAPP, from which Mex. Cy. $5,254,484,991.00 (Five billion, two hundred and fifty four million, four hundred and eighty four thousand, nine hundred and ninety one pesos 00/100 Mexican currency) corresponds to the first stage of thePROJECT, and Mex. Cy. $3,271,261,904.00 (Three billion, two hundred and seventy one million, two hundred and sixty one thousand, nine hundred and four pesos 00/100 Mexican currency) corresponds to the second stage of thePROJECT. |
29. | COST OF THE WORKS: It is the amount of Mex. Cy. $547,135,384.00 M.N. (Five hundred and forty seven million, one hundred and thirty five thousand, three hundred and eighty four pesos 00/100 Mexican currency) using values of the month of February 2016 without including IVA, which pursuant to thePROPOSAL, is the total amount of the complementary resources pursuant to the provisions ofCLAUSE FORTY SIXTH, from which Mex. Cy. $361,917,806.00 (Three hundred and sixty one million, nine hundred and seventeen thousand, eight hundred and six pesos 00/100 Mexican currency) corresponds to the first stage of thePROJECT, and Mex. Cy. $185,217,578.00 (One hundred and eighty five million, two hundred and seventeen thousand, five hundred and seventy eight pesos 00/100 Mexican currency) corresponds to the second stage of thePROJECT. |
30. | TOTAL COST OF THE SYSTEM: It is the total amount of resources necessary to cover the items mentioned in the following chart, in accordance with the provisions ofCLAUSE FORTY SIXTH: |
1 COST OF THE SYSTEM | $ | 8,525,746,895.00 | ||
2 COST OF THE WORKS | $ | 547,135,384.00 | ||
TOTAL | $ | 9,072,882,279.00 |
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31. | CURRENT ACCOUNT LOAN: Is the line of credit in an irrevocable and contingent current account loan, which a financial institution shall grant toCEA, in reasonably acceptable terms for theCREDITORS, and which shall have as its purpose to ensure the compliance of the payment obligations ofCEA pursuant to thisAPP whenCEA does not comply with such obligations. The loan shall be for an amount equivalent to three months of payment of theCONSIDERATION, plus the correspondingIVA, subject to the provisions of section six ofCLAUSE TWENTY-NINTH. TheCURRENT ACCOUNT LOAN shall remain valid as long as the payment obligations ofCEA in favor of theDEVELOPERexist pursuant to thisAPP, and the disposition rights and resources arising from the exercise thereof shall be irrevocably affected to theADMINISTRATION TRUST. To guarantee theCURRENT ACCOUNT LOAN, theSPF, shall affect the necessary and sufficient percentage of its income and rights for the tax on personal remuneration, pursuant to transitory article eighteenth of the 2016 Income Law for the State, through theMASTER GUARANTEE TRUST. Likewise, in the event that such guarantee is no longer sufficient, theSPFshall reconstitute such affectations, in such a manner that the amount of the guarantee shall remain available throughout the term of thisAPP. |
32. | CENTRALIZED AGENCIES: The centralized agencies of the Public Administration of the State of Baja California. |
33. | RIGHT OF WAY: Strip of land in which theDEVELOPER may build the required parts of the facilities of theSYSTEM for which use, passage or occupation, the express authorization of the corresponding authorities and owners is required. |
34. | DEVELOPER: Mercantile corporation with specific purpose namedAGUAS DE ROSARITO, SOCIEDAD ANÓNIMA PROMOTORA DE INVERSIÓN DE CAPITAL VARIABLE. |
35. | BUSINESS DAY: Any day, except Saturdays and Sundays and those considered as mandatory holidays by the Federal Labor Law. |
36. | CALENDAR DAY: The days included in the calendar, without exception of any non-working days for labor purposes. |
37. | DESCENTRALIZED ENTITIES: The descentralized entities of the Public Administration of the State of Baja California. |
38. | DELIVERY: Obligation of theDEVELOPER of physically delivering toCEA theSYSTEM, all of its components and the operation of its functioning, at the expiration of the term of theAPP, in optimal functioning conditions, gratuitously and with no lien whatsoever, including without limitation the rights, licenses, permits, patents, trademarks, authorizations and everything that by fact or by law corresponds to it, pursuant to thisAPP. |
39. | PRODUCTION STANDARDS: Means the maximum and minimum limits of the production-delivery of the volumes ofPOTABLE WATER, expressed in percentages and relating to thePRODUCTION CAPACITY of theSYSTEM. |
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40. | ESTIMATE: The document describing the amount of fully concluded and executedWORKS, within the corresponding month pursuant to theCALENDARED SCHEDULE, the advance reports and theINVESTMENT PERIOD, which theDEVELOPER shall submit to theADMINISTRATION TRUST, authorized by theSUPERVISION andCEA,for the payment process. |
41. | MILESTONES: Activities that define the execution of a structure or component of each of thePROJECT WORKS and which theDEVELOPER shall submit in aCALENDARED SCHEDULE. The cost of each milestone shall be established by theDEVELOPER through a catalogue which sum shall represent the total of the construction of each of the works at aFIXED PRICE, which during theINVESTMENT PERIOD, shall be used solely for the control of the progress of the works, to ensure that theDEVELOPERmay obtain the resources from theFINANCIAL AGREEMENTS, pursuant to theESTIMATES approved by theSUPERVISION. TheMILESTONES shall have the units that perfectly describe the scope of each work, as invariably, eachMILESTONE shall have an amount in the corresponding catalogue. |
42. | AWARD: Resolution ofCEA thorugh which the result of thePUBLIC BIDDING was determined and theAPP was awarded to the consortium comprised by N.S.C. AGUA, S.A. DE C.V., NUWATER, S.A.P.I. DE C.V. and DEGRÉMONT, S.A. DE C.V. |
43. | DATE OF COMMENCEMENT OF CONSTRUCTION:Date that marks the commencement of the works provided by thisAPP and which shall be determined by the date of issuance, execution and approval of theMINUTES OF COMMENCEMENT OF CONSTRUCTION. |
44. | DATE OF COMMENCEMENT OF OPERATIONS: Date that marks the commencement of the operations, conservation and maintenance of theSEAWATER DESALINATION PLANT and which shall be determined by the date of issuance, execution and approval of theMINUTES OF COMMENCEMENT OF OPERATIONS. |
45. | ADMINISTRATION TRUST:Irrevocable trust agreement for the investment, administration and source of payment that thePARTIES shall contract, as trustors, pursuant to the general guidelines for theADMINISTRATION TRUST established inAPPENDIX 3of theBASES OF THE PUBLIC BIDDING, in the terms required by the financing, and pursuant to thisAPP, which purpose shall be to receive and administer all the economic resources related with thePROJECT, from the date of its creation until its liquidation and extinction, with the purpose of fulfilling the purposes established in theAPP, pursuant to the terms and conditions therein stablished. |
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46. | MASTER GUARANTEE TRUST: Irrevocable guarantee trust agreement that shall be contracted by theSPF as trustor, to affect in guarantee, to the satisfaction of the creditor institution of theCURRENT ACCOUNT LOAN and for the benefit of both stages of thePROJECT and of other projects of the Government of the State of Baja California, the necessary resources for the tax on personal remuneration, pursuant to transitory article eighteenth of the 2016 Income Law for the State, in the understanding that, from all the resources affected to theMASTER GUARANTEE TRUST, the corresponding percentage shall be allocated as exclusive guarantee of thePROJECT. Further, in the event that such guarantee is no longer sufficient, theSPFshall reconstitute such affectations, in such a manner that the amount of the guarantee shall remain available throughout the term of thisAPP. TheMASTER GUARANTEE TRUST shall identify, in a precise manner, the resources corresponding to the guarantee established for the benefit of thePROJECT. |
47. | CONSTRUCTION GUARANTEE: Means the bond issued in terms of theAPP, equal to 10% (ten percent) of theCOST OF THE SYSTEM, which theDEVELOPER shall deliver toCEA within the term established in Clause Twenty Eighth, to guarantee compliance of its obligations arising from theAPP, including the payment of the conventional penalties caused by its breach of theAPP with respect to the construction, equipment andTESTS of theSYSTEM. |
48. | OPERATION GUARANTEE: Means the bond issued in terms of theAPP, equal to 10% (ten percent) of the yearly payment of theCONSIDERATION in force at that time for the portion corresponding to the T2 + (T3 X Q) Tariffs, using the last invoice paid to theDEVELOPER, or in the event of the first year of theOPERATION PERIOD,the amount corresponding to the production volume communicated to theDEVELOPERpursuant to Clause Sixteenth of thisAPP shall be used as the base, which theDEVELOPER, shall deliver toCEA on theDATE OF COMMENCEMENT OF OPERATIONSand which shall be renewed yearly within the first ten calendar days following the commencement of the corresponding tax year and shall remain in force until theDELIVERY and operation of theSYSTEM toCEA, and the delivery of theAPP TERMINATION GUARANTEEby theDEVELOPER toCEA, pursuant to thisAPP, moment in which such guarantee shall be returned to theDEVELOPER. This guarantee substitutes theCONSTRUCTION GUARANTEE, and shall be applied, if applicable, to guarantee the compliance of its obligations arising from theAPP, and the payment of the conventional penalties relating to the operation and maintenance of theSYSTEM. |
49. | APP TERMINATION GUARANTEE: Means the bond equal to the yearly payment of T2 plus (T3 X Q) for the last year of operation, which theDEVELOPER shall deliver toCEA to replace theOPERATION GUARANTEE, with a term of 6 (six) months counted as from the date of execution of theMINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY in terms of thisAPP,to guarantee the hidden defects in which it incurred during the operation period of theSYSTEM or quality defects of the materials used, issued in terms of theAPP. |
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50. | APP EFFECTIVENESS COMMENCEMENT: The date on which the effectiveness of theAPP commences, once the conditions ofClause FORTY FOURTH have been met. |
51. | INPC: National Consumers Prices Index, published monthly by the National Institute of Statistics and Geography in the Official Gazette of the Federation and, in absence thereof, the index established in its place to measure the increase of prices. |
52. | IVA: Value Added Tax pursuant to the Value Added Tax Law published in the Official Gazette of the Federation on December 29, 1978, as amended. |
53. | LAPPEBC: Public Private Partnerships Law for the State of Baja California. |
54. | APPLICABLE LAWS: All the Mexican laws, treaties, regulations, decrees, Mexican Official Standards, rules, decisions, orders, authorizations, resolutions, jurisprudence, providences, interpretations or directives issued by anyGOVERNMENTAL AUTHORITY with jurisdiction and/or competence relating to the subject-matter of thePUBLIC BIDDING and theAPP. |
55. | WASTE WATER CONDUCTION LINE: The conduction line for the transport ofWASTE WATER or any liquid residue from theSEAWATER DESALINATION PLANT until the final point of disposition. |
56. | LPS: Water volume unit established in liters per second. |
57. | ENVIRONMENTAL IMPACT MANIFEST: Document that shall be drafted and submitted by theDEVELOPER to the competentGOVERNMENTAL AUHTORITY, in terms of the applicable provisions of the General Law of Ecologic Equilibrium and Environmental Protection and its Regulations respect of the Evaluation of the Environmental Impact, through which it is informed, based on studies, the potential and significant environmental impact, , that thePROJECT WORKSand operation of theSYSTEM would cause, as well as the way to avoid or mitigate it, in the event that it is negative. |
58. | QUALITY ASSURANCE HANDBOOK: The handbook to ensure the quality of the design, project and construction of theSYSTEM, which shall be based in the preliminary quality assurance handbook delivered as part of thePROPOSAL. |
59. | OPERATION AND MAINTENANCE HANDBOOK: Is the document that theDEVELOPER shall deliver toCEA, for its approval, with at least 1 (one) month of anticipation to theDATE OF COMMENCEMENT OF OPERATIONS. This document shall contain a full description of the works and of all the equipment that comprises theSYSTEM, as well as all the procedures relating to the development of the water treatment process and the aqueduct, as well as the data base to sustain the maintenance program of all the mechanical and electromechanical equipment. |
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60. | MUNICIPALITIES: The Municipalities of the State of Baja California and their public entities. |
61. | NON-OBJECTION: Means the document or the implied acceptance issued byCEA and/or theSUPERVISION, by which the partial or complete verification of theEXECUTIVE PROJECT shall be evidenced. |
62. | CIVIL WORKS: The structures for theCOLLECTION or intake,CONDUCTION LINE, pumping sumps, pumping stations, auxiliary and complementary crossing works, and any other work required by theEXECUTIVE PROJECT in connection with the construction andSET-UP OF OPERATIONSof theSYSTEM, which shall be prepared in accordance with the technical specifications, including but not limited to: clearance, excavation clearance, excavations, leveling, embankments, cuts, breakwaters, wells, filtering galleries, asphalted and non-asphalted areas, sewer drains and pipelines, contention walls, foundations, dockages, tanks, tunnels, bridges, siphons, crossing structures, green and ecologic areas, direct maritime intake, drilling of wells or sumps, parking and buildings areas, among others. |
63. | COLLECTION WORKS: Also known as intake works, is the structure or group of structures whose design, construction and operation complies with the purpose of capturing, extracting and collectingINTAKE WATER, in this case from the sea, for its delivery to theSEAWATER DESALINATION PLANT. It shall be regularly comprised byCIVIL WORKS and electromechanical equipment, being possible for it to be the waste water intake from the Juarez thermoelectric plant. |
64. | PROJECT WORKS: All the permits, authorizations and licenses; the planning, engineering, the supply of material and equipment, theCIVIL WORKS, theCOLLECTION WORKS, theELECTROMECHANICAL WORKS, the auxiliary facilities, theTESTS, the technical support and the other works and services of any nature, that shall be supplied or carried out by theDEVELOPER and which are within the scope specified in theAPP for the termination of theSYSTEM, distinguishing from the works of each of the stages of thePROJECT. |
65. | ELECTROMECHANICAL WORKS: The incorporation of all the equipment and control systems, ducts, electric systems, instrumentation and accessories related with theEXECUTIVE PROJECT, in accordance to the technical specifications. |
66. | PARTIES:CEA and theDEVELOPER. |
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67. | CONSTRUCTION PERIOD: Means the period of 34 (thirty-four) months (subject to any applicable extensions pursuant to thisAPP) for the preparation of theEXECUTIVE PROJECT, construction and equipment of theSYSTEM, counted from the date of theMINUTES OF COMMENCEMENT OF CONSTRUCTION. |
68. | INVESTMENT PERIOD: Means the period comprised by 36 (thirty-six) months (subject to any applicable extensions pursuant to thisAPP) counted from the date of theMINUTES OF COMMENCEMENT OF THE APP, during which theDEVELOPER shall carry out the preparation of theEXECUTIVE PROJECT,theCIVIL WORKSand theTESTS for theSET-UP OF OPERATIONS of theSYSTEM andPROJECT WORKS. |
69. | OPERATION PERIOD: Means the period comprised by 37 (thirty-seven) years (subject to any applicable extensions pursuant to thisAPP) during which theDEVELOPER shall be in charge of the operation, conservations, update and maintenance of theSYSTEM to extract, collect, desalinate, potabilize, conduct and supply the producedPOTABLE WATER to theDELIVERY POINT toCEA and to dispose of theWASTE WATER, pursuant to theBASES OF THE PUBLIC BIDDING, counted from the issuance of theMINUTES OF COMMENCEMENT OF OPERATIONS. |
70. | TESTING PERIOD: Means the period of 2 (two) months (subject to any applicable extensions pursuant to thisAPP) to carry out theTESTS, counted from the date of theMINUTES OF TERMINATION OF THE CONSTRUCTION. |
71. | EXPERT: The specialized person in the subject-matter, appointed pursuant to thisAPP, to solve any technical controversy. |
72. | PESOS: Legal currency of the United States of Mexico. |
73. | CONTIGENCIES OR SAFEKEEPING ACTIONS PLAN: Means the group of structural actions and normativity proposed and budgeted by theDEVELOPER to guarantee compliance of the production-delivery ofPOTABLE WATER before negative unforeseeable events that force a temporary suspension due to failure or damages to any part of theSYSTEM for the time of its repair and the reestablishment of the ordinary operating conditions. |
74. | SEAWATER DESALINATION PLANT: Industrial premises that shall be built by theDEVELOPER, either by itself or through third parties, for the management, pre-treatment, desalinization and potabilization (post-treatment) of theINTAKE WATER, with a normal production capacity ofPOTABLE WATER in 2 stages, each of 2.2 m3/second during all theOPERATION PERIODfor each stage. |
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75. | FIXED PRICE: Means the price that theDEVELOPER assigned to each of theMILESTONES defining the execution of a structure, equipment or component of the works corresponding to theSYSTEM, pursuant to Format 1 of theECONOMIC PROPOSAL and which shall serve to determine the payment of theESTIMATE of the works. |
76. | CALENDARED SCHEDULE: Document that shall be delivered by theDEVELOPER and which shall contain the dates of each of the activities that it shall develop to comply with eachMILESTONE. |
77. | PROPOSAL: The group of documents requested in theBASES OF THE PUBLIC BIDDINGjointly integrated by theTECHNICAL PROPOSALand theECONOMIC PROPOSAL. |
78. | ECONOMIC PROPOSAL: The portion of thePROPOSAL containing the Economic and Financial information of thePROJECT. |
79. | TECHNICAL PROPOSAL: The portion of thePROPOSAL containing the Technical information of thePROJECT. |
80. | PROJECT:Construction, financing and operation of a desalination plant in the Municipality of Playas de Rosarito, with a capacity of up to 4.4 m3/second in two stages: the first with a capacity of 2.2 m3/second, and a aqueduct to the delivery point in tank 3, Municipality of Tijuana and the expansion of the mentioned tank to 20,000 m3; and the second with a capacity of 2.2 m3/second, and a aqueduct from tank 3 to the potabilization plant of El Florido, Municipality of Tijuana, including the design, preparation of the executive project, construction, electromechanic equipment and functionality tests of the desalination plant and the aqueducts, as well as the operation, conservation and maintenance, including the conduction and delivery of up to 4,400 liters per second, the treatment and disposal of the waste water, during an operation period of 37 years. |
81. | EXECUTIVE PROJECT: Group of detailed activities that shall be carried out by theDEVELOPER, within which the following shall be carried out, in an enunciative but not limitative manner, basic, specific, complementary and detailed studies for theSYSTEM, as well as the technical documents, specifications, draft projects, draft budgets, programs, handbooks and other necessary information for the design, procedures, project, budget, acquisition, supply engineering, equipment, construction, installations, premises,TESTS,SET-UP OF OPERATIONS, operation, conservation, maintenance, technological updates andDELIVERYof theSYSTEM described in itsPROPOSAL, to the satisfaction ofCEA. |
82. | TESTS: Preset procedures for the verification of the functionality and quality of theSYSTEM that shall be carried out in each unit of collection, production, conduction and management ofPOTABLE WATER andWASTE WATER, pumping, operating within the design conditions, both manually and automatically, in accordance with theTESTS protocol drafted by theDEVELOPER, following the execution of theAPP. |
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83. | SET-UP OF OPERATIONS:The moment in which theTESTING PERIODis concluded and therefore theSYSTEM is considered to be in satisfactory operation conditions, commencing theOPERATION PERIOD. |
84. | DELIVERY POINT: The delivery point shall be at the Tank 3, for the first stage of thePROJECTand at El Florido for the second stage of thePROJECT, as established in theBASES OF THE PUBLIC BIDDING. If applicable,CEA may request in writing, a newDELIVERY POINT, or additionalDELIVERY POINTS, pursuant to Clause Third, section 6 of thisAPP, in the understanding that theDEVELOPER shall be responsible for the volume and quality of thePOTABLE WATER until theMEASURING POINT. |
85. | MEASURING POINT; The measuring point of thePOTABLE WATER, for purposes of billing theCONSIDERATION, as well as the quality of thePOTABLE WATER, shall be installed at the exit of theSEAWATER DESALINATION PLANT, regardless of the installation of additional measuring point in theSYSTEM for other purposes. |
86. | WORKS RESIDENT: Public officer appointed in writing byCEA andSIDUE, having the sufficient knowledge, skills, experience and capacity to carry out the supervision on behalf ofSIDUEandCEA and to agree with theDEVELOPER the changes and amendments to theSYSTEM. He shall have the authority determined in thisAPP and in the provisions of theRLAPPEBC. |
87. | RLAPPEBC:Regulations of the Public Private Partnerships Law for the State of Baja California. |
88. | SCT: Ministry of Communication and Transport. |
89. | SEMARNAT: Secretary of the Environment and Natural Resources |
90. | EASEMENT: Real rights over real estate of third parties, imposed by legal provision or agreed for the benefit of the real estate that theDEVELOPER uses for the construction or operation of thePROJECT WORKS comprising theSYSTEM, in terms of the federal civil legislation or the civil legislation of the State of Baja California. |
91. | SHCP: Ministry of Finance and Public Credit. |
92. | SIDUE:Ministry of Infrastructure and Urban Development of the State of Baja California. |
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93. | SYSTEM: The group of necessary premises for the delivery toCEA of the yearly volume ofPOTABLE WATER, including, without limitation, theCOLLECTION WORKS and collection ofINTAKE WATER, desalination treatment thereof through the proposed method, potabilization, regulation, pumping and conduction to theDELIVERY POINT, supply of energy, as well as those relating to the management and disposal ofWASTE WATER, supply and regulation of electric energy. |
94. | SITE: The real estate in which theDEVELOPER shall build theCOLLECTION WORKS ofINTAKE WATER, treatment and desalination thereof, potabilization, regulation, pumping and conduction lines to theDELIVERY POINT, which must be authorized byCEA. |
95. | TDS:Total dissolved solids. |
96. | SUPERINTENDENT: The representative of theDEVELOPER to whom the latter has granted the most ample power of attorney possible for acts of administration; who shall be in charge of and the responsible for the development of all theWORKS, stages and aspects of theEXECUTIVE PROJECT, jointly, from the first coordination meeting for the commencement of theWORKS with theWORKS RESIDENT and theSUPERVISION, until the delivery of its premises toCEA. |
97. | SUPERVISION: The company that shall be hired by theADMINISTRATION TRUST prior instruction of theDEVELOPER, to be chosen by the latter among three duly qualified nominees proposed byCEA to its sole discretion, to verify that the works for preparation of theEXECUTIVE PROJECTS, construction, equipment andTESTS of theSYSTEM are carried out pursuant to the specifications and quality of the established laws and theAPP, which shall have the authority determined in theAPP and in article 107 of theRLAPPEBC. |
98. | TERMS OF REFERENCE: The document that comprises an integral part of theBASES OF THE PUBLIC BIDDINGand which contains the characteristics, scope, technical specifications and other aspects relating to theSYSTEM, attached asAPPENDIX 1 of theBASES OF THE PUBLIC BIDDING. |
99. | WORKS:All the actions relating to theEXECUTIVE PROJECT, construction of the works, equipment, facilities, elements, procedures, compliance of norms, analyses,TESTS, measurements, necessary supply and services for the execution of theEXECUTIVE PROJECT and particularly of theSYSTEM mentioned in theBASES OF THE PUBLIC BIDDING. |
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CLAUSES
FIRST.- SUBJECT-MATTER OF THE APP.
CEA entrusts theDEVELOPER and the later obliges itself to render in favor of the former the services, for the:
“CONSTRUCTION, FINANCING AND OPERATION OF A DEASLINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
CONSISTING OF:
A DESALINATION PLANT WITH A CAPACITY OF UP TO 4.4 M3/SECOND IN TWO STAGES: THE FIRST WITH A CAPACITY OF 2.2 M3/SECOND, AND AN AQUEDUCT TO THE DELIVERY POINT IN TANK 3, MUNICIPALITY OF TIJUANA AND THE EXPANSION OF THE MENTIONED TANK TO 20,000 M3; AND THE SECOND WITH A CAPACITY OF 2.2 M3/SECOND, AND AN AQUEDUCT FROM TANK 3 TO THE POTABILIZATION PLANT OF EL FLORIDO, MUNICIPALITY OF TIJUANA, INCLUDING THE DESIGN, PREPARATION OF THE EXECUTIVE PROJECT, CONSTRUCTION, ELECTROMECHANIC EQUIPMENT AND FUNCTIONALITY TESTS OF THE DESALINATION PLANT AND THE AQUEDUCTS, AS WELL AS THE OPERATION, CONSERVATION AND MAINTENANCE, INCLUDING CONDUCTION AND DELIVERY OF UP TO 4,400 LITERS PER SECOND, TREATMENT AND DISPOSAL OF THE WASTE WATER, DURING AN OPERATION PERIOD OF 37 YEARS.
For purposes of which theDEVELOPER shall carry out thePROJECT, pursuant to the provisions of thisAPPand its Exhibits.
For such purposes, the yearly guaranteed volume of both stages of thePROJECT shall be of 131.2 million cubic meters, which are the equivalent to 4,162 LPS ofPOTABLE WATER, from which 65.6 million cubic meters, equivalent to 2,081LPS,shall befor the first stage, and 65.6 million cubic meters, equivalent to 2,081LPS, shall be for the second stage, at theMEASURING POINT, that is, at the exit of theSEAWATER DESALINATION PLANT, notwithstanding its conduction to theDELIVERY POINT, as well as the disposal of theWASTE WATER.
The construction of the second stage of thePROJECT shall start so that the commencement of operations of such second stage is carried out on July 2024. To that effect, in due course, thePARTIES shall agree in writing the specific terms and conditions for the second stage of thePROJECT, as well as those that are different to the provisions of thisAPP, applicable to the second stage, including without limitation, the start of the corresponding construction and operations. The foregoing pursuant to the provisions of thePROPOSAL and theBASES OF THE PUBLIC BIDDING.
CEA acknowledges that in the event that the economic conditions at the time of start of the construction of the second stage of thePROJECT are different to those considered by theDEVELOPER in itsPROPOSAL, the investment values shall be reviewed, which could imply an adjustment to theCONSIDERATION.
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For the rendering of the mentioned services, it shall be necessary to carry out the basic and complementary studies and the complete construction of theSYSTEM complying with the quality and quantity conditions determined for thePOTABLE WATER inCLAUSE SIXTEENTHNof thisAPP, in addition to its operation, equipment replacement and maintenance for a period of XX 37 (thirty-seven) years, counted as from theDATE OF COMMENCEMENT OF OPERATIONS, which is coincident with the date of execution of theMINUTES OF COMMENCEMENT OF OPERATION, for which theDEVELOPER must finance theTOTAL COST OF THE SYSTEM.
Upon expiration of the mentioned term, theDEVELOPER shall deliver the ownership of theSYSTEMand its operation, gratuitously and without liens, in favor ofCEA, for which purpose, all the assets comprising theSYSTEM, including without limitation theSEAWATER DESALINATION PLANT, shall be in functioning conditions under the ordinary operation conditions for which they were constructed, pursuant to thisAPP and its exhibits, except for the ordinary wear and tear that theSYSTEM suffers to such date.
In absence of an express provision in thisAPP, in theLAPPEBC and its Regulations, the following will be applicable in a suppletory manner:
I. | The Code of Commerce; |
II. | The Civil Code for the State of Baja California; |
III. | The Law of Procedures for Acts of the Public Administration of the State of Baja California; and |
IV. | The Civil Procedures Code for the State of Baja California. |
SECOND.- TERM OF THE APP
The effectiveness of thisAPP shall commence on the date of execution of thisAPP and shall conclude 37 (thirty-seven) years after the date of execution of theMINUTES OF COMMENCEMENT OF OPERATIONSof the first stage of thePROJECT, date on which thePERIOD OF OPERATION concludes, which shall coincide with the date of execution of theMINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY.
The term of theAPP includes theINVESTMENT PERIOD of the first stage of thePROJECT,which shall commence once theMINUTES OF COMMENCEMENT OF THE APP have been issued.
The term of theAPP may only be interrupted or early terminated under the conditions established in thisAPP and in theLAPPEBC and theRLAPPEBC.In which case, the applicable tariffs of theCONSIDERATION shall continue to be payable byCEA pursuant to the provisions of thisAPP.
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THIRD. DESCRIPTION OF THE WORKS.
To comply with the subject-matter of thisAPP, theDEVELOPER obliges itself to carry out theWORKS which scope is established in Chapter 1.5 of theAPPENDIX 1 of theBASES OF THE PUBLIC BIDDINGcontained in theEXHIBIT 5 of thisAPP. TheWORKS shall include, but will not be limited to:
1. | The planning, preparation of basic and complementary studies, designs, budgeting,EXECUTIVE PROJECT, construction, equipment and maintenance of thePROJECT WORKS for the correct operation of theSYSTEM. |
2. | The preparation and delivery of theQUALITY ASSURANCE HANDBOOK prior to theMINUTES OF COMMENCEMENT OF CONSTRUCTION, which is attached to thisAPPasEXHIBIT 6. |
3. | The preparation and delivery of the Protocol ofTESTSandSET-UP OF OPERATIONS of theSYSTEM, prior to theMINUTES OF COMMENCEMENT OF OPERATION,which shall be attached to thisAPPasEXHIBIT 7. |
4. | Carry out theTESTS andSET-UP OF OPERATIONS of theSYSTEM. |
5. | The assurance, operation, equipment replacement, conservation and maintenance of theSYSTEM during 37 (thirty-seven) years, counted as from the issuance and execution of theMINUTES OF COMMENCEMENT OF OPERATION and until the termination of theOPERATION PERIOD and execution of theMINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY. |
6. | The delivery of the guaranteed yearly volume ofPOTABLE WATER established inClause FIRST,during theOPERATION PERIOD, supplied at theDELIVERY POINT. In the event thatCEA requires so in writing, theDEVELOPER shall be obliged to deliver part of the volume ofPOTABLE WATER at places different to theDELIVERY POINT; in this latter event, the additional costs of construction of the facilities and the operation and maintenance required for such delivery, including the permits, licenses and everything related therewith, shall be at the expense ofCEA, and theCONSIDERATION for the monthly supply ofPOTABLE WATER shall be such established in terms of thisAPP with the corresponding necessary adjustments. The foregoing in the understanding that in any event, the compliance by theDEVELOPER regarding the volume or quality of water required in thisAPP shall be measured at theMEASURING POINT, that is, at exit of theSEAWATER DESALINATION PLANT. |
7. | TheDELIVERY of theSYSTEM and its operation toCEA, gratuitously and without liens and in ordinary functioning conditions, upon expiration of the term of thisAPP, pursuant to ClauseTWENTY FIFTHandEXHIBIT 17of thisAPP. |
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TheDEVELOPER shall be obliged to deliver toCEA the necessary reports to comply with the provisions of theQUALITY ASSURANCE HANDBOOK,during the time in which it operates theSEAWATER DESALINATION PLANT. The preparation and delivery of these reports shall be monthly during the first 5BUSINESS DAYS of each month and extraordinarily prior written request byCEA with an anticipation of at least 5BUSINESS DAYS.
FOURTH. TERMS FOR EXECUTION.
The preparation of theEXECUTIVE PROJECT, construction, equipment andTESTSof the first stage of thePROJECTshall be carried out by theDEVELOPER within a term that shall not exceed 36 (thirty-six) months counted as from the date of theMINUTES OF COMMENCEMENT OF THE APP, considering in an enunciative but not limited manner, 6 (six) months for the preparation of theEXECUTIVE PROJECT, 28 (twenty-eight) months for the construction and equipment of the first stage of thePROJECT and 2 (two) months for theTESTING PERIOD. The foregoing, pursuant to the proposedCALENDARED SCHEDULE, that is attached hereto asEXHIBIT 8. Notwithstanding the foregoing, thePARTIES agree that as long as theINVESTMENT PERIOD of the first stage of thePROJECT does not exceed 36 (thirty-six) months, theDEVELOPER may carry out adjustments in the partial terms mentioned above, consequently adjusting the corresponding definitions.
Irrespective of the foregoing or of any other disposition contrary to the contained in theBASES OF THE PUBLIC BIDDING,in the event of delays in theCALENDARED SCHEDULE that are not attributable to theDEVELOPER or that result from anACT OF GOD, aFORCE MAJEURE EVENT or aCHANGE IN LAW, the terms referred in this clause shall be extended for a period equivalent to the delay attributed to such circumstances. Likewise,CEA shall compensate theDEVELOPER for the costs and expenses that such delay would represent, by means of an adjustment to the T1 (FIXED INVESTMENT TARIFF) to reflect such costs and expenses as part of the investment, provided they are duly justified and documented. On the other hand, in the event of a delay to theCALENDARED SCHEDULE due to non-justified causes exclusively attributable to theDEVELOPER, the financial costs and incurred expenses during the additional terms, as long as such are prolonged beyond theINVESTMENT PERIOD corresponding to the first stage of thePROJECT,shall be fully covered by theDEVELOPER. The foregoing, except for the additional costs incurred by theDEVELOPERdue to (i) a breach byCEA to any of its obligations under thisAPP¸(ii) anACT OF GOD,FORCE MAJEURE EVENT orCHANGE IN LAW; (iii) additional or different works or services to those set forth in thisAPP; and (iv) delays or suspensions in the rendering of the services, as requested by or attributable to,CEA; in such events, the additional costs shall be considered in the payment of theCONSIDERATION, which shall be increased in the additional cost incurred or to be incurred by theDEVELOPER in the corresponding invoice.
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1. | EXECUTIVE PROJECT. |
(a) | TheDEVELOPER shall be in charge of preparing and delivering toCEA and theSUPERVISION theEXECUTIVE PROJECT of thePROJECT, or its partialities, within the term established in thePROPOSAL submitted in thePUBLIC BIDDING, which shall not exceed 6 (six) months, counted as from the date of execution of theMINUTES OF COMMENCEMENT OF THE APP.Pursuant to the following section (b), theDEVELOPER shall be entitled to submit partially theEXECUTIVE PROJECTS for each of the works, to theNON-OBJECTIONofCEA and theSUPERVISION,in such a manner that it can comply with the terms foreseen for the construction of thePROJECT WORKS within theCALENDARED SCHEDULE. |
ThePARTIES acknowledge and agree that, in benefit of thePROJECT, theDEVELOPER, at its exclusive discretion, may commence the preparation of theEXECUTIVE PROJECT or, if applicable, of its partialities, before theAPP EFFECTIVENESS COMMENCEMENT.
(b) | CEA and theSUPERVISION shall jointly have a maximum term of 30 (thirty)BUSINESS DAYS, counted as from the delivery of theEXECUTIVE PROJECT, in the event that such is submitted in its entirety and not in partialities, to grant theNON-OBJECTION or to formulate observations to theEXECUTIVE PROJECT of thePROJECT, to verify that it conforms to the provisions of theBASES OF THE PUBLIC BIDDINGand theTECHNICAL PROPOSAL.In the event thatCEAand theSUPERVISION do not make any statement during the mentioned term, as applicable, it shall be understood that theEXECUTIVE PROJECT has theNON-OBJECTIONand, therefore, theDEVELOPER shall be entitled to commence the construction of the corresponding works. In the event that there were no observations whatsoever, the documents delivered by theDEVELOPER shall be considered as approved.CEA and/or theSUPERVISION, shall have a single opportunity to make observations to theEXECUTIVE PROJECT or, if applicable, to its partialities. Once such observations are made, in the event that they are applicable, theDEVELOPER shall have a term of 10 (ten)BUSINESS DAYS to carry out the corresponding adjustments to theEXECUTIVE PROJECT or, if applicable, to its partialities and submit them toCEA and theSUPERVISION, solely for information purposes, and not for purposes of a new review, provided that it has complied with the viable observations.CEA shall not make unjustified or unreasonable observations to theEXECUTIVE PROJECT. Upon lapsing of the term of 30 (thirty)BUSINESS DAYS counted as from the delivery of theEXECUTIVE PROJECT, in the event that such is delivered in its entirety and not in partialities, and if applicable, the additional term of 10 (ten)BUSINESS DAYS for adjustments, theDEVELOPER may proceed to commence the construction of thePROJECT WORKS. |
Notwithstanding the foregoing, thePARTIES agree that theDEVELOPER may make partial deliveries toCEA and theSUPERVISIONof theEXECUTIVE PROJECTto allowCEAand theSUPERVISIONto carry out the review in partialities instead of in its entirety, in the understanding that if theDEVELOPER elects to make partial deliveries of theEXECUTIVE PROJECT of thePROJECT, once the corresponding partiality has been submitted,CEA and theSUPERVISION,shall have, jointly, the term mentioned in the chart below to verify that theEXECUTIVE PROJECT complies with the provisions of theBASES OF THE PUBLIC BIDDINGand theTECHNICAL PROPOSAL contained in thePROPOSAL. It the event thatCEAor theSUPERVISIONdo not make any statement during such terms, as applicable, it shall be understood that suchEXECUTIVE PROJECT has theNON-OBJECTION and therefore theDEVELOPER shall be entitled to commence the construction of the corresponding works.
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Executive Project Work | Term of CEA and of the SUPERVISION for review | |
Civil Works Project | 10 business days | |
Electromechanical Works Project | 10 business days | |
Maritime Collection Works Projects | 10 business days | |
Potable Water Conduction Lines Project | 10 business days |
In the event that theEXECUTIVE PROJECT require, in a reasonable manner and considering the common practices of the industry, technical adjustments as a result of the execution of thePROJECT in the field or arising from any other cause, including errors, imprecisions or incongruences in theEXECUTIVE PROJECT itself, theDEVELOPER shall propose toCEA the amendments that it deems pertinent. In the event thatCEAdetermines that such are applicable, theDEVELOPER shall carry out the modifications at its expense, without any liability or obligation forCEA of contributing any additional resources, of any kind.
(c) | The delivery andNON-OBJECTION,whether total or partial, shall be evidenced in each document or blueprint delivered by theDEVELOPER toCEA and theSUPERVISION, by means of a seal that indicates the date of reception of the document byCEAand theSUPERVISIONand, if applicable, the date of theNON-OBJECTION by them.. TheNON-OBJECTION may be implied, for the simple lapse of the previously mentioned terms, in which case it shall not require written evidence expressing theNON-OBJECTION. |
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2. | CONSTRUCTION, EQUIPMENT, TESTS AND SET-UP OF OPERATIONS. |
(a) | The construction and equipment of thePROJECT WORKS, shall be concluded in a period of up to 34 (thirty four) months (subject to the extensions provided in thisAPP), counted as from theAPP EFFECTIVENESS COMMENCEMENT and shall conclude on the date of issuance of theMINUTES OF TERMINATION OF CONSTRUCTION. Upon termination of the construction of all the works of theSYSTEM, theDEVELOPER shall have 2 (two) months to carry out theTESTS. |
(b) | During the construction and equipment stage of thePROJECT WORKS, per request of theDEVELOPER,CEA shall inspect the progress of thePROJECT WORKS on a monthly basis, based on theESTIMATES of thePROJECT WORKS prepared by theDEVELOPER pursuant to theCALENDARED SCHEDULEand, if applicable, shall issue partial minutes with respect to the satisfactory termination thereof. |
(c) | While theDEVELOPER carries out theTESTS of theSYSTEM, it shall notify in writing toCEAand to theSUPERVISION, proposing a draft of theMINUTES OF CAPACITY, for them to be able to verify the conditions in which thePARTIESshall issue theMINUTES OF COMMENCEMENT OF OPERATION. To that effect,CEA and theSUPERVISION shall have a period of 5 (five)BUSINESS DAYS to verify such conditions during theTESTING PERIOD. |
(d) TheMINUTES OF CAPACITY shall not be issued in the event that thePROJECTdoes not comply with the capacity established in thisAPP and its Exhibits, which shall be verified and recorded byCEA and theSUPERVISION. In such event, only to the extent that theCAPACITY MINUTES may not be issued in the term scheduled for theINVESTMENT PERIOD due to causes exclusively attributable to theDEVELOPER, theDEVELOPER shall be subject to the payment of the applicable conventional penalties pursuant to the terms of the applicable provisions of thisAPP and shall be obliged to maintain in force and effect theCONSTRUCTION GUARANTEE until the issuance of theMINUTES OF CAPACITY.
ThePARTIES acknowledge and agree that theINVESTMENT PERIOD shall be automatically extended and without any liability for theDEVELOPER, during the time (i) required by theDEVELOPER to carry out the adjustments to theEXECUTIVE PROJECT that if applicable, result inviable; and (ii) that it takes to verify the conditions in which theMINUTES OF CAPACITY shall be issued, in the event that it exceeds the 5 (five)BUSINESS DAYS term mentioned in section (c).
FIFTH. EXECUTION OF THE PROJECT AND FINANCING.
TheDEVELOPER obliges itself to carry out the activities that comprise thePROJECT, in accordance with thisAPP, theEXECUTIVE PROJECT and complying with the specifications established in thisAPPand its Exhibits. For such purposes, theDEVELOPER shall provide all the materials, equipment, tools and specialized personnel required for the construction, equipment andSET-UP OF OPERATIONS, in accordance with the information provided in theBASES OF THE PUBLIC BIDDING and subject to the provisions of thePROPOSAL and theAPPand its Exhibits.
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For the performance of thePROJECT, theDEVELOPER shall be subject to theAPPLICABLE LAWSrelated to construction, environmental impact, safety and hygiene, as well as all other applicable matters.
Except as otherwise expressly provided in thisAPP,theDEVELOPER is obliged to acquire all the necessary authorizations and rights for the exploitation of the material and deposit banks, as well as any other necessary asset, different to those provided inCLAUSE EIGHTwhich, if applicable, are required for thePROJECT, including the performance of the corresponding studies. In any event, should additional assets, right and/or studies to those considered in thePROPOSAL be required, theCONSIDERATIONshall be adjusted in the corresponding proportion.
TheDEVELOPER shall register on a daily basis, systematically and permanently in theLOGBOOK, all the activities carried out for the execution of thePROJECT, as well as those incidents that occur and affect or may affect theWORKS.
TheDEVELOPER is obliged to appoint theSUPERINTENDENT in writing, at the commencement of theWORKS, who shall be the link with theWORKS RESIDENT and theSUPERVISION; who shall have sufficient power and authority to make decisions in everything related with the compliance and execution of thisAPP. TheDEVELOPER may replace the person acting as theSUPERINTENDENT from time to time throughout the term of thisAPP,by written notice toCEA, at least, 5 (five)BUSSINESS DAYS in advance.
TheDEVELOPER shall provide to theWORKS RESIDENT, all the information requested in writing by the latter through theSUPERINTENDENT, and shall allow the individuals authorized in writing by theWORKS RESIDENT, to carry out the visits and inspections that they deem necessary. In both events, theWORKS RESIDENT shall notify to theSUPERINTENDENT at least 3 (three)BUSINESS DAYS in advance to the delivery date of the corresponding information, or for carrying out the visits and inspections deemed necessary.
During the execution of thePROJECT, in all those events in which certain level of specialization or professionalization is not required, theDEVELOPER shall, preferably, use local labor, transport and material resources.
Likewise, theDEVELOPER shall be solely liable to obtain and maintain in full force and effect, based exclusively on its own resources and without any kind of additional resource to theCONSIDERATIONat the expense ofCEA, all the debt and capital financing necessary to carry out thePROJECT, as well as to comply with the other obligations of theDEVELOPER pursuant to thisAPP, in the understanding that the obligations of theDEVELOPER pursuant to thisAPP shall be subject to its capacity of obtaining such financing and to the condition of achieving or not the financial closing, pursuant to Clause Forty Fourth of thisAPP. TheDEVELOPER shall make its best efforts to execute theFINANCIAL AGREEMENTS and to achieve the financial closing as soon as possible after the execution of thisAPP. It shall be understood that theDEVELOPER has complied with its obligation of executing theFINANCIAL AGREEMENTS and achieving the financial closing once it evidences having access to the necessary resources.
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CEAshall support theDEVELOPER in its efforts to achieve the execution of theFINANCIAL AGREEMENTS. To that effect,CEA shall, among others, in a timely manner, make its best efforts to carry out all of the necessary and convenient acts to the satisfaction of theCREDITORS or potentialCREDITORS, to implement the recommendations that are reasonably requested by theCREDITORS or potentialCREDITORS to ensure the bankability of thePROJECT and provide all the documents and information related with itself that theDEVELOPER requires, or that is reasonably appropriate for this kind of operation in accordance with market practices, to speed up the securing of the required financing for thePROJECT by theDEVELOPER.CEA shall deliver such documents and information as soon as reasonably possible, but in no event in a term exceeding 10 (ten)BUSINESS DAYS, following receipt of the written request of theDEVELOPER requiring such information, and theDEVELOPER shall execute such confidentiality agreements thatCEA reasonably deems appropriate with respect to the requested information, in the understanding that such agreements shall allow it to reveal the information and documents provided for the mentioned purposes.
ThePARTIES agree that, in the event that, prior to the execution of theFINANCIAL AGREEMENTS, a relevant fluctuation in the reference values used for the delivery of theECONOMIC PROPOSAL occurs, which could significantly impact thePROPOSAL awarded by theAWARD, or, in the event that theCREDITORS request the implementation of the reasonable recommendations to ensure the bankability of thePROJECT,CEA and theDEVELOPER shall negotiate in good faith, and mutually and jointly agree, in writing, a fair and reasonable adjustment mechanism that acknowledges such impact.
Irrespective of the foregoing, upon the lapsing of 9 (nine) months following the date of submittal of thePROPOSAL, that is, January 21, 2017, thePARTIES shall jointly analyze the existence of such fluctuations and, if such is the case, they shall negotiate in good faith, and mutually and jointly agree, in writing, the aforementioned adjustment mechanism.
SIXTH. OPERATION OF THE SYSTEM.
TheDEVELOPER shall be obliged to operate and maintain theSYSTEM as from the execution of theMINUTES OF COMMENCEMENT OF OPERATION, subject to the terms and conditions mentioned inEXHIBIT 5 of thisAPP.
TheDEVELOPER shall be responsible for the operation, conservation, maintenance and replacement of equipment, structures, buildings, roads, green areas, exterior works, furniture, vehicles, facilities and principal and complementary systems in the Site, in the terms and conditions established in theAPP,its Exhibits and in theAPPLICABLE LAWS and the operation regulations that shall be prepared by theDEVELOPER and submitted to the approval ofCEA,which, once they have been prepared and, if applicable, approved by thePARTIES.
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During theOPERATION PERIOD,CEA and theDEVELOPER shall maintain permanently informed of the technological improvements, adjustments and innovations released into the market in connection with the parts, components, equipment, processes, subsystems, patents and technologies used within theSYSTEM, with the purpose of studying, analyzing and, if applicable, proposing their replacement or adaptation if such produce an increase in efficiency and a reduction of costs that benefit bothPARTIES. In the event that theDEVELOPER acquires knowledge of efficiency increases or reduction of costs, within the30 BUSINESS DAYS from the date on which it has knowledge of the efficiencies increase and/or of the reduction in costs resulting from such technological improvements, adjustments or innovations it shall submit to the approval ofCEA, a cost-benefit study, also attaching the detailed analysis of the related costs and expenses and their repercussion on the agreedCONSIDERATION, whether in its form or term, for the analysis ofCEAand, if applicable, the corresponding authorization. The modifications shall adjust to the following:
If the technological innovations do not require any additional compensation nor imply a reduction of the obligations of theDEVELOPER, they may be agreed upon at any moment.
If the modifications require additional compensation, or imply a reduction of the obligations of theDEVELOPER, each and all of the following conditions shall have to be met:
a) | Compliance of the conditions mentioned in sections I, II or IV of article 106 of theLAPPEBC, the necessity and benefits of the modifications, as well as the amount of additional compensation or reduction of obligations, shall be evidenced with the opinion of independent experts; |
b) | During the first 2 (two) years immediately following the award of thePROJECT, the amount of the modifications, in its whole, shall not exceed the equivalent of twenty percent of the agreed cost of the infrastructure, as well as the consideration for the services during the first 12 (twelve) months of their rendering; and |
c) | When, after the first 2 (two) years of the award of thePROJECT¸ the modifications previously authorized and pending authorization, exceed as a whole the equivalent of twenty percent of the cost of the infrastructure, as well as the consideration for the services during the first 12 (twelve) months of their rendering, they shall be expressly approved by the director ofCEA. |
TheDEVELOPER is obliged to develop a program to train the necessary personnel indicated byCEAto attend emergencies, related with circumstances preventing or that may prevent the operation of theSYSTEM by theDEVELOPER. Such program shall be submitted to the consideration ofCEA,within the60 (sixty) BUSINESS DAYSprior to theDATE OF COMMENCEMENT OF OPERATIONS.CEA shall formulate its comments within the following5 (five) BUSINESS DAYS and shall establish a date for theDATE OF COMMENCEMENT OF OPERATIONS to take place. This training shall be limited to 1 (one) sole training program for no more than 12 (twelve) people.
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SEVENTH. REPLACEMENT OF EQUIPMENT, CONSERVATION AND MAINTENANCE.
TheDEVELOPER shall preserve and maintain theSYSTEM, during all theOPERATION PERIOD,in normal conditions of operation and functioning, subject to the terms and conditions mentioned inEXHIBIT 5 of thisAPP. Likewise, it shall be strictly subject to theOPERATION AND MAINTENANCE HANDBOOK, that shall be prepared by theDEVELOPER, pursuant to thePROPOSAL, which shall be delivered toCEA for approval, at least 1 (one) month in advance to the date foreseen as theDATE OF COMMENCEMENT OF OPERATIONS. Such handbook shall establish and describe the policies, objectives and guidelines with respect to quality, personnel and technical, human and material resources that shall be applied during these stages of thePROJECT, with the purpose of avoiding situations that affect it. Any update or modification to these handbooks shall be submitted toCEA for its consideration.
The conservation and maintenance to which theDEVELOPER is obliged implies the replacement or repair of all ordinary flaws and damages caused in the facilities of theSYSTEM within the terms mutually agreed withCEA. Therefore, theDEVELOPER shall not be liable for such replacements or repairs when the damages or flaws have been caused by actions or omissions ofCEA or of third parties, or when they arise from extraordinary or unforeseeable circumstances, including without limitation,ACTS OF GOD,FORCE MAJEURE EVENTS orCHANGES IN LAW, as such expenses shall be covered by insurances at the expense of theDEVELOPER, pursuant to the provisions of thisAPP, and up until the amount corresponding to them.
TheDEVELOPER shall informCEA with at least 10 (ten)BUSINESS DAYSof anticipation, the ordinary periods of conservation and maintenance which theDEVELOPER shall try to carry out in an escalated manner to avoid the complete stop of theSEAWATER DESALINATION PLANT. However, in those cases in which theSEAWATER DESALINATION PLANT is completely stopped due to the ordinary conservation and maintenance or those in which, as a result of the conservation and maintenance actions, theDEVELOPER shall not able to deliver toCEA the corresponding volume ofPOTABLE WATER, theDEVELOPER shall be excused of complying with the delivery of the corresponding volumeof POTABLE WATER. For purposes of the extraordinary or unforeseen conservation and maintenance periods, thePARTIES shall agree the periods in which theSEAWATER DESALINATION PLANT shall be fully stopped (in which event, theDEVELOPER shall be excused of complying with the delivery of the correspondingPOTABLE WATER volume).
Deficiencies in the conservation and maintenance of theSYSTEM that are detected byCEAduring theOPERATION PERIOD shall be notified in writing byCEA to theDEVELOPER, in order for them to be corrected by theDEVELOPER in the term mutually agreed withCEA.Notwithstanding the foregoing, in the event that theDEVELOPER does not agree with the deficiencies notified byCEA, theDEVELOPER may submit such disagreement to the procedure established inCLAUSE THIRTY FOURTH of thisAPP. The foregoing notwithstanding the obligation of theDEVELOPER to pay the applicable conventional penalties established inCLAUSE THIRTY FIFTH of thisAPP, when such deficiencies in the conservation and maintenance of theSYSTEM are exclusively attributable to theDEVELOPER. The foregoing irrespective of enforcing, if applicable, theOPERATION GUARANTEE, pursuant to the provisions of theAPP.
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For purposes of the conservation and maintenance of theSYSTEM, theDEVELOPER shall acquire and, if applicable, keep in the workplaces, the materials, supplies, devices, equipment and spare parts, instruments, controls, pipelines, tools and other assets necessary for the ordinary functioning and preventive and corrective attention that the maintenance of theSYSTEM requires, during the term of thisAPP.
TheDEVELOPER shall register on a daily basis, systematically and permanently in theLOGBOOK, all the activities carried out for the execution, conservation, repair or replacement of equipment and the maintenance to theSYSTEM.
The operation, conservation, repair or replacement of equipment and maintenance in terms of thisAPP, shall be in charge of theDEVELOPERduring 444 (four hundred and forty four) months following the date of issuance and execution of theMINUTES OF COMMENCEMENT OF OPERATIONS.
EIGHTH. REAL ESTATE.
TheDEVELOPER shall be responsible of obtaining theEASEMENTS and rights of passage, as well as to obtain the authorizations for crossing ofRIGHTS OF WAYthat allow access to theSITE, as such become necessary for each of the two stages of thePROJECT, in the understanding thatCEAshall aid theDEVELOPERin connection with any effort to obtain suchEASEMENTS andRIGHTS OF WAY.
TheDEVELOPER shall make its best efforts in order to for the correspondingGOVERNMENTAL AUTHORITIES, CENTRALIZED AGENCIES, DESCENTRALIZED ENTITIESand/orMUNICIPALITIES to carry out the procedures for the release of theRIGHTS OF WAY,for the construction, operation, inspection and maintenance of the high tension electric energy supply line, in the real estate that are located outside of theSEAWATER DESALINATION PLANT, in the understanding thatCEA shall aid theDEVELOPER in any effort to obtain the release of suchRIGHT OF WAY.
The rights that theDEVELOPER has or shall acquire shall be sufficient to allow the latter their use for the construction and operation of theSEAWATER DESALINATION PLANT.
The agreements, authorizations and other acts necessary for the pacific use and occupation of theSITE where theSEAWATER DESALINATION PLANT shall be built, shall be obtained by theDEVELOPER, the latter being obliged to make a commercially reasonable effort to commence and develop the works in suchSITE and to operate it throughout the term of thisAPP within the terms established to that effect in thisAPP.
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The acquisition and possession of the plot of land in which theSEAWATER DESALINATION PLANT shall be constructed, shall be the exclusive responsibility of theDEVELOPER, in terms of theAPPLICABLE LAWS, for such purposes.
TheDEVELOPER shall acquire the possession and ownership of the real estate in which theSEAWATER DESALINATION PLANT shall be constructed, at the latest, within the [30 (thirty)BUSINESSDAYS] following the execution of theFINANCIAL AGREEMENTS, being responsible for their adequate use and assuming the purchase and sale obligations thereof, for whichCEA shall have neither liability nor obligation, before theDEVELOPER or before any third parties, except for the provisions of thisAPPand the payment of contributions that may correspond in the terms of theAPPLICABLE LAWS.
In the event of any contingency related with theSITE, with theEASEMENTS andRIGHTS OF WAY that in its case are required, theDEVELOPER shall assume the corresponding responsibility, having to exercise the corresponding actions and to notifyCEA in a term no longer than 5 (five)BUSINESS DAYS following the date of knowledge of such contingency.
On its part,CEA shall support the efforts of theDEVELOPER, carrying out the necessary actions, in accordance with theAPPLICABLE LAWS, to comply with this clause.
Notwithstanding the foregoing, theDEVELOPER is obliged to commence or continue with the execution of thePROJECT in the other fronts and segments of theSITE, pursuant to theEXECUTIVE PROJECT. In the event that the corresponding contingency permanently affects thePROJECT, thePARTIES shall mutually agree the pertinent adjustments to theEXECUTIVE PROJECT and to theCALENDARED SCHEDULE and, if applicable, to theCONSIDERATION, without any liability for theDEVELOPER, including the delays in theDATE OF COMMENCEMENT OF OPERATIONS that the foregoing may imply.
NINTH. OWNERSHIP OF THE ASSETS
ThePARTIES agree that all the premises andPROJECT WORKS, as well as all the materials and operative equipment comprising theSEAWATER DESALINATION PLANT shall be destined exclusively to the rendering of the services subject-matter of thisAPP, throughout its term.
Upon expiration of the term of theAPP, theDEVELOPERshall transfer, gratuitously and free of any lien, in favor ofCEA, the ownership of all technical documentation (including without limitation: blueprints, memoirs, operation handbooks, studies and appraisals), and of the facilities, equipment, spare parts, materials, moveable assets and real estate, rights arising from the agreements related to the real estate on which the infrastructure of theSYSTEM shall be installed or constructed, supplies and accessories that comprise thePROJECT, in terms ofCLAUSE TWENTY FIFTH,issuing the necessary documents to evidence the transfer of such ownership and its physical or legal delivery in theMINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY.
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With respect to certain accessory, temporary and compatible rights of use and exploitation over a surface of land within the Presidente Juarez Thermoelectrical Plant, theDEVELOPER shall make its best efforts to cause that, at the renewal of the agreement from which such rights arise,CEA becomes co-tenant and, if applicable, that, in its moment, such agreement is assigned toCEA.
By no means, shall theDEVELOPER be owner of the water before, during or after the potabilization treatment, nor will it have any right over it or over its products or sub-products for purposes different than compliance with thisAPP; therefore it shall not be able to commercialize it in any way.
TENTH. PROCUREMENT OF PERMITS AND AUTHORIZATIONS.
TheDEVELOPER andCEA oblige themselves to procure, obtain and maintain in full force and effect each and every concessions, authorizations, licenses and permits established as their responsibility inEXHIBITS 15 and 16 of thisAPP which are necessary during theINVESTMENT PERIOD and theOPERATION PERIOD, that pursuant to theAPPLICABLE LAWS and thisAPP are required for the complete fulfillment of the subject-matter of thisAPP, in the understanding that thePARTIESshall aid each other, to the extent necessary, in connection with any effort to obtain the necessary authorizations, licenses and permits, including without limitation, the aid to facilitate communications among theDEVELOPER and the correspondingGOVERNMENTAL AUTHORITIES.
In the event that theDEVELOPER cannot timely obtain or is unable to obtain the authorizations, licenses and permits referred to in thisCLAUSE TENTH, in spite complying with all the applicable requirements therefor and having the cooperation ofCEA to obtain them, it shall be considered that aFORCE MAJEURE EVENT has occurred.
ELEVENTH. CONSIDERATION FOR THE SERVICES
1. | All of the services provided by theDEVELOPER under theAPP, including without limitation the desalination, potabilization, conduction and delivery of theINTAKE WATER and the execution of thePROJECT WORKS, in accordance with the provisions of thisAPP, shall be determined with the following formula for purposes of its payment: |
C = T1 + T2 + (T3 X Q) +( T4 X Q)
Where:
C =Total monthly invoicing withoutIVA, for the amortization of the investment for the construction, equipment and set-up of service of theSYSTEM, as well as for the operation, conservation and replacement of the equipment of theSYSTEM inPESOS.
T1=T1C+T1R
Where:
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T1 (FIXED INVESTMENT TARIFF)= The monthly tariff withoutIVA inPESOS to cover the investment costs of theDEVELOPER, in theSYSTEM for the resources from theFINANCIAL AGREEMENTS (T1C) andRISK CAPITAL(T1R) for the construction, equipment andSET-UP OF OPERATIONS of thePROJECT. The T1 shall be paid during a term of 444 (four hundred and forty four) months byCEA to theDEVELOPER, invariably, starting on whichever occurs first of (a) the issuance and execution of theMINUTES OF COMMENCEMENT OF OPERATIONS of theSEAWATER DESALINATION PLANT, or (b) the month 37 (thirty seven) counted as from the date of theMINUTES OF COMMENCEMENT OF THE APP, and shall be calculated pursuant toEXHIBIT 13.
TIC =The monthly tariff withoutIVA inPESOS to pay for the amortization costs of the investment of theTOTAL COST OF THE SYSTEM carried out by theDEVELOPER with resources from theFINANCIAL AGREEMENTS in theSYSTEM, for the preparation of theEXECUTIVE PROJECT, construction, equipment andSET-UP OF OPERATIONS of thePROJECT, which shall be paid during the term of 444 (four hundred and forty four) months byCEA to theDEVELOPER pursuant to Format 6 of Exhibit G Financial Formats for the calculation of theCONSIDERATION of theECONOMIC PROPOSAL, in the understanding that such tariff shall be paid invariably as from whichever occurs first of (a) the issuance and execution of theMINUTES OF COMMENCEMENT OF OPERATION of theSEAWATER DESALINATION PLANT, or (b) the month 37 (thirty seven) counted as from the date of theMINUTES OF COMMENCEMENT OF THE APP.ThisT1C tariff shall be calculated pursuant toEXHIBIT 13.
T1R =The monthly tariff withoutIVA inPESOS to pay for the amortization costs of the investment of theCOST OF THE SYSTEM carried out by theDEVELOPER withRISK CAPITAL in theSYSTEM, for the preparation of theEXECUTIVE PROJECT, construction, equipment andSET-UP OF OPERATIONS of thePROJECT, which shall be paid during the term of 444 (four hundred and forty four) months byCEA to theDEVELOPER pursuant to Format 7 of Exhibit G Financial Formats for the calculation of theCONSIDERATION of theECONOMIC PROPOSAL, in the understanding that such tariff shall be paid invariably as from whichever occurs first of (a) the issuance and execution of theMINUTES OF COMMENCEMENT OF OPERATION of theSEAWATER DESALINATION PLANT, or (b) the month 37 (thirty seven) counted as from the date of theMINUTES OF COMMENCEMENT OF THE APP.ThisT1R tariff shall be calculated pursuant toEXHIBIT 13.
In the understanding, however, that:
Irrespective of the reason thereof, in the event of a temporary suspension of works or a delay in their execution, or the occurrence of the early termination or rescission of thisAPP during theINVESTMENT PERIOD,T1 shall be understood as T1PROPORTIONAL, pursuant to the following:
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T1proportional= T1Cproportional+ T1Rproportional
Where:
T1PROPORTIONAL.-The monthly tariff withoutIVA inPESOS to pay for the fixed costs of amortization of the investment of theTOTAL COST OF THE SYSTEM effectively carried out or, if applicable, incurred by theDEVELOPER with resources from theFINANCIAL AGREEMENTSandRISK CAPITAL in theSYSTEM for the construction, equipment andSET-UP OF OPERATIONS of thePROJECTat any moment in which, regardless of the reason therefor, there is a temporary suspension of thePROJECT WORKS or a delay in their execution, or an early termination or rescission of theAPP occurs during theINVESTMENT PERIOD. This tariff shall be paid byCEA to theDEVELOPER with NO EXCEPTION during the term of 444 (four hundred and forty four) months pursuant to Formats 6 and 7 of “EXHIBIT G. Financial Formats for the calculation of theCONSIDERATION” of theECONOMIC PROPOSAL,invariably, as from the date originally foreseen for the payment of theCONSIDERATION, that is, as from whichever occurs first of (a) the date of early termination of theAPP, or (b) the month 37 (thirty seven) counted as from the date of theMINUTES OF COMMENCEMENT OF THE APP.This tariff shall be calculated pursuant toEXHIBIT 13,and shall be paid monthly according to the advance of theWORKS, as this tariff is destined to the payment of theFINANCIAL AGREEMENTSand theRISK CAPITAL.
T1CPROPORTIONAL.-The monthly tariff withoutIVA inPESOS to pay for the fixed costs of amortization of the investment of theTOTAL COST OF THE SYSTEM effectively carried out or, if applicable, incurred by theDEVELOPER with resources from theFINANCIAL AGREEMENTSin theSYSTEM for the construction, equipment andSET-UP OF OPERATIONS of thePROJECTat any moment that, regardless of the reason therefor, there is a temporary suspension of thePROJECT WORKS or a delay in their execution, or the occurrence of an early termination or rescission of theAPP during theINVESTMENT PERIOD. This tariff shall be paid byCEA to theDEVELOPER with NO EXCEPTION during the term of 444 (four hundred and forty four) months pursuant to Format 6 of “EXHIBIT G. Financial Formats for the calculation of theCONSIDERATION” of theECONOMIC PROPOSAL,invariably, as from whichever occurs first of (a) the early termination of theAPP, or (b) the month 37 (thirty seven) counted as from the date of theMINUTES OF COMMENCEMENT OF THE APP.This tariff shall be calculated pursuant toEXHIBIT 13,and shall be paid monthly, updated and according to the advance of theWORKS, as this tariff is destined to the payment of theFINANCIAL AGREEMENTS.
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T1RPROPORTIONAL.-The monthly tariff withoutIVA inPESOS destined to pay for the fixed costs of amortization of the investment of theCOST OF THE SYSTEM effectively carried out or, if applicable, incurred by theDEVELOPERwithRISK CAPITALin theSYSTEM for the construction, equipment andSET-UP OF OPERATIONS of thePROJECT at any moment that, regardless of the reason therefor, there is a temporary suspension of thePROJECT WORKS or a delay in their execution or the occurrence of an early termination or rescission of theAPP during theINVESTMENT PERIOD. This tariff shall be paid byCEA to theDEVELOPER with NO EXCEPTION during a term of 444 (four hundred and forty four) (XXX) months pursuant to Format 7 of “EXHIBIT G. Financial Formats for the calculation of theCONSIDERATION” of theECONOMIC PROPOSAL,invariably, as from whichever occurs first of (a) the date of the early termination of theAPP, or (b) the month 37 (thirty seven) counted as from the date of theMINUTES OF COMMENCEMENT OF THE APP.This tariff shall be calculated pursuant toEXHIBIT 13,and shall be paid monthly, updated and according to the advance of theWORKS, as this tariff is destined to the payment of theRISK CAPITAL.
T2 (FIXED OPERATION AND MAINTENANCE TARIFF)= The monthly global tariff withoutIVA inPESOS to pay for the fixed costs of operation, equipment replacement, conservation and maintenance of theSEAWATER DESALINATION PLANT pursuant to theECONOMIC PROPOSAL, theAPP and itsEXHIBIT 13, including without limitation, the costs of the insurance agreements, the costs for the salaries of the employees of theDEVELOPER, the payments to sub-contractors, cost of operation, conservation and preventive and corrective maintenance of theSYSTEM, the costs of the bonds, plus the profit of theDEVELOPER for the rendering of the services, labor and administration expenses. The costs included in this tariff are not related to the volume of water to be desalinated; therefore, it shall be paid byCEA as from the moment of issuance of theMINUTES OF COMMENCEMENT OF OPERATION and throughout theOPERATION PERIOD.
T3 (VARIABLE OPERATION AND MAINTENANCE TARIFF).- It is the tariff per cubic meter withoutIVA inPESOS to pay for the variable costs of operation of theSEAWATER DESALINATION PLANT pursuant to theECONOMIC PROPOSAL of theDEVELOPER, thisAPP and theEXHIBIT 13, including without limitation, chemical products and consumable materials and the supplies for the replacement of the membranes.
T4.-It is the cost of electric energy per cubic meter used to carry out the desalinization process ofINTAKE WATER and the conduction used by theSYSTEM until theDELIVERY POINT. The T4 is comprised by the guaranteed consumption of electric energy in kWh/m3, for the process of desalination of theINTAKE WATER and pumping until theDELIVERY POINT, multiplied by the cost of energy in pesos/kWh. The cost of energy that shall be considered is the official tariff for HT (high voltage transmission level) established byCFE in its official website. The initial T4 is mentioned in theEXHIBIT 13of thisAPP, which will be updated pursuant to the terms of such Exhibit.
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Where:
T4 = Ce x Tcfe
Ce = The electric energy consumption per cubic meter (kWh/m3) pursuant to Format 9 of theECONOMIC PROPOSAL. In the event that the requested water volume differs from the volume included in the mentioned Format 9, the consumption of electric energy may vary.
Tcfe = Official tariff published in the official website ofCFE for the high voltage transmission level (HT) per kw-hr for the corresponding month.
Q.-It is the volume ofPOTABLE WATERin cubic meters measured at the exit of theSEAWATER DESALINATION PLANT which, in average shall be of 5’492,520 m3 monthly, considering an efficiency factor of 95%. For purposes of payment, Q represents the real volume in cubic meters registered at the exit of theSEAWATER DESALINATION PLANT.
2. | During theOPERATION PERIOD and, in the event that theSEAWATER DESALINATION PLANT cannot operate for reasons exclusively attributable to theDEVELOPER, the T1 and T2 tariffs shall be paid, the latter provided that theDEVELOPER continues delivering the correspondingPOTABLE WATER volume. The foregoing irrespective of the application of conventional penalties in which theDEVELOPER incurs for the breach of its obligations herein acquired. |
3. | In the event that the water production is less than the stipulated for reasons exclusively attributable to theDEVELOPER, theDEVELOPER shall be entitled to the payment of the produced volumes irrespective of the applicable conventional penalties. |
4. | In the event ofCHANGES IN LAW, ACTS OF GODorFORCE MAJEURE EVENTSand, as consequence thereof, theSYSTEM cannot be partially or fully operated during theOPERATION PERIOD, thenCEA shall pay to theDEVELOPER, during the period of partial or complete suspension of the operation of theSYSTEM, all the T1, T2 and the corresponding amounts of the T3 and T4, if any, plus the additional, reasonable and documented costs, arising as consequence of theACT OF GOD, FORCE MAJEURE EVENTorCHANGE IN LAW, and which theDEVELOPER could not have avoided, discounting any resource from the insurance policies received by theDEVELOPER in respect to suchCHANGE IN LAW, ACT OF GOD orFORCE MAJEURE EVENT, being theDEVELOPER obliged to obtain the insurance policies for business interruption, for the insurable risks in the Mexican market. |
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5. | It is expressly agreed by thePARTIES that the payment of the T1 is an irrevocable obligation destined to the amortization of the investment. |
6. | The payment for the rendered services shall be made monthly byCEA,through theADMINISTRATION TRUST with the resources referred to byCLAUSE TWENTY NINTHof thisAPP and which it shall contribute to theADMINISTRATION TRUST pursuant to such Clause and other applicable provisions of thisAPP, adjusting the amounts established in the summary charts of thePROPOSALFormats 1 through 10 of Document No. 14 of theBASES OF THE PUBLIC BIDDING, pursuant to the procedures, specifications and adjustment and updating formulas set forth inEXHIBIT 13 of thisAPP. In the event that such resources are not sufficient to pay for the rendered services,CEA shall contribute to theADMINISTRATION TRUST the necessary additional resources for the payment of theCONSIDERATION. The monthly amounts of the tariffs calculated, pursuant to the average expense of the design of theSEAWATER DESALINATION PLANT in relation with the service rendered by theDEVELOPER, at prices as of the month of February 2016 are as follows: |
COMPONENT | MONTHLY PAYMENT STAGE 1 | MONTHLY PAYMENT STAGE 2 | ||||||
T1C= Fixed cost for investment carried out with resources from theFINANCIAL AGREEMENTS | $ | 32,293,174.00 | $ | 20,753,609.00 | ||||
T1R= Fixed cost for investment carried out withRISK CAPITAL | $ | 16,740,295.00 | $ | 10,785,231.00 | ||||
T1 = Fixed cost for investment | $ | 49,033,469.00 | $ | 31,538,840.00 | ||||
T2 = Fixed cost for operation | $ | 11,301,170.00 | $ | 7,920,245.00 | ||||
Fixed Subtotal: | $ | 60,334,639.00 | $ | 39,459,085.00 | ||||
T3 = Variable cost of operation for each m3 ofPOTABLE WATER | $ | 1.00 | $ | 1.00 | ||||
T4 = Variable cost of electric energy | $ | 3.49 | $ | 3.53 | ||||
Monthly volume ofPOTABLE WATER in cubic meters measured at the exit of thePLANT | 5,492,520.00 | 5,492,520.00 | ||||||
Variable Subtotal: | $ | 24,662,209.00 | $ | 24,856,086.00 | ||||
Total Monthly Cost: | $ | 84,996,848.00 | $ | 64,315,171.00 |
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The amounts above do not includeIVA, as it shall be covered at the time of payment.
7. | The monthly payment corresponding to the fixed costs of amortization and operation T1 and T2 shall be made byCEA regardless of the volume of deliveredPOTABLE WATER. |
8. | The monthly payment to theDEVELOPERcorresponding to the variable costs of operation shall be calculated by multiplying the real monthly volume in cubic meters (Q),REGISTERED AT THE EXIT OF THE SEAWATER DESALINATION PLANT times the tariff inPESOS per cubic meter T3. In the event that theDEVELOPER concludes the construction of thePROJECT WORKS corresponding to the first stage before the term of 34 (thirty four) months following theAPP EFFECTIVENESS COMMENCEMENT,and theDEVELOPER commences the operation of theSEAWATER DESALINATION PLANT, previously complying with theTESTS before the term of 36 (thirty-six) months established for theINVESTMENT PERIOD and as long as theMINUTES OF CAPACITY have been issued and are viable,CEA shall pay, during this period, the T1, T2 + (T3 X Q) + (T4 X Q) tariffs. |
9. | The payment of the T1 tariff, shall in no event be interrupted during the 444 (four hundred and forty four) months as from whichever occurs first between: (a) the issuance and execution of theMINUTES OF COMMENCEMENT OF OPERATIONS of theSEAWATER DESALINATION PLANT, or (b) the 37th (thirty seventh) month as from the date of theMINUTES OF COMMENCEMENT OF THE APP. If, during theOPERATION PERIOD,CEA fails to comply with its obligations pursuant to thisAPP, it shall pay to theDEVELOPER the complete T1 and T2 tariff and (T3 X Q) + (T4 X Q) in the applicable amount, pursuant to the level of operation that thePROJECTshould have, hadCEA not failed to comply, as well as the additional costs and the damages and losses caused to theDEVELOPER. |
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TWELVETH. ADJUSTMENTS TO THE AMOUNT OF THE CONSIDERATION.
The update and adjustment of the amount of theCONSIDERATION, shall be in accordance with the provisions ofEXHIBIT 13 of thisAPP.
THIRTEENTH. METHOD OF PAYMENT OF THE COMPENSATION.
TheDEVELOPER shall be entitled to the payment of the monthlyCOMPENSATION fromCEA, which shall be carried out by the Trustee of theADMINISTRATION TRUST, as from the month following the execution of theMINUTES OF COMMENCEMENT OF OPERATIONS, inPESOS and in the manner described below, in the understanding that the T1 tariff shall commence to be paid, invariably as from whichever occurs first between: (a) the issuance and execution of theMINUTES OF COMMENCEMENT OF OPERATIONS of theSEAWATER DESALINATION PLANT, or (b) the 37th (thirty seventh) month as from the date of theMINUTES OF COMMENCEMENT OF THE APP:
1. | The payment of the T1 and T2 shall be made pursuant to the procedure below: |
Within the 5 (five)BUSINESS DAYS following the 15th day of each month, theDEVELOPER shall submit toCEAthe invoice corresponding to the services rendered since the 16th day of the previous month, which shall contain the following specifications: (i) the calculation of the amount of theFIXED INVESTMENT TARIFF (T1), detailing the tariffs T1C and T1R; and (ii) theFIXED OPERATION AND MAINTENANCE TARIFF (T2).
2. | The payment of the fixed tariffs shall be made as follows: |
The payment shall be made at the latest, within the 5 (five)BUSINESS DAYS following the submittal by theDEVELOPER of the corresponding invoices toCEA, without thereby requiring a counter receipt. The amounts of the components of the Fixed Tariffs shall be paid byCEA through theADMINISTRATION TRUST in the terms of the agreement formalizing the creation of theADMINISTRATION TRUST.
Under no circumstances shallCEA be entitled to suspend the payment of the fixed tariffs T1 and T2, except for the provisions of clause Eleventh of thisAPPwith respect to the T2 tariff.
3. | The payment of the T3 and T4 tariffs shall be made in accordance with the following procedure: |
Within the 5 (five)BUSINESS DAYS following the 15th day of each month, theDEVELOPER shall submit toCEA the calculation of the (T3 X Q) + (T4 X Q) tariffs for the services rendered as from the 16th day of the previous month.
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CEAshall review the calculations corresponding to the components (T3 X Q) + (T4 x Q), within a term of 5 (five)BUSINESS DAYS counted as from the date of its receipt. If upon the lapsing of such term,CEAhas not made any observations; the submittal by theDEVELOPER of the corresponding invoice shall proceed. In this caseCEA shall issue the corresponding counter receipt against delivery of the invoice by theDEVELOPER; in absence of the counter receipt the evidence of receipt of the invoice shall be considered as a counter receipt.
CEA,through theADMINISTRATION TRUST, shall pay each of the invoices referred to in this section within a term that shall not exceed 5 (five)BUSINESS DAYS following the date of issuance of the corresponding counter receipts or the evidence of receipt of the invoices.
In the event thatCEA disagrees with the corresponding calculation thePARTIES shall submit themselves to the provisions ofCLAUSE THIRTY FOURTH of thisAPP for the resolution of controversies.
The foregoing in the understanding that whenever there is a disagreement between thePARTIES with respect to the payment estimate, the objected and the non-objected portions of the payment shall be covered to theDEVELOPER at all times. Once the controversy is resolved, the corresponding adjustments shall be carried out, in the understanding that if theDEVELOPER is not favored by the resolution of the controversy, the amount covered in excess byCEAshall be reimbursed by theDEVELOPER plus a financial cost resulting from applying to the amount paid in excess, interest at a TIIE rate + 200 annual BASE POINTS, counted as from the date of undue payment and until three days following the date on which the resolution of the controversy is notified, with the understanding that as from the fourth day, the amount paid in excess to be reimbursed shall cause late interest at a rate equivalent to TIIE +550 monthly BASE POINTS. The foregoing with the understanding that the lack of reimbursement for more than 30CALENDAR DAYS shall allowCEA to retain the amount corresponding to the unpaid reimbursement in addition to its accessories in the next payment for the rendering of the services subject-matter of thisAPP, subject to the previous notification in writing to theDEVELOPER with an anticipation of 10BUSINESS DAYS prior to the corresponding retention.
4. | Subject to the provisions of theADMINISTRATION TRUST, the Trustee of theADMINISTRATION TRUST shall pay to theDEVELOPER every invoice referred to in this Clause. |
5. | In the event that any of the tariffs to which theDEVELOPER is entitled is not paid in a timely manner, pursuant to this clause, for causes exclusively attributable toCEA, the following shall be generated: |
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5.1 A late interest equivalent to a rate of TIIE + 550 monthly BASE POINTS, which shall be calculated daily until the complete payment of the debt.
5.2. The application, by theDEVELOPER, of the resources from theCURRENT ACCOUNT LOAN, for which it shall request the disposition thereof through theADMINISTRATION TRUST, which shall request the disposition within a term not to exceed 2 (two)BUSINESS DAYS following the date of receipt of the request by theDEVELOPER.
5.3 The right of theDEVELOPER to suspend thePOTABLE WATERsupply in a unilateral and discretional manner, upon lapsing of 60 (sixty)CALENDAR DAYSas from the date on which theDEVELOPER provides formal notice toCEA on the delay of the corresponding payment and until the amounts owed are fully paid to its complete satisfaction.
5.4 The right of theDEVELOPER to oppose to any form or means that, directly or indirectly, imply the substitution of the service subject-matter of this agreement; therefore theDEVELOPER shall be entitled to oppose to any juridical act of the Government of the State of Baja California or of any of itsDESCENTRALIZED ENTITIES orCENTRALIZED AGENCIES, which have as a goal or purpose to substitute the services subject matter of thisAPP. The foregoing as the nature of thisAPP represents the means by which the Government of the State of Baja California decides, to this date, the integral solution of the water supply to the benefited region.
CEA may not suspend, retain or exercise the right to compensate in front of theDEVELOPER with respect to any payment that theDEVELOPER shall carry out under thisAPP.
FOURTEENTH. [INTENTIONALLY LEFT BLANK]
FIFTEENTH.- INTAKE WATER AVAILABILITY.
CEA is obliged to obtain before the competent authority and to maintain during the term of thisAPP, at the expense and benefit ofCEA, the rights required for the use and exploitation of theINTAKE WATER.DEVELOPER, thusCEA shall be the sole and exclusive liable for the payment of the taxes, rights and/or contributions corresponding to the procurement and maintenance of such rights of use and exploitations of theINTAKE WATER. TheDEVELOPERagrees to assistCEA at all times, to obtain such rights and to deliver the necessary documents and information to achieve such purpose.
TheDEVELOPER shall not have any right over theINTAKE WATER, thePOTABLE WATER and theWASTE WATER,before, during or after the potabilization treatment for purposes different than the compliance of theAPP.
Certified copies of the authorizations for the use of the volumes ofINTAKE WATER.
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CEA acknowledges and agrees that it shall be responsible of obtaining and maintaining in full force and effect the concessions, licenses, permits and authorizations that are exclusively required for the use of theINTAKE WATER volumes. Therefore, it releases theDEVELOPER from any liability arising from any breach by theDEVELOPER to obligations established in thisAPP, arising from the breach byCEA to maintain in full force and effect such concessions, licenses, permits and authorizations, as applicable, including the payment of the corresponding taxes, rights and/or contributions. In the event that the ownership and force and effect of the concessions, permits, licenses and authorizations that are exclusively required for the use of theINTAKE WATER are not maintained byCEA, for causes attributable to it, and as result thereofINTAKE WATER cannot be extracted,CEA shall pay the T1 and T2, as well as all the costs, damages and losses incurred by theDEVELOPER as a result of such breach byCEA.
On the other hand, in the event that the ownership and force and effect of the concessions, licenses, permits and authorizations that are exclusively required for the use of theINTAKE WATER volumes are not maintained byCEA fur to causes not attributable to it, and arising from such it is impossible to collect theINTAKE WATER, without being thePARTIES able to mutually agree in writing a solution to such event, it shall be considered that there was an occurrence of aFORCE MAJEURE EVENT and they shall proceed pursuant to Clause Thirty Second of thisAPP.
SIXTEENTH. QUALITY AND QUANTITY OF THE POTABLE WATER.
TheDEVELOPER is obliged to carry out the design andEXECUTIVE PROJECT of theSEAWATER DESALINATION PLANT in order for thePOTABLE WATER to comply with the limits determined in the modified normNOM-127-SSA1-1994and in everything related to the total dissolved solids, as provided in theBASES OF THE PUBLIC BIDDING. Likewise, it obliges itself to build theSEAWATER DESALINATION PLANT and to use the technology offered in itsPROPOSAL.
As mentioned inCLAUSE FIRST,CEA requires a volume of 65,910,240 (sixty five million, nine hundred and ten thousand, two hundred and forty) cubic meters ofPOTABLE WATER per year equivalent to 2,200 (two thousand, two hundred)LPS with a 95% availability of theSEAWATER DESALINATION PLANTcapacity, during the first stage of thePROJECT.
ThePOTABLE WATER that shall be delivered by theDEVELOPERtoCEA shall conform to the technical guidelines established inEXHIBIT 14 of thisAPP. The functioning of theSEAWATER DESALINATION PLANT shall be evaluated through real time monitoring in the established frequencies, based in the quantity, quality of the water to be treated and quality of thePOTABLE WATER, in accordance with the methods, procedures and periodicity established inEXHIBIT 5of thisAPP, and pursuant to the maximum permitted values as provided in such exhibit. All documentation arising from the monitoring of the quality of the water shall be kept by theDEVELOPER for a term of at least 5 (five) years, which shall be available at all times forCEA and shall be provided to the latter within the 2 (two)BUSINESS DAYS following its request.
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CEAshall provide to theDEVELOPER, by the latest within the last 15 (fifteen)BUSINESS DAYS of each quarter (or at the latest during the last 15(fifteen)BUSINESS DAYS prior to the commencement of theTESTING PERIOD) the required production volumes ofPOTABLE WATER, which shall be established in terms of theAPP, in the understanding that once thatCEA has communicated to theDEVELOPERthe production volumes ofPOTABLE WATER that it shall require for the following quarter,CEAshall be obliged to pay the T1 and T2 tariffs, as well as the T3 and T4 tariffs for such volumes irrespective of whether such are consumed or not.
In the event thatCEA requires greater production volumes ofPOTABLE WATER than those previously notified to theDEVELOPER pursuant to the paragraph above, it shall notify theDEVELOPER with at least 10 (ten)BUSINESS DAYS of anticipation to allow the latter to satisfy the additional demand, which by no means shall exceed the corresponding volume, established in the First Clause of thisAPP.
TheSEAWATER DESALINATION PLANT shall be designed and equipped in such a manner that the water therein processed shall not reach theDELIVERY POINT in the event that it does not meet the applicable quality parameters, pursuant to thePROPOSAL, unlessCEA requests so in writing, in which event, theDEVELOPER shall be released from any liability for the breach of such quality parameters.
EXHIBIT 18 shall establish the applicable procedures to determine if water processed at theSEAWATER DESALINATION PLANT does not comply with the applicable quality parameters and, in such event, the volume thereof.
SEVENTEENTH. WATER MONITORING.
The functioning of theSEAWATER DESALINATION PLANT shall be controlled by the monitoring of the quality of thePOTABLE WATER, subject to the form and periodicity of the respective control and registry established inEXHIBIT 18 to measure the water quality and quantity, including of theINTAKE WATER, thePOTABLE WATER and theWASTE WATER.These regulations shall establish that, in the event of a dispute over the water quality measurements made byCEA and theDEVELOPER, the mediation of an independent and certified laboratory, selected by mutual agreement of thePARTIES, shall be requested and the result thereof shall prevail to resolve such disagreement and shall be final and binding for thePARTIES.
With the purpose of having a measurement of the volume and quality of thePOTABLE WATER and theWASTE WATER, but not for invoicing or availability purposes, theDEVELOPER shall install measurement mechanisms in the sites of reception ofINTAKE WATER, in theDELIVERY POINT ofPOTABLE WATERand in the delivery point of theWASTE WATER. The specification of such mechanisms shall be established in the measurement regulations referred to by the first paragraph of thisCLAUSE SEVENTEENTH.
EIGHTEENTH.- ENVIRONMENTAL LAWS.
TheDEVELOPER obliges itself to comply, at all times, with theAPPLICABLE LAWS in environmental matters.
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Likewise and in the event of being mandatory pursuant to theAPPLICABLE LAWS, theDEVELOPER obliges itself to obtain the environmental impact authorizations, both federal and state, as applicable, for which it shall carry out all the necessary procedures before the competent federal and state authorities in environmental matters, as applicable.
For purposes of the foregoing, theDEVELOPER obliges itself to comply with all theAPPLICABLE LAWS, as well as with all the applicable and valid legal conditions and legal requirements in environmental matters throughout the execution of thePROJECT, as provided in the corresponding environmental impact authorizations, for the term of thisAPP.
TheDEVELOPER may use the documents and other information in possession ofCEA; therefore, the latter shall aid theDEVELOPER in the delivery of the corresponding documents and information, as well as in carrying out the environmental procedures required for the adequate rendering of the services hired under thisAPP.Simple copies of theENVIRONMENTAL IMPACT STATEMENT (MIA) and the environmental impact authorizations shall be attached hereto asEXHIBIT 16.
TheDEVELOPER shall only be responsible for the infrastructure of thePROJECT, including its maintenance and operation for the term of thisAPP. That is, theDEVELOPER shall be solely responsible for (i) the infrastructure forCOLLECTION ofINTAKE WATER, (ii) theSEAWATER DESALINATION PLANT, (iii) the infrastructure for the conduction ofPOTABLE WATER until theDELIVERY POINT, (iv) the quality of theWASTE WATER and (v) the handling of its hazardous and special management wastes.
The Tank 3 and the hydraulic infrastructure of thePROJECT or the related infrastructure that has not been mentioned in the previous sections, shall be of the exclusive responsibility ofCEA,CESPT or whomever results its owner. Any environmental liability arising from thePROJECT, once theSYSTEM has been delivered toCEA pursuant to thisAPP, shall correspond exclusively toCEA.
NINETEENTH. WASTE WATER.
Prior procurement of the corresponding discharge permit, theDEVELOPERshall be responsible of establishing the treatment, disposal and location of the places in which the volumes considered asWASTE WATER, resulting from the treatment of theINTAKE WATER, shall be deposited, complying with the conditions established for such purpose bySEMARNAT as a result of the review of the content of theENVIRONMENTAL IMPACT STATEMENT that, in its moment, shall be prepared by theDEVELOPER to obtain the corresponding environmental impact authorizations.
TheDEVELOPER shall be responsible of complying with the Mexican Official Standards, and in absence thereof, with the International Standards or, if applicable, the reference norms which result applicable to any of its obligations pursuant to articles 55 and 67 of the Federal Law of Metrology and Normalization under thisAPP.
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TWENTIETH.- CONTRIBUTIONS AND PENALTIES
TheDEVELOPER obliges itself to payment of the applicable federal, state and municipality contributions in effect levied at its charge and which encumber the rendering of the services referred in thisAPP.
In the event of modifications to theAPPLICABLE LAWS in tax matters that affect the rendering of these services, such shall be considered asCHANGES IN LAW, and the impact of the variations in such contributions shall be reflected in the monthly tariffs thatCEA is obliged to pay to theDEVELOPER for the operation, equipment replacement, conservation and maintenance of theSYSTEM.
The determination, calculation and payment of the tax contributions, including without limitation, any tax, duty, benefit, product or any other tax lien, including fines, surcharges, actualizations or execution expenses of thePROJECT, shall be in charge of the subject of the corresponding tax or contribution, pursuant to the legal provisions.
When due to causes attributable to theDEVELOPER thePOTABLE WATER does not comply with the applicable standards provided herein, theDEVELOPER shall pay the amount of the penalties that, if applicable, are imposed by the competentGOVERNMENTAL AUTHORITY pursuant to theAPPLICABLE LAWS for such causes throughout the term of theAPP, regardless of the applicable conventional penalties in charge of theDEVELOPER in terms of thisAPPand in favor ofCEA.
TWENTY FIRST. INDUSTRIAL AND INTELLECTUAL PROPERTY.
CEA obliges itself not to use, for any purposes other than those related to thisAPP, all the generated documentation and to preserve and cause to be preserved the rights of theDEVELOPERover its technology for the potabilization of water and its techniques employed in the operation process.
Upon expiration of the term of thisAPP, theDEVELOPER obliges itself to transfer in favor ofCEA the rights of use over the industrial and intellectual property, and the patents implying the technology, units and permanently installed equipment used in the potabilization treatment of the water with respect to which theDEVELOPER is entitled to do so with everything that by fact of by law corresponds to it or is required forCEA to adequately operate theSYSTEM.
The mentioned units, technologies and equipment shall be maintained in a perfect state and functionality, verifying that they have been given the use for which they were acquired, or supplied, being theDEVELOPER obliged to evidence the status of conservation, the repairs, replacements and technological updates carried out under the corresponding and timely authorizations, as well as their application, by means of the corresponding documentation. The delivered units, technologies and equipment shall be evaluated by mutual agreement of thePARTIES and shall function correctly, considering their useful life and ordinary wear and tear.
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TWENTY SECOND.- LOGBOOK.
TheDEVELOPER andCEA, the latter through theSUPERVISION, are obliged to maintain in order and up-to-date aLOGBOOK of theWORKS corresponding to the construction of theSYSTEM, during theINVESTMENT PERIOD, which shall comply with the provisions of article 107 section V of theRLAPPEBC and, afterwards, for the activities of operation and maintenance during theOPERATION PERIOD, having to be executed by thePARTIES at the commencement of theWORKS and every time that it is necessary; every order or observation made byCEA through theWORKS RESIDENT shall be registered in theLOGBOOK and executed by whomever formulated it, by whomever received it and by whomever executed it on behalf of theDEVELOPER, for purposes of delimitating liabilities at all times.
TWENTY THIRD.- SUPERVISION AND INSPECTION OF THE WORKS.
CEAshall at all times have, by itself and through theSUPERVISION, the authority to verify the strict compliance by theDEVELOPER of the planning, design preparation,EXECUTIVE PROJECT, construction and equipment of theSYSTEM works, the preparation and delivery of the protocol ofTESTS andSET-UP OF OPERATIONS and of theQUALITY ASSURANCE HANDBOOK, as well as all the terms contained in theCALENDARED SCHEDULE. In addition,CEA shall verify during the term of thisAPP, that the operation of theSYSTEM is carried out pursuant to the technical criteria and standards set forth for the compliance of the subject-matter of thisAPP. Likewise,CEA shall verify that the maintenance, conservation and replacement of the equipment and other assets integrating theSYSTEM are made in an efficient and timely manner that allows the proper functioning thereof, pursuant to the operation handbooks prepared by theDEVELOPER and authorized byCEAfor the operation and maintenance.
Due to the foregoing, theDEVELOPER is obliged to grant all the facilities to the personnel designed for such purposes byCEA, as well as to deliver the reports, documents and data required to it, within the periods previously agreed in writing by theDEVELOPER andCEA.
The supervision of the execution of the works and services subject matter of thisAPP shall be in charge of theSUPERVISIONthroughout the construction works of theSYSTEM, and the costs related to such task shall be of 2% (two per cent), which is included in theTOTAL COST OF THE SYSTEM; therefore, the supervision works throughout the construction of theSYSTEM shall be invoiced by theSUPERVISION to theDEVELOPER.
TWENTY FOURTH.- MINUTES.
1. | MINUTES OF COMMENCEMENT OF THE APP. |
Once the conditions for theAPP EFFECTIVENESS COMMENCEMENTestablished in clauseFORTY FOURTH of thisAPP have been complied, theMINUTES OF COMMENCEMENT OF THE APP shall be executed, which date shall mark the commencement of theINVESTMENT PERIOD of the first stage of thePROJECT. Except for the provisions of Clause Fourth, section 1 item (a) of thisAPP, on the date of execution of these Minutes, the preparation of theEXECUTIVE PROJECTS shall commence.
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2. | MINUTES OF ACCEPTANCE OF THE EXECUTIVE PROJECT. |
During the preparation of theEXECUTIVE PROJECT, either a single minutes for the entirety of theEXECUTIVE PROJECT or, if applicable, several partial minutes may be prepared, in which the termination of theEXECUTIVE PROJECT or its corresponding partialities is evidenced. These minutes shall be prepared by theSUPERVISION, and executed by theDEVELOPER andCEA and shall have as single purpose evidencing theNON-OBJECTIONbyCEA of theEXECUTIVE PROJECT or, if applicable, of each of its partialities.
In the event that the minutes of acceptance of theEXECUTIVE PROJECT or of its partial deliveries are not prepared, theNON-OBJECTION seals or, if applicable, the lapsing of the corresponding term for the implied affirmative, shall be sufficient pursuant to the provisions ofCLAUSE FOURTH of thisAPP.
3. | MINUTES OF COMMENCEMENT OF CONSTRUCTION. |
These minutes shall be prepared by theDEVELOPER,shall be duly executed by its legal representative, shall establish theDATE OF COMMENCEMENT OF CONSTRUCTION of the first stage of thePROJECT and shall be delivered toCEA, provided that theDEVELOPER has obtained the corresponding environmental impact authorization, and onceCEA with the participation of theSUPERVISION, has granted theNON-OBJECTION,whether expressly or implied of theEXECUTIVE PROJECTin its entirety or in its corresponding partialities. The date of execution of these minutes shall determine theDATE OF COMMENCEMENT OF CONSTRUCTION of the first stage of thePROJECT.
In the event that theDEVELOPER, for causes exclusively attributable to it, does not comply with the paragraph above, it shall inform such circumstance in writing toCEA, indicating the term and conditions requested for such purposes. This extension may not be enforced to change the programmed date of issuance and execution of theMINUTES OF TERMINATION OF CONSTRUCTION, except for justified causes.
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If theDEVELOPER states and provides evidence toCEA that the causes for which this document is not issued are not exclusively attributable to it or are the result of anACT OF GOD, FORCE MAJEURE EVENT orCHANGE IN LAW, it shall do so in writing, indicating the term and conditions requested to comply with theCALENDARED SCHEDULE.CEA may agree to the extension of the term requested by theDEVELOPER and shall make the corresponding adjustments to theCALENDARED SCHEDULE, with no liability for theDEVELOPER. In such events, or in the event that theDEVELOPER is impeded from issuing theMINUTES OF COMMENCEMENT OF CONSTRUCTION for causes attributable toCEA, the latter shall pay to theDEVELOPER the duly documented costs and expenses, including without limitation, the costs related to the risk capital and loan, in which theDEVELOPERincurs due to the delay in the execution of these Minutes and, therefore, due to the delay in the construction stage of thePROJECT.
4. | MINUTES OF TERMINATION OF CONSTRUCTION. |
When the premises of the first stage of thePROJECT are concluded from the construction stand point, evidence thereof shall be made through the issuance and execution of theMINUTES OF TERMINATION OF CONSTRUCTION, which shall be prepared by theDEVELOPER and shall be executed with the knowledge and verification of theSUPERVISION(considering the monthly estimates in the advance of thePROJECT WORKS), that thePROJECT WORKS corresponding to the first stage of thePROJECT comply with the requirements established in theEXECUTIVE PROJECT.CEA shall have 3 (three)BUSINESS DAYS to verify the termination of 100% (one hundred percent) of the construction of theSYSTEM, counted as from the moment in which theDEVELOPER notifies in writing toCEA the termination of the construction works. In the event that upon lapsing of this term,CEA does not make any observations in writing, theDEVELOPER shall be in charge of preparing theMINUTES OF TERMINATION OF CONSTRUCTION, considering such as accepted byCEA without further requirements.
ThePARTIES agree that theDEVELOPER may issueMINUTES OF PARTIAL TERMINATION OF CONSTRUCTION for certain parts, components or subsystems of theSYSTEM. In such event, irrespective of the issuance of thePARTIAL MINUTES OF TERMINATION OF THE CONSTRUCTION, theDEVELOPER, shall prepare theMINUTES OF TERMINATION OF THE CONSTRUCTION for the entirety of thePROJECT WORKS, pursuant to this Clause.
CEA, theDEVELOPERor theSUPERVISION may evidence in the minutes, observations relating to items pending construction whose termination does not affect the commencement of theTESTS or thePRODUCTION CAPACITY, as well as the term for their correction, evidencing upon its expiration, the conclusion of such pending items through minutes of release of pending items.
CEA shall not execute theMINUTES OF TERMINATION OF CONSTRUCTION when it reasonably and justifiably evidences that any of thePROJECT WORKS or equipment corresponding to the first stage of thePROJECThave not been made in accordance with the terms of thisAPP and its Exhibits, or when due to their conditions it is impossible to carry out the correspondingTESTS.
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ThePARTIES acknowledge and agree that theINVESTMENT PERIOD shall be automatically extended without liability to theDEVELOPER, during the time (i) corresponding to the necessary term to obtain the authorization ofCEA and theSUPERVISION, in the event that there are no observations ofCEA and/or theSUPERVISION to theMINUTES OF TERMINATION OF THE CONSTRUCTION or if applicable, to its partialities; (ii) takes toCEA and/or theSUPERVISION to issue observations to theMINUTES OF TERMINATION OF THE CONSTRUCTION, or if applicable, to its partialities; (iii) required by theDEVELOPER to carry out the adjustments to theMINUTES OF TERMINATION OF THE CONSTRUCTION, or if applicable, to its partialities, that it deems applicable based on the observations ofCEA and/or theSUPERVISION; and (iv) needed to verify the conditions in which theMINUTES OF COMMENCEMENT OF OPERATIONS shall be issued.
5. | MINUTES OF CAPACITY. |
TheDEVELOPER shall carry out theTESTS during theTESTING PERIOD, in accordance with the norms and specifications of theTESTS andSET-UP OF OPERATIONS of theSYSTEM prepared by theDEVELOPER, which shall be attached hereto asExhibit 7.Upon conclusion of theTESTSwith satisfactory results, theDEVELOPER shall proceed to prepare theMINUTES OF CAPACITY, which shall be reviewed by theSUPERVISION in a term of 5 (five)BUSINESS DAYS. Upon the satisfactory conclusion of the review, theMINUTES OF CAPACITY shall be submitted toCEA for its execution. TheMINUTES OF CAPACITY shall evidence that theSYSTEM complies with thePRODUCTION CAPACITYestablished for the release of theCONSTRUCTION GUARANTEEreferred to inCLAUSE TWENTY EIGHTHof thisAPP.CEA shall have 5 (five)BUSINESS DAYS to verify the satisfactory conclusion of theTESTS, counted as from the date on which theDEVELOPER delivers theMINUTES OF CAPACITY to theSUPERVISION. In the event that, upon conclusion of such term,CEA does not make any observation in writing, theMINUTES OF CAPACITY shall be considered as accepted by theSUPERVISION andCEAand, therefore, theCONSTRUCTION GUARANTEE shall be released, without the need of any further requirement.
In the event that theSYSTEM does not comply with thePRODUCTION CAPACITY within theINVESTMENT PERIOD and that implies a delay in the issuance of theMINUTES OF COMMENCEMENT OF OPERATION or an actual delay in theOPERATION PERIOD, the conventional penalty provided in section 3 ofCLAUSE THIRTY FIFTH of thisAPPshall be applicable. Notwithstanding, theDEVELOPER may request an additional term to carry out the necessary modifications and obtain thePRODUCTION CAPACITY, being obliged to maintain the effectiveness of theCONSTRUCTION GUARANTEE during the term granted byCEA until a term of no more than 10 (ten)CALENDAR DAYS. The maximum term during which theDEVELOPER may carry out the corresponding corrections shall be of 10 (ten)BUSINESS DAYS, following the 2 (two) months of construction andTESTS originally established for the commencement of operation of theSYSTEM.
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Irrespective of the compliance or non-compliance with thePRODUCTION CAPACITY by theDEVELOPER and whether or not theMINUTES OF CAPACITY and/orMINUTES OF COMMENCEMENT OF OPERATIONare issued,CEA shall pay for the receivedPOTABLE WATER until compliance with thePRODUCTION OF CAPACITY is achieved and theMINUTES OF CAPACITY and theMINUTES OF COMMENCEMENT OF OPERATION are issued. Likewise, notwithstanding that theDEVELOPER is granted an additional term for compliance of thePRODUCTION CAPACITY,CEA obliges itself to commence payments corresponding to the T1 tariff.
If, on the date on which theDEVELOPER notifies toCEA of the commencement of theTESTING PERIOD,CEAhas not maintained, for causes outside of its will, the rights for the use and exploitation of theINTAKE WATER, in its favor and for the use by theDEVELOPER pursuant to thisAPP the conventional penalties shall not be applicable to theDEVELOPER.
6. | MINUTES OF COMMENCEMENT OF OPERATION. |
Document that shall be prepared by theDEVELOPER, reviewed by theSUPERVISION and submitted to the consideration ofCEA one day after the execution of theMINUTES OF CAPACITY, by virtue of which theDEVELOPER may commence theOPERATION PERIOD of theSYSTEM.
Once theDEVELOPER has delivered theOPERATION GUARANTEE toCEA,CEA shall be obliged to, immediately, return theCONSTRUCTION GUARANTEE and to issue theMINUTES OF COMMENCEMENT OF OPERATION. Upon execution of these minutes, theOPERATION PERIOD and the payments corresponding to theCONSIDERATION shall commence, pursuant the specifications of thisAPP.
If for causes exclusively attributable to theDEVELOPER, theMINUTES OF COMMENCEMENT OF OPERATION are not issued, and no additional term pursuant to the following paragraph is granted, the payment of the conventional penalties referred in section 3 ofCLAUSE THIRTY FIFTH shall be applicable.
In the event that theDEVELOPER had requested and obtained an additional term for the execution of theMINUTES OF CAPACITY, theOPERATION PERIOD shall be extended for the same additional term granted. Likewise, notwithstanding that theDEVELOPERhas been granted an additional term for compliance of thePRODUCTION CAPACITY,CEA obliges itself to begin the payments corresponding to theT1 tariff.
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In the event that theDATE OF COMMENCEMENT OF OPERATIONS occurs after the 37th (thirty seventh) month counted as from theAPP EFFECTIVENESS COMMENCEMENT,due to causes attributable toCEA, the execution of additional works, aCHANGE IN LAW, anACT OF GODorFORCE MAJEURE EVENT, or due to any other circumstance that pursuant to the terms of thisAPP, entitles theDEVELOPER to the extension of theINVESTMENT PERIOD, theDATE OF COMMENCEMENT OF OPERATIONS shall be extended for a term equivalent to the delay due to the foregoing causes.
7. | MINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY. |
Upon conclusion of theOPERATION PERIOD, within the 5 (five)BUSINESS DAYS following the date on which the termination of theAPP proceeds, and once theDEVELOPER has delivered toCEAtheAPP TERMINATION GUARANTEE, in accordance with the terms hereof,CEAshall return theOPERATION GUARANTEE and theMINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY shall be jointly prepared by theDEVELOPERandCEA, evidencing theDELIVERY of theSYSTEM and its operation, with all the assets that comprise it, gratuitously and with no lien whatsoever, as well as of the real estate in which theSEAWATER DESALINATION PLANT and other facilities of theSYSTEMare located,mentioning the ordinary functioning conditions in which theSYSTEM is received, pursuant to the provisions ofCLAUSE TWENTY FIFTH of thisAPP.
With the issuance and execution of these minutes, the effects of theAPP terminate and the release of theOPERATION GUARANTEE referred to inCLAUSE TWENTY EIGHTH of thisAPPis viable, provided that theDEVELOPER has delivered toCEA theAPP TERMINATION GUARANTEE.
During the time that it takes to carry out theDELIVERY of theSYSTEM, theDEVELOPER shall not be obliged to operate and/or maintain theSEAWATER DESALINATION PLANT.
TWENTY FIFTH.- CONDITIONS FOR THE DELIVERY OF THE SYSTEM.
Within a term of 6 (six) months prior to the termination of theOPERATION PERIOD, theDEVELOPERshall verify the abilities of the personnel ofCEA, to take over the operation of theSEAWATER DESALINATION PLANT or for the events of contingencies, obliging itself to update or, if applicable, train the personnel designated and placed at its disposal byCEA, as mutually agreed with theDEVELOPER and paying, the latter, the costs of such training, in the understanding that theDEVELOPER shall be responsible for the operation of theSYSTEM until the expiration of the term of thisAPP and the execution of theMINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY.
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Upon conclusion of theOPERATION PERIOD, in terms ofCLAUSE SECOND of thisAPP, theDEVELOPER is obliged to perform theDELIVERY of theSYSTEM toCEA, in optimal conditions of operation and functionality considering the normal wear that it should have from the time of use and with a residual useful life of at least 5 (five) years, pursuant to the provisions of thisCLAUSE TWENTY FIFTH andEXHIBIT 17. Regardless of thisAPP or theBASES OF THE PUBLIC BIDDING, the obligation of theDEVELOPER provided in this paragraph shall be subject to (i) theOPERATION AND MAINTENANCEof theSYSTEM being carried out in accordance with the handbooks provided by theDEVELOPER; (ii) the necessary supplies and works for the repair and maintenance of theSYSTEMshall be provided by theDEVELOPER and paid timely byCEA; and, if applicable, (iii) the damages and flaws inflicted to theSYSTEM, the works or any other component of thePLANT are not attributable to third parties, including personnel ofCEA, or the result of anACT OF GOD or aFORCE MAJEURE EVENT.
TheDELIVERY of theSYSTEM shall be at no cost, free of any liens and prior inventory technically valued by bothPARTIES, with respect to the useful life of its components, works, equipment and facilities, machinery, tools and other assets and rights comprising it, as well as the corresponding operation, conservation and maintenance handbooks, preparing to that effect, theMINUTES OF TERMINATION OF APP AND DEFINITIVE DELIVERY.
Upon termination of theOPERATION PERIOD, theDEVELOPER shall provide all the necessary consumption materials for 90 (ninety)CALENDAR DAYS, including lubricants, chemical substances and laboratory, offices and processes articles to allow the continuous and uninterrupted operation of theSYSTEM byCEA. Likewise, it shall provide the necessary fuel to cover at least one contingency of theCONTINGENCIES OR SAFEKEEPING ACTIONS PLAN according to the components of the works, quantities and qualities stated in its list of materials and supplies established in thePROPOSAL.
Likewise, theDEVELOPER obliges itself to provide the necessary equipment and spare parts to guarantee the operation of theSYSTEM during the 6 (six) months following the date of issuance of theMINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY, pursuant to a maintenance program agreed between theDEVELOPERandCEA.
Upon termination of thisAPP and during the 6 (six) months following the execution of theMINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY,CEA reserves its right to claim to theDEVELOPER any liability in which the latter had incurred in the terms of thisAPP, for hidden defects, flaws or deficiencies in the operation, conservation, maintenance and replacement of the equipment of theSYSTEM. Upon conclusion of such term, theDEVELOPER shall no longer have any liability for hidden defects, flaws or deficiencies in the operation, conservation, maintenance and replacement of the equipment of theSYSTEM.
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Upon conclusion of theOPERATION PERIOD, theDEVELOPER shall only have rights over the assets that it had acquired at its own expense, and which are not directly destined to the operation and maintenance of theSYSTEM.
Upon conclusion of theOPERATION PERIOD, theDEVELOPER shall carry out theDELIVERY of theSYSTEM and its operation toCEA, pursuant to the procedure and conditions provided inEXHIBIT 17: Procedure of delivery of the SYSTEM.
As from the moment of execution of thisAPP, theDEVELOPER grants its express and irrevocable consent for purposes of havingCEA taking possession of theSYSTEM at the termination of theAPP, pursuant to the procedure established inEXHIBIT 17.
TWENTY SIXTH.- [INTENTIONALLY LEFT BLANK].
TWENTY SEVENTH.- INSURANCES
TheDEVELOPER shall be liable for the damages and losses that may be caused in the person and assets of third parties orCEA, as a result of the construction, equipment andSET-UP OF OPERATIONS of thePROJECT, as well as during the operation, conservation, replacement of equipment and maintenance of theSYSTEM.
To cover this liability, theDEVELOPER shall hire and maintain in full force and effect the following insurances:
1. | TheDEVELOPER shall, at its own expense, insure theWORKS and assets subject matter of thisAPP with a damages insurance for structures, works, materials or equipment, caused by its activities or those of its contractors and shall repair or replace any damaged structure, work, material or equipment, to the satisfaction ofCEA, solely with respect to the sufficiency of the coverage of the insurance or insurances, as provided in thePROPOSAL, as well as of civil liability damages to third parties, during theINVESTMENT PERIOD which includes, but is not limited to, the concepts of losses caused due to damages to structures, partial or complete destruction by fire, lightning, earthquakes, vandalism or any other similar risk, whether or not caused byFORCE MAJEURE EVENT. This insurance shall cover damages for risks as from the date of execution of theMINUTES OF COMMENCEMENT OF CONSTRUCTION until the execution of theMINUTES OF COMMENCEMENT OF OPERATION, date on which the broad coverage insurance mentioned in section 2 below shall commence its validity. |
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The amount of coverage of this insurance may not be less than 20% of the amount of the works executed and shall be applied solely to compensate the damage covered by such insurance and for which it was hired.
The trustee of theADMINISTRATION TRUST shall be the beneficiary of this insurance, to whom thePARTIES shall oblige to contribute the amount of the indemnifications received for the execution of this insurance, the repairmen of the caused damages and the replacement of the affected equipment, when necessary.
TheDEVELOPER shall deliver toCEA a copy of the evidence of hiring this insurance, within the 30 (thirty)BUSINESS DAYS following the date of execution of theMINUTES OF COMMENCEMENT OF CONSTRUCTION.
2. | TheDEVELOPER is obliged to hire, at its own expense, an insurance of broad coverage, to insure all the components of theSYSTEM during theOPERATION PERIOD. |
TheDEVELOPER shall deliver toCEA the evidence of hiring this insurance, within the 30 (thirty)BUSINESS DAYS following the date of execution of theMINUTES OF COMMENCEMENT OF OPERATION.
The amount of this insurance shall be applied solely to repair the covered damage and for which it was hired. The beneficiary of this insurance shall be the trustee of theADMINISTRATION TRUST; being the trustee obliged to deliver the amount of the indemnifications received for the execution of this insurance, the repairmen of the caused damages and the replacement of the affected equipment, when necessary.
All the insurances shall be granted by insurance companies duly registered before theSHCP, and without the existence of a relationship between them and theDEVELOPER,being obliged theDEVELOPER to cover the amount of the corresponding deductibles, except when the accident is attributable toCEA. The non-compliance or omission in the hiring the mentioned insurances, by theDEVELOPER shall be considered a breach of theAPPand, consequently, a cause for rescission, unless such are consequence of any event outside the control of theDEVELOPER.
The cost of the insurance policies shall be paid directly by theDEVELOPER to the insurance company, and theDEVELOPER shall deliver the payment receipts of the policies in full force and effect and the documentation evidencing the coverage and value of the policies toCEA. Likewise, the hiring and renewal of the insurance policies shall be obtained and fully paid by theDEVELOPER within the term established in the insurance policy or policies.
In every insurance, the waiver by the insurance companies to all their rights of subrogation and any claim againstCEA.
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TWENTY EIGHTH.- GUARANTEES PROVIDED BY THE DEVELOPER.
I. | GUARANTEES OF THE DEVELOPER |
To guarantee the compliance of the obligations of theDEVELOPER in terms of thisAPP, theDEVELOPER shall deliver toCEA the following bonds:
1. | CONSTRUCTION GUARANTEE |
To ensure compliance of its obligations arising from theAPP in connection with the preparation of theEXECUTIVE PROJECT, construction andTESTS of theSYSTEM, theDEVELOPER shall deliver toCEA, within the 30 (thirty)BUSINESS DAYS following theAPP EFFECTIVENESS COMMENCEMENT, a guarantee in favor ofCEA through a bond policy, for a value equivalent to the 10% (ten percent) of theCOST OF THE SYSTEM corresponding to the first stage of thePROJECTstated in itsPROPOSAL. This amount shall be updated annually, based on theINPC of the date on which the corresponding policy is issued, effective as from the execution date of theMINUTES OF COMMENCEMENT OF APP until theDATE OF COMMENCEMENT OF OPERATION.
In the event that there is any extension to the dates of theCALENDARED SCHEDULE ofMILESTONES for causes exclusively attributable to theDEVELOPER, the latter shall extend the term of the issued bond for the term of such extension, in such a manner that theCONSTRUCTION GUARANTEE is valid throughout the required terms and amounts. TheDEVELOPER shall evidence the extension of term of the bond toCEA with at least 5 (five)BUSINESS DAYS prior to the initial expiration. The non-compliance by theDEVELOPER to obtain the extension of the term of theCONSTRUCTION GUARANTEE as established in thisAPP, shall be a cause of rescission of thisAPP, provided that theDEVELOPER does not remedy such situation within a term of 30 (thirty)BUSSINESS DAYS following the notification to that effect made byCEA.
This guarantee shall be payable at the payment requirement made byCEA and/orSPFto the issuer.
The hiring of this bond shall be done pursuant to the model used for such purposes by the bond company granting it to theDEVELOPER and approved by theSPF, but the policy shall include the following within its conditions:
a. | The term of the policy shall be annual and of automatic renewal, without the need of an express statement from its contractor or of its beneficiary, commence on the date of its issuance and concluding on theDATE OF COMMENCEMENT OF OPERATION. |
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b. | The bond shall be enforced upon rescission due to causes exclusively attributable to theDEVELOPER, in terms ofCLAUSE THIRTY FIRST or when theDEVELOPER does not comply with the payment of the corresponding conventional penalty referred to inCLAUSE THIRTY FIFTH of thisAPP, within the term therein established for such purpose. |
c. | To enforce the bond in the events referred to in the previous section, the written requirement ofCEA and/or theSPF to the bond company shall be necessary, in which documental evidence states and evidences that the rescission of theAPP has been made effective for causes exclusively attributable to theDEVELOPER and that the corresponding procedure described inCLAUSE THIRTY FIRST of thisAPP has been complied or, if applicable, that the term, and applicable extension, for the payment of the corresponding conventional penalty mentioned inCLAUSE THIRTY FIFTH of thisAPP has lapsed, without theDEVELOPER having paid it or remedied such circumstance. |
d. | The bond company shall cover the amount resulting in charge of theDEVELOPER, in terms of suchCLAUSE THIRTY FIRST of thisAPP. |
2. | OPERATION GUARANTEE. |
To ensure compliance of its obligations arising from theAPP in connection with the operation and maintenance of theSYSTEM during theOPERATION PERIOD, theDEVELOPER shall deliver toCEA, before theDATE OF COMMENCEMENT OF OPERATION, a guarantee in favor ofCEA through a bond policy, for a value equivalent to the 10% (ten percent) of the amount of the yearly payment inPESOS of theCONSIDERATIONin effect at that moment for the portion corresponding to the T2 + (T3 X Q) tariffs, considering as base the last invoice paid to theDEVELOPER, or during the first year of theOPERATION PERIOD, the amount corresponding to the production volume communicated to theDEVELOPER pursuant to Clause Sixteenth of theAPPshall be considered as the base.This equivalence shall be maintained throughout the term of the bond, with yearly term and automatic renewal during all theOPERATION PERIOD, as from theDATE OF COMMENCEMENT OF OPERATION and until theDELIVERY and operation of theSYSTEM toCEA and delivery by theDEVELOPER toCEA of theAPP TERMINATION GUARANTEE, pursuant to the provisions of theAPP.
The delivery of the policy corresponding to this bond shall be necessary for the execution of theMINUTES OF COMMENCEMENT OF OPERATIONS.
This guarantee shall be payable upon request of payment made byCEA and/or theSPF to the guarantor.
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The hiring of this bond shall be attested in the model used for such purposes by the bond company granting it to theDEVELOPER and approved by theSPF, but the policy shall include within its conditions the following:
a. | The term of the policy shall be annual and of automatic renewal, without the need of an express statement from its contractor or of its beneficiary, it shall be effective and in force for all theOPERATION PERIOD, its effects shall commence on the date of its issuance and conclude on the date ofDELIVERY of theSYSTEM, in terms of thisAPP. The early cancellation of this policy, shall require the express request made theDEVELOPER evidencing the written approval ofCEA. |
b. | The bond shall be enforced upon rescission due to causes exclusively attributable to theDEVELOPER, in terms ofCLAUSE THIRTY FIRST of theAPP or when theDEVELOPER does not cover the amount of the corresponding conventional penalty referred to inCLAUSE THIRTY FIFTH of thisAPP, within the term and extensions established in thisAPP for such purpose; as well as when theDEVELOPER has not covered the costs required for theDELIVERY of theSYSTEM, pursuant toEXHIBIT 17 or had not delivered theAPP TERMINATION GUARANTEE, being necessary to repair hidden defects for the maintenance and replacement of equipment of theSYSTEM in which theDEVELOPER had incurred during theOPERATION PERIOD. |
c. | To enforce the bond in the events referred to in the previous section, the written requirement ofCEA and/or theSPF to the bond company shall be necessary, in which they state and provide documental evidence that the rescission of theAPP has been made effective for causes exclusively attributable to theDEVELOPER and that the corresponding procedure provided inCLAUSE THIRTY FIRST of thisAPP has been followed and complied with or, if applicable, thatDEVELOPER has incurred in the hypothesis mentioned in the last part of the immediately preceding section, without theDEVELOPER having remedied the situation. |
d. | The bond company shall cover the amount resulting in charge of theDEVELOPER in terms of suchCLAUSE THIRTY FIRST of thisAPP. |
In the event of extensions or waits granted to theDEVELOPER for compliance of its obligations arising from the formalization of agreements for the extension of the amount or term of theAPP, the corresponding modification to the bond shall be obtained.
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3. | APP TERMINATION GUARANTEE. |
On the date of conclusion of theOPERATION PERIOD, provided thatCEA has not exercised its option to extend the term of theAPP, theDEVELOPER is obliged to obtain a bond or its equivalent, which shall be valid for a period of 6 (six) months after the date of execution of theMINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY in terms of thisAPP, the amount of which shall be equivalent to the annual payment of T2 + (T3 X Q) corresponding to the previous year, to repair hidden defects for maintenance and equipment replacement of theSYSTEM in which theDEVELOPER had incurred during theOPERATION PERIOD.
The agreement by which this bond is granted shall include, at least, the following conditions:
a. | That it is granted with knowledge of all the provisions of thisAPP. |
b. | That it is granted for an updated amount. |
c. | The term of the policy shall be for the 6 (six) months following theMINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY. The early termination of this policy shall require the express and written statement ofCEA or theADMINISTRATION TRUST, which shall not be withheld or denied in an unjustified manner. |
d. | The bond shall be enforced when theDEVELOPER does not cover the full, reasonable and justified costs required for theDELIVERY of theSYSTEM, pursuant toEXHIBIT 17or when it is necessary to repair hidden defects for the maintenance and replacement of equipment of theSYSTEM in which theDEVELOPER had incurred during theOPERATION PERIOD. |
e. | To enforce the bond, the written requirement ofCEA and/or theSPF to the bond company shall be necessary, in which they state and provide documental evidence on the non-compliance by theDEVELOPER referred to in the last part of the preceding section. |
f. | The bond company shall cover the amount resulting in charge of theDEVELOPER in terms of the preceding paragraph, upon written request byCEA and/or theSPFto the guarantor. |
g. | That the bond company expressly accepts to submit itself to the procedure established in article 279 and 282 connecting with article 178, and waives the benefits established in article 179 of the Law of Insurances and Bonds Institutions. |
In the event that the terms of execution established for the different stages of the works of thisAPP are extended, it shall be agreed that the term of the corresponding guarantees shall be automatically extended or immediately replaced to cover the period corresponding to the extension and its amount shall be updated, acknowledging the amount of expenses corresponding to theDEVELOPER in the event that the causes for extension of the terms are not attributable to it.
4. | COMMON PROVISIONS |
TheCONSTRUCTION GUARANTEE, theOPERATION GUARANTEE, and theAPP TERMINATION GUARANTEE, in order to be valid pursuant to theAPP, shall comply with the following conditions:
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a. | Be issued by a bond company authorized by theSHCP to operate in Mexico. |
b. | The exhibition of the corresponding policies toCEA, shall be necessary forCEA to guarantee the provisions of thisAPP. |
c. | The breach by theDEVELOPER in granting the guarantees referred in thisCLAUSE TWENTY EIGHTHor to maintain their effectiveness, shall be a cause for rescission of theAPP. |
d. | They shall be payable at the requirement of payment made byCEA and/or theSPF to the issuer, pursuant to the sections above. |
e. | The hiring of these bonds shall be done pursuant to the model used for such purposes by the bond company granting it to theDEVELOPER and approved by theSPF, but the policy shall include within its conditions the following: |
i. | That the bond is granted attending to all the corresponding provisions contained in thisCLAUSE TWENTY EIGHTH. |
ii. | That the release of the bond indispensably requires the express and written statement ofCEAor the trustee of theADMINISTRATION TRUST,which shall not be denied in an unjustified manner; |
and
iii. | That the bond company expressly accepts to submit itself to the execution procedures provided in the Law of Insurances and Bonds Institutions for the effectiveness of the bonds, even for the event that the collection of interest was applicable, as a result of the extemporaneous payment of the amount of the required bond policy. |
f. | In the event of extensions or waits granted to theDEVELOPER for compliance of its obligations arising from the formalization of agreements for the extension of the amount or term of theAPP, the corresponding modification to the bond shall be obtained by theDEVELOPER. |
g. | CEA is obliged to release the corresponding bonds pursuant to the respective provisions for each event provided in thisAPP |
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TWENTY NINTH.- RESOURCES OF THE CONSIDERATION.
1. | CEA andCESPT, by means of thisAPP jointly oblige themselves, to pay to theDEVELOPER, in terms of articles 1862, 1864 and 1878 of the Civil Code for the State of Baja California, theCONSIDERATION. For such purposes, theADMINISTRATION TRUST shall be created, to which the sufficient resources and rights shall be affected to guarantee the payment of theCONSIDERATION.CEA obliges itself to promote and obtain the registry of thisAPP in terms of article 85 of theLAPPEBC, for purposes of which it shall negotiate before the corresponding entity its filing before the Congress of the State of Baja California for its inclusion in the expenses budget that corresponds to each of the years in which the payment of theCONSIDERATION shall be made under thisAPP. |
2. | CEA andCESPT oblige themselves to affect to theADMINISTRATION TRUST, the economic rights and the necessary resources, including without limitation, the right to dispose of theCURRENT ACCOUNT LOAN, with the purpose of destining them as an alternative source of payment of theCONSIDERATION, and the collection rights pursuant to theWATER PURCHASE AND SALE AGREEMENT, which shall be destined as the main source of payment of theCONSIDERATION, in the terms established in thisAPP. |
3. | With the purpose of guaranteeing the payment of the purchase and sale ofPOTABLE WATER pursuant to theWATER PURCHASE AND SALE AGREEMENT in charge ofCESPT and in favor ofCEA, and therefore, the payment of theCONSIDERATION in favor of theDEVELOPER,CEAobliges itself to negotiate, contract and make effective theCURRENT ACCOUNT LOANas a condition for theAPP EFFECTIVENESS COMMENCEMENT to commence the construction of theSYSTEM, which purpose shall be to cover possible liquidity shortfalls to comply with the payment obligations in charge ofCESPT and in favor ofCEA agreed in theWATER PURCHASE AND SALE AGREEMENT, whenCESPT does not comply with such obligations. |
4. | In the hiring of theCURRENT ACCOUNT LOAN, in addition toCEA , the Government of the State of Baja California throughSPF, shall appear as joint obligor of the payment obligations acquired byCEA,in terms of the mentionedCURRENT ACCOUNT LOAN, and shall grant in guarantee of such obligations, the contributions to theMASTER GUARANTEE TRUST pursuant to transitory article eighteenth of the Income Law of the State of Baja California for the Tax Year of 2016. |
5. | The CURRENT ACCOUNT LOAN, which shall be guaranteed by theSPF, shall be disposable as from the 37th (thirty seventh) month counted as from the date of issuance of theMINUTES OF COMMENCEMENT OF THE APP and shall remain in effect as long as the payment obligations in charge ofCEA in favor of theDEVELOPER remain valid in terms of thisAPP. |
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6. | The amount of theCURRENT ACCOUNT LOAN shall always be equivalent to 3 (three) months of payment of theCONSIDERATION in charge ofCEA, updated in accordance toEXHIBIT 13, plus the correspondingIVAand financial accessories. In the event that theFINANCIAL AGREEMENTS require an extension of the amount of suchCURRENT ACCOUNT LOAN and/or that the conditions considered in theECONOMIC PROPOSAL are affected, it shall be extended to up to 6 (six) months of the payment of theCONSIDERATION. |
7. | The right to dispose of the resources of theCURRENT ACCOUNT LOAN shall be affected to theADMINISTRATION TRUST, for its exercise by the trustee thereof within the 2 (two)BUSINESS DAYS following the creation of theADMINISTRATION TRUST. |
8. | CEA is obliged to contribute to the assets of theADMINISTRATION TRUST, at least the following rights, in the understanding that such contributions shall be perfected within the 2 (two)BUSINESS DAYS following the creation of theADMINISTRATION TRUST, otherwise it shall be considered a breach byCEA: |
a. | 100% of the collection rights arising from the block water purchase and sale agreement or agreements that it has executed with water operating entities of the State of Baja California, which are not affected at the time of execution of thisAPP. |
b. | 100% of the collection rights arising from any block water purchase and sale agreement or agreements that it executes in the future with water operating entities of the State of Baja California. |
c. | 100% of the collection rights arising from any water purchase and sale agreement or any agreement for transfer of water rights with any entity or government. |
THIRTIETH.- EARLY TERMINATION OF THE APP.
For the event of early termination of theAPP, thePARTIES agree to submit themselves to what they agree in its moment; however, to ensure compliance with the Financial Agreements of thePROJECT, they shall consider in their agreement, at the least, the following:
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I. | EARLY TERMINATION BY MUTUAL AGREEMENT BETWEEN THE PARTIES DURING THE INVESTMENT PERIOD: |
CEA is obliged to the payment of the amounts of the T1 tariff with its respective updates and which correspond to the investment withRISK CAPITAL and with resources from theFINANCIAL AGREEMENTS,pursuant to the provisions ofEXHIBIT 13 “Adjustments to the Amount of theCONSIDERATION”, plus the amount of the insurances, the cost of theADMINISTRATION TRUST and any expenses and investments carried out by theDEVELOPER or incurred and pending amortization, calculated based on the corresponding evidence submitted by theDEVELOPER , in the understanding that such payments shall be monthly as from the date agreed by thePARTIES for the early termination and until the conclusion of the 444 (four hundred and forty four) months counted as from theAPP EFFECTIVENESS COMMENCEMENT.
II. | EARLY TERMINATION BY MUTUAL AGREEMENT BETWEEN THE PARTIES DURING THE OPERATION PERIOD: |
CEA is obliged to pay the amounts of the T1 tariff with its corresponding updates and which correspond to the amount of the investment withRISK CAPITAL, and with resources from theFINANCIAL AGREEMENTS, pursuant toEXHIBIT 13 “Adjustments to the Amount of theCONSIDERATION”, plus the amount of the insurances, the cost of theADMINISTRATION TRUSTand any expenses and investments made by theDEVELOPER or incurred and pending amortization, as calculated based in the corresponding evidence submitted by theDEVELOPER,arising from the rendering of the services subject matter of thisAPP, in the understanding that such payments shall be monthly throughout the remaining term until conclusion of the 444 (four hundred and forty four) months considered for theOPERATION PERIOD.
III. | RESCISSION OF THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT APP: |
Regardless of the provisions on the matter included in theLAPPEBC, thePARTIES shall submit themselves to the provisions ofCLAUSE THIRTY FIRST of thisAPP for purposes of the rescission of thisAPP.
IV. | IMPOSSIBILITY TO COMPLY WITH THE SUBJECT MATTER OF THE APP DUE TO ACT OF GOD OR FORCE MAJEURE EVENT: |
ThePARTIES shall submit themselves toCLAUSE THIRTY SECONDof thisAPP in the event of impossibility to comply with the subject matter of theAPP due toACT OF GOD orFORCE MAJEURE EVENT.
V. | EARLY TERMINATION DUE TO CAUSES OF GENERAL INTEREST. |
Upon termination of the effects of thisAPP due to causes of general interest or when, due to justified causes the necessity of requiring the goods or services originally contracted is extinguished, and it is justifiably evidenced that the continuance of the compliance of the agreed obligations would cause damage or detriment to the State pursuant to article 123 of theRLAPPEBC, thePARTIES shall submit themselves to the following:
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1. | During the INVESTMENT PERIOD. |
a. | CEA shall communicate in writing to theDEVELOPER that theAPP shall be terminated in an anticipated manner due to causes of general interest, describing, justifying and evidencing the reasons of general interest, mentioning the term that theDEVELOPER shall have to deliver thePROJECT WORKS, which shall not be less than 90 (ninety)BUSINESS DAYS,counted as from the date of such communication. |
b. | Within the term granted to theDEVELOPER, the latter shall proceed to prepare an inventory of the assets that comprise thePROJECT WORKS at that moment, which it shall deliver toCEA, in coordination with theSUPERVISION and a representative ofCEA. |
c. | CEA shall pay to theDEVELOPER the expenses and investments made by theDEVELOPER or incurred and pending amortization, whether corresponding to the amount of the investment throughRISK CAPITAL or with resources from theFINANCIAL AGREEMENTS, as calculated based in the corresponding evidence submitted by theDEVELOPER arising from the rendering of the services subject matter of thisAPP, which shall include the reimbursement to theDEVELOPER of the debt service incurred by theDEVELOPER (concepts not included in the T1) plus the amount of the insurances and the cost of theADMINISTRATION TRUST, as well as the amount of all the other costs and expenses made by theDEVELOPER, in thePROJECT. Within the term granted to theDEVELOPER, it shall prepare the inventory of the assets that comprise, at that moment, the works that shall be delivered in coordination with theSUPERVISION and a representative ofCEA.CEA shall commence the payment of the updated T1 determined by theSUPERVISION, in the understanding that the corresponding payments shall be monthly from the 37th (thirty seventh) month as from theMINUTES OF COMMENCEMENT OF THE APP and until the month 444 (four hundred and forty four) counted as from such date and pursuant toEXHIBIT 13 of thisAPP. |
d. | In the event of controversy over the expenses and investments to be reimbursed to theDEVELOPER, thePARTIES shall resort to the procedure for resolution of controversies contained inCLAUSE THIRTY FOURTH of thisAPP. |
2. | During the OPERATION PERIOD. |
a. | CEA shall communicate in writing to theDEVELOPER that theAPP shall be terminated in an anticipated manner due to causes of general interest, describing, justifying and evidencing the reasons of general interest, mentioning the term that theDEVELOPER shall have to deliver theSYSTEM, which shall not be less than 90 (ninety)BUSINESS DAYS. |
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b. | Within the term granted to theDEVELOPER, it shall proceed to prepare an inventory of the assets that comprise theSYSTEMat that moment, which it shall deliver toCEA, in coordination with theSUPERVISION and a representative ofCEA. |
c. | CEA shall pay to theDEVELOPER the expenses and investments made by theDEVELOPER or incurred and pending amortization, as calculated based in the corresponding evidence submitted by theDEVELOPER arising from the rendering of the services subject matter of thisAPP, which shall include the reimbursement to theDEVELOPER of the debt service incurred by theDEVELOPER (concepts not included in the T1). |
d. | CEA shall continue paying the amount of the T1 tariff pursuant toEXHIBIT 13 “Adjustments to the Amount of theCONSIDERATION”, plus the amount of the insurances and the cost of theADMINISTRATION TRUST, in the understanding that such payments shall be carried out monthly for the remaining term until the conclusion of the 444 (four hundred and forty four) months counted as from the date of theAPP EFFECTIVENESS COMMENCEMENT. |
e. | In the event of controversy over the expenses and investments to be reimbursed to theDEVELOPER, thePARTIES shall recur to the procedure for resolution of controversies contained inCLAUSE THIRTY FOURTH of thisAPP. |
In any event of early termination of thisAPP pursuant to the provisions of sections I through IV above, and notwithstanding the applicable provisions of theLAPPEBC, thePARTIES agree that the relevant items of the procedure forDELIVERY of theSYSTEM contained inEXHIBIT 17shall be applicable.
In the event of early termination of theAPP, pursuant to the provisions of section V above, thePARTIES agree that the provisions of Clause Thirty Third of thisAPP shall be applicable.
THIRTY FIRST.- RESCISSION.
I. | Causes of Rescission |
The following shall be causes of rescission of thisAPP:
1. | For causes exclusively attributable to theDEVELOPER: |
a. | Not executing theMINUTES OF COMMENCEMENT OF THE APP in the terms and conditions provided in thisAPP. |
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b. | Assign, transfer or encumber in any way thisAPP or any of the rights arising from it, without the prior written approval ofCEA except for the assignment of collection rights of theCONSIDERATION and the pledge over shares representing the corporate capital of theDEVELOPER,set forth in theAPP. |
c. | Not obtaining or maintaining the effectiveness of the guarantees or insurances referred to in thisAPP. |
d. | Not obtaining, due to causes exclusively attributable to theDEVELOPER, the corresponding authorizations for theWASTE WATER; as well as theENVIRONMENTAL IMPACT STATEMENT. |
e. | Breach during theOPERATION PERIOD, due to causes exclusively attributable to theDEVELOPER, of the quantity and quality parameters of thePOTABLE WATER established in thisAPP and its exhibits, during a term exceeding 60 (sixty) consecutiveBUSINESS DAYS counted as from the date on which there is knowledge of the deficiencies in such parameters, or, during a period exceeding 180 (one hundred and eighty) discontinuousBUSINESS DAYS within 1 (one) calendar year. |
f. | The unjustified suspension or delay in the preparation of theEXECUTIVE PROJECT or the construction, equipment,TESTS and set-up of operations of thePROJECT WORKS, for causes exclusively attributable to theDEVELOPER, for a period greater than 180 (one hundred and eighty)BUSINESS DAYS with respect to that provided in theCALENDARED SCHEDULE, provided that, after carrying out the corresponding notice of breach to theDEVELOPER and the lapsing of the cure period established below, it implies an equivalent delay in the date foreseen for the commencement of theOPERATION PERIOD and consequently, theMINUTES OF COMMENCEMENT OF OPERATION are not executed. |
g. | The total suspension of the operation of theSEAWATER DESALINATION PLANT for a term greater than 60 (sixty) consecutiveBUSINESS DAYS,or 180 (one hundred and eighty) discontinuousBUSINESS DAYS within a period of 1 (one) year without a justified cause. |
h. | To modify the legal nature of theDEVELOPER, its nationality, corporate structure or the participation percentages of the shareholders in the corporate capital, without the prior written approval ofCEA. |
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i. | The juridical, legal or judicial inability of theDEVELOPER, which prevents it from complying with the obligations arising from thisAPP for a period greater than 90 (ninety)BUSINESS DAYS. |
j. | If theDEVELOPER enters into bankruptcy pursuant to theAPPLICABLE LAWS. |
Unless thisAPP establishes a different term, in the event of occurrence of any of the rescission causes mentioned above, theDEVELOPER shall have a term of 90 (ninety)BUSINESS DAYS counted as from the moment of the corresponding notification that for such purposes is given byCEA, to remedy such cause of rescission.
1.1. | Upon lapsing of such term,CEA may opt to (i) execute an agreement with theDEVELOPER in which the latter obliges itself to compensateCEA for the expenses in whichCEA had incurred as a result of the breach by theDEVELOPER (within the limitations established in thisAPP and subtracting any applicable conventional penalties) and to establish an additional term to remedy the corresponding breach, or (ii) commence the rescission procedure established in section II of this Clause. For purposes of this paragraph, theDEVELOPER agrees that the lack of exercise of the right to rescind thisAPP byCEA shall not be considered as a waiver to such right for the future or subsequent breaches. |
1.2. | In the event thatCEA elects to commence the rescission procedure of thisAPP, pursuant to the immediately preceding paragraph before commencing such procedure,CEA shall notify theCREDITORSon its decision, in order for theCREDITORS to have the option, within the 90 (ninety)CALENDAR DAYSfollowing the receipt of such notification, to exercise any of the following options: |
(a) | Commence and pursue in a diligent manner, on behalf and in representation of theDEVELOPER,the acts tending to remedy the cause of rescission of theDEVELOPER; or |
(b) | Diligently exercise its guarantee rights against theDEVELOPER with the purpose of assuming, by itself or through third parties, all the rights and obligations of theDEVELOPERwith respect to theSYSTEM, provided that (i) the party substituting theDEVELOPER has legal and operative capacity, and economic solvency equal or greater than those of theDEVELOPER at the date of execution of thisAPP, (ii) the party substituting theDEVELOPERdesignates an operator and executes an operation services agreement with it, and both the substitute of theDEVELOPER and the substitute operator have obtained the corresponding permits and authorizations pursuant to theAPPLICABLE LAWS, and (iii) the party substituting theDEVELOPER creates in favor ofCEA the applicable guarantees pursuant to thisAPP. |
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1.3. | Upon persistence of a cause of rescission attributable exclusively to theDEVELOPER which remediation thePARTIES cannot agree pursuant to this Clause or with respect to which theCREDITORS do not elect to remedy or assume all the rights and obligations of theDEVELOPER with respect to theSYSTEM, CEA shall have the option of assuming all the rights and obligations of theDEVELOPER with respect to theSYSTEM. In the event thatCEA exercises such option: |
(a) | TheDEVELOPER shall transfer toCEA, free of any lien, the ownership of all the technical documentation (including but not limited to: blueprints, memoirs, operation handbooks, studies and appraisals), and of the premises, equipment, spare parts, materials, moveable assets and real estate, rights arising from the agreements related to the real estate on which the infrastructure of theSYSTEM shall be installed or constructed, supplies and accessories that comprise thePROJECT, in terms of the provisions of thisAPP, evidencing the physical or legal delivery in theMINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY; and |
(b) | At all times, including without limitation any of the rescission causes exclusively attributable to theDEVELOPER, considered in this Clause,CEAshall be obliged to pay in favor of theDEVELOPER (i) the monthly tariff withoutIVAinPESOS to pay for the fixed costs of amortization of the investment carried out by theDEVELOPER inRISK CAPITALof theTOTAL COST OF THE SYSTEM for the preparation of theEXECUTIVE PROJECT, construction, equipment andSET-UP OF OPERATIONS of theSYSTEM (T1R), or, if applicable, theTIRPROPORTIONAL tariff and (ii) the monthly tariff withoutIVA inPESOS destined to the payment of the fixed amortization costs of the investment made by theDEVELOPER with resources from theFINANCIAL AGREEMENTS of theTOTAL COST OF THE SYSTEM for the preparation of theEXECUTIVE PROJECT, construction, equipment andSET-UP OF OPERATIONS of theSYSTEM (T1C), or, if applicable, theTICPROPORTIONAL tariff in terms ofClause Eleventh of thisAPP. |
1.4. | Finally, upon the persistence of a cause of rescission exclusively attributable to theDEVELOPER which remediation thePARTIEScannot agree pursuant to this Clause, with respect to which theCREDITORS elect not to remedy and with respect to whichCEA does not exercise the option of assuming all the rights and obligations of theDEVELOPER with respect to theSYSTEM, it shall be understood that aFORCE MAJEURE EVENT has occurred and the provisions of Clause Thirty Second of thisAPP shall be applicable. |
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2. | For causes exclusively attributable to CEA: |
a) ThatCEA does not pay theCONSIDERATION in terms of thisAPP, and such may not be paid to theDEVELOPER using theCURRENT ACCOUNT LOAN.
b) The breach byCEA and/orCESPT, of the provisions of theADMINISTRATION TRUST, provided that the foregoing implies the lack of payment of the contractual obligations ofCEA.
c) The non-compliance byCEA, CESPTor theSPF of their obligations pursuant to the provisions of theCURRENT ACCOUNT LOAN.
d) Not maintaining, for causes attributable toCEA, the concessions, authorizations, licenses and permits exclusively required for theINTAKE WATER.
e) The breach of any obligation provided in thisAPP, having as a direct or indirect effect, the generation of damages and losses to theDEVELOPER or the affectation, obstruction, partial or total impediment of the rights of thisAPP. The affectation, obstruction, total or partial impediment of the rights of thisAPP shall mean, without limitation, the illegal exercise by any entity, agency or dependence of the Government of the State of Baja California against the exercise of the rights of theDEVELOPER.
f) ThatCEA refuses to or does not have the necessary capacity to receive the rendering of services subject matter of thisAPP by theDEVELOPER, including without limitation, thePOTABLE WATER from theSYSTEM in terms of thisAPP.
In the event that any of the rescission causes attributable toCEA persists, theDEVELOPER may terminate theAPP and demand toCEAthe acquisition of theSYSTEM, beingCEA obliged to do so, as well as to acquire the real estate in which theSYSTEM is located, and any other rights related to it, as well as the payment of the damages and losses caused by the breach ofCEA pursuant to the following:
i) | During the INVESTMENT PERIOD |
CEA shall pay to theDEVELOPER the expenses and investments carried out by theDEVELOPER or incurred and pending amortization, calculated based on the corresponding receipts presented by theDEVELOPER, arising from the rendering of the services subject matter of thisAPP, which shall include the reimbursement to theDEVELOPER of the debt incurred by it (concepts not included in the T1) in addition to the amounts of the insurance and the costs of theADMINISTRATION TRUST, as well as the amount of the other expenses and costs carried out by theDEVELOPER in thePROJECT. Likewise,CEA shall be liable for the damages and losses caused to theDEVELOPER by its breach.
Within the term granted to theDEVELOPER, which shall not be less than 90 (ninety)BUSINESS DAYS, it shall proceed to make an inventory of the assets that comprise thePROJECT WORKS at that moment, which it shall deliver, in coordination with theSUPERVISION and a representative ofCEA.CEA shall commence the payment of the T1, updated and determined by theSUPERVISION, in the understanding that the corresponding payments shall be made monthly as from the 37th (thirty seventh) month counted as from theAPP EFFECTIVENESS COMMENCEMENT and until the 444th (four hundred and forty fourth) month counted as from such date and according to the provisions ofEXHIBIT 13 of thisAPP.
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ii) | During the OPERATIONS PERIOD |
Within the term granted to theDEVELOPER, which may not be less than 90 (ninety)BUSINESS DAYS, it shall proceed to make an inventory of the assets that comprise theSYSTEM at that moment, which it shall deliver toCEA, in coordination with theSUPERVISION and a representative ofCEA.
CEA shall pay to theDEVELOPER the expenses and investments carried out by theDEVELOPER or incurred and pending amortization, calculated based on the corresponding evidence submitted by theDEVELOPER, arising from the rendering of the services subject matter of thisAPP, which shall include the reimbursement to theDEVELOPER of the debt incurred by it (concepts not included in the T1). Likewise,CEA shall be liable for the damages and losses caused to theDEVELOPER by its breach.
CEA shall continue paying the T1 tariff, in accordance with the provisions ofEXHIBIT 13 “Adjustments to the amount of theCONSIDERATION” in addition to the amounts of the insurance and the costs of theADMINISTRATION TRUST, in the understanding that such payments shall be made monthly during the remaining term and until the conclusion of the 444 (four hundred and forty four) months counted as from theAPP EFFECTIVENESS COMMENCEMENT.
In any event of rescission of theAPP and regardless the applicable provisions of theLAPPEBC, thePARTIES agree that the procedure for theDELIVERY of theSYSTEM provided inEXHIBIT 17, as appropriate, shall be applicable.
II. | Procedure in the event of rescission. |
1. | Due to causes exclusively attributable to the DEVELOPER: |
In the event that pursuant to section I.1 above of thisCLAUSE THIRTY FIRST,CEA is entitled to and elects to demand the rescission of thisAPP, CEA shall proceed in accordance with the procedures for resolution of controversies established inCLAUSE THIRTY FOURTH of thisAPP.
2. | Due to causes exclusively attributable to CEA: |
In the event that pursuant to section I.2 above of thisCLAUSE THIRTY FIRST, theDEVELOPER elects to demand the rescission of thisAPP, theDEVELOPERshall proceed in accordance with the procedures for resolution of controversies established inCLAUSE THIRTY FOURTH of thisAPP.
THIRTY SECOND.- EARLY TERMINATION DUE TO ACT OF GOD OR FORCE MAJEURE EVENT.
The breach of any of the obligations assumed by thePARTIES in thisAPP shall not be cause for termination or rescission, nor for the application of conventional penalties and sanctions, when such result from anACT OF GOD orFORCE MAJEURE EVENT.
ThePARTIES agree that, upon occurrence of any of the events consideredACT OF GOD orFORCE MAJEURE EVENT that prevent compliance of their obligations, the following shall be applicable:
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The party affected by theACT OF GOD orFORCE MAJEURE EVENT:
(i) | Shall take all the reasonable actions to mitigate the consequences of such event in the compliance of its obligations pursuant to thisAPP, without thereby implying any obligation of making expenses; |
(ii) | Shall resume the compliance of its obligations affected by theACT OF GOD orFORCE MAJEURE EVENT as soon as possible; and |
(iii) | Shall not be released from liability pursuant to thisAPP if the breach is caused by its breach to the obligations of thisAPP. |
The party requesting the acknowledgement of the existence of anACT OF GOD orFORCE MAJEURE EVENT shall notify so in writing to the other party within the 5 (five)BUSINESS DAYS following the date of awareness of theACT OF GOD orFORCE MAJEURE EVENT. Such initial notification shall contain sufficient details to identify the event considered asACT OF GOD orFORCE MAJEURE EVENT, including a description of the event, place, date, time in which it occurred and causes that motivated it.
Within the 5 (five)BUSINESS DAYS following the date on which a party receives the notification referred above, the party affected by anACT OF GOD or aFORCE MAJEURE EVENT shall submit all the relevant information in connection with its noncompliance (or delay in compliance) due to theACT OF GOD orFORCE MAJEURE EVENT, which shall include, without limitation:
h. | The effect that theACT OF GOD orFORCE MAJEURE EVENT shall have on the capacity of the party to comply with its contractual obligations; |
ii. The actions that it has performed in accordance with section (i) of the third paragraph of this Clause;
iii. The date on which theACT OF GOD orFORCE MAJEURE EVENT occurred;
iv. An estimate of the duration of theACT OF GOD orFORCE MAJEURE EVENT and its effects;
v. Alternative solutions, both temporary and/or permanent for theACT OF GOD orFORCE MAJEURE EVENT, if any.
The party requesting the acknowledgement of the existence of anACT OF GOD orFORCE MAJEURE EVENT shall notify the other within the 3 (three)BUSINESS DAYS following the date on which theACT OF GOD orFORCE MAJEURE EVENT or their effects have disappeared, with the purpose of resuming the compliance of its obligations arising from thisAPP.
In the event that the party giving the notice provided in terms of the previous paragraphs, receives or obtains any additional information in connection with theACT OF GOD orFORCE MAJEURE EVENT, it shall deliver such additional information to the other party within the 3 (three)BUSINESS DAYS following its awareness of such information.
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In addition to the provisions below, in the event of occurrence of anACT OF GOD orFORCE MAJEURE EVENT, the party affected by anACT OF GOD or aFORCE MAJEURE EVENT shall be entitled to the additional costs caused by theACT OF GOD orFORCE MAJEURE EVENT to be considered in the payment of theCONSIDERATION, which shall be increased in the amounts corresponding to the additional costs incurred or to be incurred by theDEVELOPER.
In anyACT OF GOD orFORCE MAJEURE EVENT,CEA shall continue the payments of the T1 tariff, in addition to any other payment to whichCEA is obliged, according to thisAPP, including the payment of the T2 tariff.
I. | EFFECTS DURING THE CONSTRUCTION. |
In the event of anACT OF GOD orFORCE MAJEURE EVENT that prevents the construction of theSYSTEM the effects of thisAPP may be partially and temporarily suspended until the effects caused by such event disappear, at which moment the legal effects of theAPP shall be resumed in their full extent and validity, until its termination.
If, upon lapsing of 90 (ninety) continuousCALENDAR DAYS or 180 (one hundred and eighty) discontinuousCALENDAR DAYS within a year,the effects caused by theACT OF GOD orFORCE MAJEURE EVENT have not disappeared, thePARTIES may agree the early termination of thisAPP, subject to section I ofCLAUSE THIRTIETH.
II. | EFFECTS DURING THE OPERATION |
If theACT OF GOD orFORCE MAJEURE EVENT arise during theOPERATION PERIOD, and impede the continuation of the operation of theSYSTEM,CEAshall only have to cover,in addition to the payment of the T1 (Fixed Investment Tariff), the T2 (Fixed Operation and Maintenance Tariff) of theCONSIDERATION in favor of theDEVELOPER.
If, upon lapsing of 90 (ninety) continuousCALENDAR DAYSor 180 (one hundred and eighty) discontinuousCALENDAR DAYS within a period of 1 (one) year,the effects caused by theACT OF GOD orFORCE MAJEURE EVENT have not disappeared, thePARTIES shall jointly analyze the contractual situation to determine the measures that should be taken and may agree on a modification to the obligations, an extension of the partial or total interruption of the service, or the early termination of theAPP, in the last case being subject to section II ofCLAUSE THIRTIETH.
THIRTY THIRD.- EARLY TERMINATION DUE TO GENERAL INTEREST OR JUSTIFIED CAUSES.
ThePARTIES expressly agree that, in the event of early termination of theAPP due to general interest or justified causes, theSYSTEM and all the assets and rights necessary for its operation and maintenance, including supply materials, equipment and spare parts shall be transferred toCEA in the condition in which they are at that time; thus,CEA hereby expressly and irrevocably waives any action and/or right that it might have to claim the payment or remedy of hidden defects, or any other liability related to the condition of theSYSTEM and all the rights and assets necessary for the operation and maintenance thereof, including supply materials, equipment and spare parts.
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THIRTY FOURTH.- PROCEDURE TO SOLVE TECHNICAL CONTROVERSIES.
In the event of any disagreement or controversy of technical or economic nature, but not legal, related to thisAPP, thePARTIES shall try to solve it in mutual agreement and pursuant to the principle of good faith, for which either may notify in writing to the other party, on a disagreement or controversy in terms of this Clause.
(a) | TheDEVELOPER orCEA, accordingly, shall have a term of 5 (five)BUSINESS DAYS counted as from the reception of the mentioned notification to discuss and provide the evidence that they deem convenient to the effect of reaching an agreement to solve the controversy. |
(b) | In the event that thePARTIES do not manage to achieve a written agreement, within a term of 10 (ten)BUSINESS DAYS following the expiration of the term mentioned in the paragraph above, then they shall submit themselves to the decision of an expert committee (the “Experts Committee"), pursuant to the following procedure: |
i. | The Experts Committee shall be comprised by three experts in the corresponding matter, with each of thePARTIESappointing one, and the third being appointed by the two experts previously appointed by each of thePARTIES, who shall be included in the list of justice administration experts and auxiliaries of the Judicial Branch of the State of Baja California, unless such list does not have experts specialized in the matter of the controversy, in which event the corresponding knowledge shall have to be evidenced. |
ii. | To commence the procedure before the Experts Committee, the interested party shall provide the counterparty with a notice that shall contain: |
a. | The decision of submitting the controversy to the Experts Committee; |
b. | Its designated expert; |
c. | The controversy to be resolved and a description thereof, as broad as possible, with the facts from which it arose; |
d. | The evidence with which it intends to justify its intention; and |
e. | The proposal to resolve the controversy. |
iii. | Within the 5 (five)BUSINESS DAYS immediately following the mentioned notice, the notified party shall reply, with the same requirements mentioned above. |
iv. | The designated experts shall have 2 (two)BUSINESS DAYS as from the reception of the writs of thePARTIES to designate the third expert and integrate the Experts Committee. If they do not reach an agreement, the third member of the Experts Committee shall be designated through an impartial procedure in a term no longer than 10 (ten)BUSINESS DAYS. |
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v. | Once the Experts Committee is integrated, it may procure the necessary elements to analyze each of the positions of thePARTIES. For such purposes, thePARTIES oblige themselves to cooperate with the Experts Committee, providing it with the documentation and information required by it. |
vi. | If it considers it applicable, the Experts Committee shall receive thePARTIES at a joint hearing. |
vii. | In any event, the Experts Committee shall issue its resolution in a term no longer than 60 (sixty)BUSINESS DAYS as from its creation. |
viii. | If the resolution is unanimously approved, it shall be binding to thePARTIES. |
ix. | The fees and expenses of the experts caused by the mentioned procedure of the Experts Committee, shall be paid with resources of theADMINISTRATION TRUST. For such purpose, the party that commences the corresponding procedure shall deposit in theADMINISTRATION TRUST the amount corresponding to the fees and expenses established by the Experts Committee, in the understanding that, in its resolution, the Experts Committee shall decide the distribution of the costs and expenses (including their fees) caused as a result of the procedure set forth in this Clause, pursuant to the following: |
(a) | If the party that commenced the procedure obtains all the claims requested in the procedure, it shall be compensated with the incurred expenses, including without limitation the deposit made in theADMINISTRATION TRUST. |
(b) | If the party that commenced the procedure does not obtain any of the requested claims, it shall not have the right to any reimbursement. |
(c) | If the party that commenced the procedure obtains the requested claims partially, the Experts Committee shall decide the portion of the incurred costs and expenses that shall be reimbursed to it. |
THIRTY FIFTH.- CONVENTIONAL PENALTIES FOR BREACH.
Each of the following events, except when such result fromACTS OF GOD, FORCE MAJEURE EVENTSorCHANGES IN LAW,or that are consequence of actions or omissions ofCEA or third parties, not exclusively attributable to theDEVELOPER, shall constitute a breach by theDEVELOPER and, therefore, after expiration of the corresponding grace and/or cure periods, as applicable, shall have as consequence the application of conventional penalties at its charge, pursuant to the following terms:
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1. | Breach in thePRODUCTION CAPACITY of thePOTABLE WATER supplied in theSEAWATER DESALINATION PLANT at any moment after the date of issuance and execution of theMINUTES OF COMMENCEMENT OF OPERATIONS. In this case, theVARIABLE OPERATION AND MAINTENANCE TARIFF (T3)corresponding to the non-delivered volume shall not be paid to theDEVELOPER. |
2. | For not delivering thePOTABLE WATER with the quality established inEXHIBIT 14, at any moment after the date of issuance and execution of theMINUTES OF COMMENCEMENT OF OPERATION, in which case, theVARIABLE OPERATION AND MAINTENANCE TARIFF (T3)corresponding to the volume not delivered with the established quality shall not be paid to theDEVELOPER unlessCEA receives suchPOTABLE WATER. |
3. | In the event of a delay exclusively attributable to theDEVELOPER after theAPP EFFECTIVENESS COMMENCEMENTand before the issuance of theMINUTES OF COMMENCEMENT OF OPERATIONS, provided that such implies a delay in the term foreseen for the commencement of thePERIOD OF OPERATIONS and consequently, theMINUTES OF COMMENCEMENT OF OPERATION are not executed, theDEVELOPER shall pay toCEA a conventional penalty equivalent to 100% (one hundred percent) of the monthly T3 provided in the Format 8 of “EXHIBIT G. Financial formats for the calculation of theCONSIDERATION” for each month of delay, or the corresponding proportion. |
4. | In the event that theDEVELOPER is not delivering any amount ofPOTABLEWATER due to causes attributable to theDEVELOPER, aCONVENTIONAL PENALTY equivalent to 100% (one hundred percent) of the monthly T2 provided in Format 7 of “EHXIBIT G. Financial formats for the calculation of theCONSIDERATION” for each month of delay, or the corresponding proportion, shall be applicable. |
The amount of these expenses shall be updated in accordance with theINPC from such base date, until the date in which the compliance is satisfied.
The payment of the conventional penalties shall not release theDEVELOPER from any of its contractual obligations, or from complying with those in delay, irrespective of the authority ofCEA to rescind thisAPP in terms ofCLAUSE THIRTY FIRST of this instrument. Notwithstanding, the payment of the conventional penalties shall be the sole remedy ofCEA payable by theDEVELOPER toCEA as a consequence of the breach of theDEVELOPER and within the limits established in thisAPP.
In each event of application of conventional penalties,CEA shall notify in writing to theDEVELOPER the corresponding amount that it has to pay and the date on which it must be delivered toCEA. In the event of breach of such date,CEA shall proceed to enforce the corresponding guarantees in terms ofCLAUSE TWENTY EIGHTH.
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The payment of the conventional penalties mentioned in thisCLAUSE THIRTY FIFTH, does not release theDEVELOPER from the liabilities for damages and losses caused to third parties, including environmental damage, as well as of the sanctions and infractions mentioned in Titles Seventh and Tenth of the National Waters Law and Title Tenth of its Regulations, or any otherAPPLICABLE LAWS.
The payment of the conventional penalties that may be applied to theDEVELOPER as a result of the rescission of thisAPP, shall be binding to theDEVELOPER provided that there is a definitive resolution obliging it to make such payment, which shall in no event exceed theCONSTRUCTION GUARANTEE or theOPERATION GUARANTEE, as applicable.
TheDEVELOPER shall pay toCEA the amount resulting from the conventional penalties mentioned in thisCLAUSE THIRTY FIFTH within a term of 30 (thirty)BUSINESS DAYS counted as from the date of the written notification on its application byCEA to theDEVELOPER,accompanied with the corresponding definitive resolution. This penalty may not be greater than the amount of theCONSTRUCTION GUARANTEEor theOPERATION GUARANTEE, as applicable.
In the event that theDEVELOPER does not cover the amounts of the conventional penalties in which it incurs within such term,CEA shall require their payment to the bond company granting theOPERATION GUARANTEE or theCONSTRUCTION GUARANTEE, as applicable.
In the event of applicability of two or more conventional penalties for the same event, the highest conventional penalty shall be applied.
THIRTY SIXTH.- LABOR LIABILITY.
TheDEVELOPER, as employer of the personnel occupied as a result of the works subject-matter of thisAPP, shall be solely liable for the obligations arising from theAPPLICABLE LAWS in labor, safety and social welfare matters. All the activities and documents related to the compliance of such obligations shall be informed and duly evidenced periodically by theDEVELOPER toCEA, when the latter requests so.
Therefore, theDEVELOPER agrees to answer all the claims that its workers may file against it or againstCEA, in connection with the execution of thePROJECT WORKS or the performance of the services subject-matter of thisAPP.
Upon expiration of the term of thisAPP for any reason, theDEVELOPER obliges itself to terminate the labor relationships that it has as of date, with the workers at its service, paying the corresponding debts and indemnifications in terms of the applicable labor provisions.
If the early termination of theAPP arises from any cause not attributable to theDEVELOPER, but attributable toCEA (including without limitation the early termination due to general interest reasons pursuant to section V of the Thirtieth Clause above), the expenses generated by the payment of compensation to the workers shall be considered as part of the evidenceable expenses thatCEA shall pay to theDEVELOPER. On the other hand, in the event of early termination of thisAPP for any cause not attributable to either party (including without limitationACTS OF GOD orFORCE MEJEURE EVENTS), the expenses generated by severance payments to the workers shall be covered in equal parts by theDEVELOPER andCEA.
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THIRTY SEVENTH.- ASSIGNMENT OF RIGHTS AND SUBCONTRACTING.
TheDEVELOPER may not assign, transfer, encumber, compromise or grant in guarantee, in any manner, totally or partially, the rights arising from thisAPP, without the prior written authorization ofCEA, except as provided in thisCLAUSE THIRTY SEVENTH.
In terms of the paragraph above,CEA hereby authorizes theDEVELOPER to assign to theADMINISTRATION TRUST the collection rights of theDEVELOPER pursuant to thisAPP, including without limitation, the right to receive theCONSIDERATION. Likewise,CEA hereby authorizes theDEVELOPER and its shareholders to affect in guarantee the shares representing the corporate capital of theDEVELOPER.
TheDEVELOPER may subcontract theWORKS or any of its obligations arising from thisAPP, prior written authorization ofCEA, unless thePROPOSAL had provided that theDEVELOPER would subcontract theWORKS, in which event, such previous authorization shall not be required.Such authorization may only be denied byCEA when there is a justified cause, which is evidenced to theDEVELOPER.
Irrespective of having the authorization ofCEA for the subcontracting, theDEVELOPER shall remain solely liable for the quality and adequate and timely execution of theWORKS subject matter of thisAPP, as if such subcontracting had not occurred and therefore, shall ensure that each Contractor complies with all the terms and conditions of thisAPP.
The consent ofCEA to subcontract does not release or exempt theDEVELOPER from its responsibilities and obligations arising from thisAPP, therefore, it shall be completely liable for the breaches, omissions and negligent acts in which one or all of the Contractors, their agents, employees or personnel incur and shall keepCEA safe from any liability, loss or expense made for such cause.
In the event that theDEVELOPER obtains from one of its contractors a guarantee for any of the works performed or executed, for a term longer than that of thisAPP, it obliges to transfer toCEA the benefit of such guarantee.
Except as set forth in the paragraph above, no direct legal relationships shall be generated betweenCEA and the contractors.
THIRTY EIGHTH.- NOTICES
All the communications between thePARTIES relating to theAPP, shall be made in writing, with acknowledgement of receipt and delivered to the domicile of the receiver party, mentioned in thisCLAUSE THIRTY EIGHTH:
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STATE WATER COMMISSION OF BAJA CALIFORNIA
(“CEA”)
Bulevar Anáhuac No. 1016, Col. El Vidrio, C.P. 21080, Mexicali
Baja California
AGUAS DE ROSARITO, S.A.P.I. DE C.V.
(“DEVELOPER”)
Boulevard Sánchez Taboada 10488-801, Zona Río, Tijuana
Baja California C.P. 22320
Any change to the mentioned domiciles shall be notified to the otherPARTY with at least 10 (ten)BUSINESS DAYS of anticipation. In the event that theDEVELOPER omits notifying in writing toCEA any change of its domicile, the notices made byCEA in the domicile mentioned in thisCLAUSE THIRTY EIGHTH or in the last domicile notified in writing by theDEVELOPER, shall have all legal effects.
TheDEVELOPER shall be obliged to notifyCEA the name of its legal representative, to whom all communications related to theAPP shall be addressed. This representative shall have the sufficient authority to make the corresponding decisions, or to transfer to the administration bodies of theDEVELOPER, the requirements related to theAPP.
In the event of any change of domicile, the otherPARTY shall be notified in writing, as it shall be understood that such change shall be effective as from the date of written evidence of knowledge of the counterpart.
THIRTY NINTH.- DISCREPANCIES IN THE INFORMATION
In the event of discrepancies in the information or documents comprising theAPP, the following shall apply. If the discrepancy arises:
1. | Between an original and its copies, the original shall prevail; |
2. | Between the amounts written in letter and those written in number, the amounts written in letter shall prevail; |
3. | Between the clauses of theAPP and its Exhibits, the provisions of the exhibits shall prevail, except for the previous versions of thisAPP and any clarifications or documents related to such previous versions, which shall have no effect over the clauses of thisAPP; |
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4. | Between theBASES OF THE PUBLIC BIDDING and theAPP, theAPP shall prevail; |
5. | Among the Exhibits of thisAPP, they shall prevail in the appearing order inCLAUSE FORTY FIRST of thisAPP. |
TheDEVELOPER shall be liable for the calculation errors made in the preparation of the documents in its charge or under its responsibility. If applicable, the calculation errors shall be corrected in the manner that results consistent with the purpose of theAPP, pursuant to theAPPLICABLE LAWS.
The Exhibits that exist at the moment of execution of thisAPP or those prepared afterwards shall form an integral part of theAPP.
ThePARTIES accept that any agreement or provision contained in thisAPP which results contrary to any public order provision shall be considered as inexistent and shall not affect the validity of the other terms and conditions of theAPP. When legally possible, thePARTIES shall carry out all applicable actions to substitute the invalid terms and conditions.
FORTIETH.- ARBITRATION
All disputes arising out of or in connection with thisAPP, shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce (the “REGULATIONS OF THE CCI”), valid at the moment of execution of this agreement, which are deemed incorporated to this clause.
The place of arbitration shall be solely and exclusively the City of Mexicali, Baja California, United States of Mexico, without thePARTIES being submitted to the discretional authority of the arbitration tribunal of carrying out hearings and meetings anywhere it considers appropriate.
The Parties agree that the applicable legislation shall be theLAPPEBC and its Regulations and other valid applicable laws in Mexico.
The language to be used in the arbitration procedure shall be Spanish.
The number of the arbitrators shall be 3 (three), designated pursuant to theREGULATIONS OF THE CCI, provided that the third arbitrator, who shall act as Chairman, shall be designated by the other two co-arbitrators, designated by thePARTIES. In the event that the two first co-arbitrators do not designate the third arbitrator within the 30CALENDAR DAYS following the confirmation of the second co-arbitrator, such arbitrator shall be designated pursuant theREGULATIONS OF THE CCI.
The arbitration award shall be final and binding for thePARTIES.
ThePARTIES expressly agree that, irrespective of who commences the arbitration, theDEVELOPERshall anticipate all the fees of the arbitrators and the administrative expenses of the International Court of Arbitration of the International Chamber of Commerce. Irrespective of whether the arbitration award grants the payment of other claims in its favor, the arbitration tribunal may only grant costs and expenses in favor of theDEVELOPER when:
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(a) | The actions or defenses ofCEA are considered unfounded, frivolous or reckless; or |
(b) | That the conduct ofCEA in the procedure was inappropriate and unconducive in such a manner that the arbitral tribunal considers justified to order the indemnification to theDEVELOPER for the costs and expenses incurred due to the arbitration procedure. |
Except as otherwise provided in thisAPP or as agreed by thePARTIES, irrespective of the commencement or the procedure of an arbitration, each of thePARTIES shall be obliged to continue complying with its obligations pursuant to thisAPP.
FORTY FIRST.- EXHIBITS.
ThePARTIES acknowledge as integral part of thisAPP the following Exhibits listed below:
EXHIBIT 13 | Initial Tariffs and Adjustments to the Amount of theCONSIDERATION |
EXHIBIT 4 | PROPOSAL |
EXHIBIT 1 | CALL |
EXHIBIT 2 | AWARD |
EXHIBIT 3 | CERTIFIED COPY OF THE CHARTER OF INCORPORATION OF THE DEVELOPER |
EXHIBIT 5 | Scope of the Works of theTERMS OF REFERENCE |
EXHIBIT 6 | QUALITY ASSURANCE HANDBOOK |
EXHIBIT 7 | Protocol ofTESTSandSET-UP OF OPERATIONS of theSYSTEM |
EXHIBIT 8 | ProposedCALENDARED SCHEDULE |
EXHIBIT 14 | Quality of thePOTABLE WATER |
EXHIBIT 16 | Concessions, Authorizations, Licenses and Permits |
EXHIBIT 17 | Procedure for theDELIVERY of theSYSTEM |
EXHIBIT 18 | Regulations to measure the quality and quantity of theINTAKE WATER, POTABLE WATER andWASTE WATER |
EXHIBIT 9 | [Intentionally left blank]. |
EXHIBIT 10 | [Intentionally left blank]. |
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EXHIBIT 11 | [Intentionally left blank]. |
EXHIBIT 12 | [Intentionally left blank]. |
EXHIBIT 15 | [Intentionally left blank]. |
Likewise, they acknowledge as an integral part of thisAPP the documents that shall hereinafter be included in the progressive numerical order, identified asEXHIBITS and duly executed by bothPARTIES.
FORTY SECOND.- PUBLIC NATURE OF THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT APP
ThisAPP is of public order and does not lose its nature for the participation of theDEVELOPER, as the services that it shall perform in terms ofCLAUSE FIRST of thisAPP, are of social interest as they shall provideCEA better efficiency in the rendering of the public service of supply ofPOTABLE WATER which corresponds to the State of Baja California to provide to the community.
FOURTY THIRD.- AMENDMENTS TO THE APP
The considerations mentioned in thePROPOSAL shall be responsibility of theDEVELOPER; therefore, if at the moment of preparing theEXECUTIVE PROJECT, amendments or variations to thePROPOSALare required, different toCHANGES IN LAW or any other circumstances established in thisAPP, in the quality or quantity of thePOTABLE WATER, all the adjustments for the compliance therefore shall be at its expense, except for those required byCEA, and shall be governed by articles 106 and 107 of theLAPPEBC. To that effect, theDEVELOPER shall be entitled to propose the necessary adjustments toCEA.
The amendments arising from technological innovations shall be governed pursuant to the provisions of Clause Sixth of this APP.
In the event that, in the future there areCHANGES IN LAW or circumstances resulting in greater requirements in the quality or quantity of thePOTABLE WATER arise after the execution of theAPP,CEA shall, at the request of theDEVELOPER, carry out amendments thereto or to theAPPpursuant to the proposal of theDEVELOPER, to adjust it to the new circumstances, laws or normativity; which theDEVELOPER obliges itself to implement, provided that there is a written agreement of bothPARTIES regarding the manner in which the foregoing shall be carried out, the impact that it could have on theCONSIDERATIONor in the term of thisAPP.
Likewise, with the purpose of reestablishing the economic equilibrium of the project in terms of article 108 of theLAPPEBC, theDEVELOPER shall be entitled to the review of theAPP when, as a result of aCHANGE IN LAW, the cost of execution of thePROJECT is substantially increased, or the benefits in its favor are reduced, also substantially.
For such purposes, it is understood that the mentioned variations are substantial when they are durable (that is, they persist for more than 5 (five)BUSINESS DAYS) and place at risk the financial viability of thePROJECT (that is, that they represent any change in the financial conditions considered in thePROPOSAL).
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Likewise, theAPPshall be reviewed when due to aCHANGE IN LAW there is an economic disequilibrium thereof, which implies a yield for theDEVELOPER greater than the one provided in itsECONOMIC PROPOSAL and in thisAPP.
IfCEAdoes not answer the proposal of theDEVELOPER in an affirmative manner within the 15CALENDAR DAYS following its submittal, or disagrees with the estimate adjustment proposed by theDEVELOPER and after making a reasonable and good faith effort, thePARTIES are unable to agree an adjustment that allows theDEVELOPER to reestablish the economic situation in which it was before theCHANGE IN LAW, or to carry out the necessary adjustments in theCONSIDERATION, any of the Parties may, within the 2 (two)BUSINESS DAYSfollowing the notice of the corresponding proposal, submit the controversy to the procedure established in Clause Fortieth of thisAPP. TheCONSIDERATION may be adjusted while the disagreement is being resolved, but in any event, the adjustments shall be retroactive from the date on which the costs of theDEVELOPER had increased or diminished as a result of theCHANGE IN LAW.
If aCHANGE IN LAW cannot be remedied even through an adjustment in theCONSIDERATION,pursuant to that certified within the procedure established in Clause Thirty Fourth, such event shall constitute aFORCE MAJEURE EVENT.
For the purposes set forth in this Clause, theDEVELOPER shall not be liable for the noncompliance of any of its obligations arising from theAPP to the extent and for as long as such compliance is not possible as a result of the acts that theDEVELOPER shall necessarily adopt to comply with aCHANGE IN LAW, in the understanding that theDEVELOPER shall make its best efforts and act with due diligence to, as soon as possible, conclude the actions required in accordance with the prudent practices of the industry to comply with theCHANGE IN LAW.
FORTY FOURTH.- CONDITIONS FOR THE COMMENCEMENT OF EFFECTIVENESS OF THE APP
ThisAPP shall be binding for theDEVELOPER and forCEA from the date on which each and all of the following conditions are met:
1. | The incorporation, registration and effectiveness of theADMINISTRATION TRUST. |
2. | The incorporation, registration and effectiveness of theMASTER GUARANTEE TRUST, as well as the affectation of the corresponding percentage of the income arising from the tax on personal remuneration, in terms of transitory article eighteenth of the Income Law of the State for 2016 to the assets of suchMASTER GUARANTEE TRUST, which shall occur, at the latest within the 3 (three) months following the date of execution of thisAPP. |
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3. | That theDEVELOPER has obtained the permits and authorizations for the use of theRIGHT OF WAY, in terms ofCLAUSE EIGHTH. |
4. | ThatCEA has obtained the rights required for the collection, use and exploitation of theINTAKE WATER, in terms ofCLAUSE FIFTEENTH, which shall occur, at the latest, within the 4 (four) months following the date of execution of thisAPP. |
5. | The execution of theWATER PURCHASE AND SALE AGREEMENTand the contribution of the collection rights ofCEA thereunder, to theADMINISTRATION TRUST. |
6. | The execution, registry and effectiveness of theCURRENT ACCOUNT LOANand the contribution of the rights arising therefrom to theADMINISTRATION TRUST,which shall occur within the 6 (six) months following the date of execution of thisAPP, as well as evidence that theCURRENT ACCOUNT LOAN has been registered within theMASTER GUARANTEE TRUST with the purpose of having theSPF guarantee possible liquidity shortfalls ofCEA in terms of thisAPP. |
7. | The hiring of theSUPERVISION. |
8. | Obtaining the authorizations and permits necessary for the discharge of theWASTE WATER. |
9. | The execution of theFINANCIAL AGREEMENTSthat allow theDEVELOPER access to the necessary resources to comply with its obligations under thisAPP. The foregoing in the understanding that if the failure to execute theFINANCIAL AGREEMENTS is outside the reasonable control of theDEVELOPER, is not attributable to its guilt or negligence, and could not have been avoided despite the exercise of due diligence, theDEVELOPER may claim the existence of anACT OF GOD or aFORCE MAJEURE EVENT in terms of thisAPP . |
Unless thePARTIES agree an extension in writing, in the event that the conditions mentioned in sections 2 and 6 above are not met within the terms established for such purpose, thisAPP may be early terminated by theDEVELOPER, without any liability, and being entitled to the reimbursement of the expenses and investments carried out by theDEVELOPER or incurred and pending of amortization, calculated based on the corresponding receipts submitted by theDEVELOPER.
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FORTY FIFTH.- ADMINISTRATION TRUST
TheDEVELOPER andCEA oblige themselves to incorporate theADMINISTRATION TRUST in (BANK), which shall have, among other, the following purposes: a) to administer all the resources arising from theCONSIDERATION, as well as theRISK CAPITAL and the resources arising from theFINANCIAL AGREEMENTS; b) to receive the resources arising from theWATER PURCHASE AND SALE AGREEMENT to pay theCONSIDERATION in the manner and terms mentioned in thisAPP and in theADMINISTRATION TRUST; c) the administration and management of all the necessary resources or those directly or indirectly related with the preparation of theEXECUTIVE PROJECTS, the construction, equipment and set-up of operations of theSYSTEM, as well as with the operation, conservation and maintenance of theSYSTEM; and d) the administration, management and disposal of the resources arising from theCURRENT ACCOUNT LOAN,which right of disposition shall also be affected to theADMINISTRATION TRUST.
TheDEVELOPER obliges itself to deposit into the assets of theADMINISTRATION TRUST, theRISK CAPITAL and the resources from theFINANCIAL AGREEMENTS or the rights over them, as well as all the income arising from theCONSIDERATION and to be subject to the priority and conditions for its disposition established therefor.
FORTY SIXTH.- TOTAL COST OF THE SYSTEM.
TheTOTAL COST OF THE SYSTEM, pursuant to all the terms and conditions included in thisAPP and its Exhibits, is of $9,072’882,279.00 (nine billion, seventy two million, eight hundred and eighty two thousand, two hundred and seventy pesos/100 Mexican Currency) without IVA, in values of February, 2016. TheTOTAL COST OF THE SYSTEM is comprised by theCOST OF THE SYSTEM and theCOST OF THE WORKS, and shall be adjusted and updated pursuant toEXHIBIT 13 of thisAPP.
TheCOST OF THE SYSTEM shall be integrated by thePROJECT WORKS, theSUPERVISIONand Other Costs in accordance with the following items and values:
DESALINATION PLANT | ||||||||||||
ITEM | Grand Total | First Stage Total | Second Stage Total | |||||||||
1. Executive Project | ||||||||||||
Preparation of the Executive Project, including: Engineering, complementary and detailed studies, projects, affected land occupancy; except for the area on which the Plant shall be located, filings and procedures or the required authorizations, etc. | ||||||||||||
Total | 129,378,662 | 85,999,912 | 43,378,750 |
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2. Construction and Equipment | ||||||||||||
Land and Right of Way | 466,560,000 | 466,650,000 | 0 | |||||||||
Reimbursement Certificate | 30,314,502 | 30,314,502 | 0 | |||||||||
Preoperative expenses | 322,750,433 | 228,885,498 | 93,864,935 | |||||||||
Collection and plant conduction Works | 371,509,567 | 327,705,931 | 43,803,636 | |||||||||
Pretreatment | 1,246,358,473 | 611,205,745 | 635,152,727 | |||||||||
Plant Civil Works | 537,393,815 | 271,443,166 | 265,950,649 | |||||||||
Inverse Osmosis Equipment | 1,466,081,043 | 653,210,705 | 812,870,338 | |||||||||
Post-treatment | 230,898,475 | 121,389,384 | 109,509,091 | |||||||||
Aqueduct Pumping Equipment | 246,022,009 | 167,801,230 | 78,220,779 | |||||||||
Aqueduct | 1,295,107,503 | 888,359,451 | 406,748,052 | |||||||||
Tank 3 Expansion | 91,134,127 | 59,845,815 | 31,288,312 | |||||||||
Delivery Point(s) Connection(s) | 66,103,477 | 59,845,815 | 6,257,662 | |||||||||
Waste Water Conduction Line | 30,135,127 | 30,135,127, | 0 | |||||||||
Other Items | 167,533,040 | 136,244,728 | 31,288,312 | |||||||||
Electric lines, substation and control | 941,570,222 | 537,951,001 | 403,619,221 | |||||||||
Tests, Testing Equipment and Set-up of Operations | 368,660,761 | 212,219,202 | 156,441,558 | |||||||||
Activities prior to the commencement of operations, systems implementation: for the attention of contingencies, quality assurance industrial security, environmental protection, etc., preparation and delivery of the finished works blueprints. | 84,887,681 | 84,887,681 | 0 | |||||||||
Project Works Total | 7,963,020,254 | 4,888,004,980 | 3,075,015,274 | |||||||||
3. Supervision of Items (1+2) | 161,847,978 | 99,480,098 | 62,367,880 | |||||||||
4. Other | ||||||||||||
Other costs included | 271,500,000 | 181,000,000 | 90,500,000 | |||||||||
5. Cost of the System | 8,525,746,895 | 5,254,484,991 | 3,271,261,904 |
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TheCOST OF THE WORKS is comprised by the following items and values:
6. Costs of the Works | ||||||||||||
Administration Trust Fees | 5,400,000 | 3,600,000 | 1,800,000 | |||||||||
Loan letter, Insurances and Bonds | 50,000,000 | 30,000,000 | 20,000,000 | |||||||||
Financial Commissions | 491,735,384 | 328,317,806 | 163,417,578 | |||||||||
Total | 547,135,384 | 361,917,806 | 185,217,578 | |||||||||
7. Total Cost of the System | 9,072,882,279 | 5,616,402,797 | 3,456,479,482 |
These resources shall come, in the first stage of thePROJECT, from:
1. | TheRISK CAPITAL, equivalent to 20.58% of theTOTAL COST OF THE SYSTEM. |
2. | TheFINANCIAL AGREEMENTS, equivalent to the 79.42% of theTOTAL COST OF THE SYSTEM. |
3. | These contributions shall be made according to theCALENDARED SCHEDULE. |
These resources shall come, in the second stage of thePROJECT, from:
1. | TheRISK CAPITAL, equivalent to 20.82% of theTOTAL COST OF THE SYSTEM. |
2. | TheFINANCIAL AGREEMENTS, equivalent to the 79.18% of theTOTAL COST OF THE SYSTEM. |
Notwithstanding that theDEVELOPER does not consider within the amount of theTOTAL COST OF THE SYSTEM a specific category for theIVA, the amounts for this contribution caused and which are related to thisAPP, shall be financed as long as it does not recover them.
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FORTY SEVENTH.- MAXIMUM LIMIT OF LIABILITY
Except for those specific limits established in thisAPP, in any event the liability of theDEVELOPER in connection with thisAPP shall in no event exceed:
(a) | During theINVESTMENT PERIOD and until theDATE OF COMMENCEMENT OF OPERATIONS, the total amount of liability of theDEVELOPER shall be the total amount of theCONSTRUCTION GUARANTEE; |
(b) | As from theDATE OF COMMENCEMENT OF OPERATIONS and until the date ofDELIVERY of theSYSTEM regardless the cause therefor, the total amount of liability of theDEVELOPER shall be the total amount of theOPERATION GUARANTEE; |
FORTY EIGHTH.- OBLIGATIONS OF THE DEVELOPER.
Regardless of the other obligations assumed by theDEVELOPER in theAPP, the latter is obliged to:
1. | Negotiate and obtain, as well as to maintain in full force and effect, each and every authorizations, licenses, permits and analogous documents pursuant to theAPPLICABLE LAWS required for the compliance of its obligations pursuant to thisAPP expressly established inEXHIBIT 16 of thisAPP. |
2. | Obtain the construction materials, as well as the equipment and materials necessary for the operation, conservation and maintenance of theSYSTEM, new and in compliance with theAPPLICABLE LAWS and the quality standards established in the handbooks and protocols drafted by theDEVELOPERand attached hereto asEXHIBITS. |
3. | Refrain from assigning, mortgaging, transferring or encumbering in any way in favor of third parties, whether individuals or companies, the rights, assets and obligations arising from thisAPPand its Exhibits, without the previous and express written approval ofCEA, except as expressly provided in thisAPP. |
4. | Execute, as sole responsible beforeCEA, theWORKS OF THE PROJECT pursuant to thisAPP and its Exhibits. |
5. | Subject itself to the safety provisions established in the workplace, in the terms requested in theCALLor established in itsPROPOSAL, as well as theAPPLICABLE LAWS in construction, safety and use of public roads matters in force at the date of theBASES OF THE PUBLIC BIDDING; any regulatory modifications on this regard, shall be governed pursuant toCLAUSE FORTY THIRD of thisAPP. |
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6. | Answer for the damages and losses, direct and material, expressly excluding loss of profit and indirect damages (that is, loss of profit and/or income that a party might have obtained if the other party had duly and fully complied with its obligations, understanding as such, without limitation, the production, financial and hiring losses) or consequential damages, as well as those that are covered by the insurances hired by theDEVELOPER, that are caused toCEA or to third parties, as a result of the execution of thePROJECT WORKS or during the operation of theSYSTEM. The risks of the works until the moment of their delivery toCEA shall be in charge of theDEVELOPER, who shall hire the insurances mentioned inCLAUSE TWENTY SEVENTH of thisAPP for such purposes. The liability of theDEVELOPER under this section may not exceed the amount of the hired insurances. |
7. | Repair or replace, at its expense, the equipment and facilities of theSYSTEM at the expiration of their useful life throughout the term of theAPP; to answer for hidden defects for the operation, maintenance and replacement of its equipment, within the 12 (twelve) months following the date of termination of thisAPP and reception of theSYSTEM byCEA, considering the ordinary wear and tear of the facilities and equipment. The liability mentioned in this section shall be covered by theDEVELOPER through the granting of theAPP TERMINATION GUARANTEE. |
8. | TheDEVELOPER shall allow the personnel previously appointed in writing byCEA and previously authorized by theDEVELOPER at its entire discretion, to have free access during all theOPERATION PERIOD to the facilities of theSYSTEM, to carry out the inspection and control of the monitoring and improvements in the treatment process, pursuant to the provisions of thisAPP. |
9. | Design, construct and hydraulically operate the components of theSYSTEM established in sections II.2.1 and II.2.2 of Chapter II Technical Specifications referred to inAPPENDIX 1: TERMS OF REFERENCEof theBASES OF THE PUBLIC BIDDING for purposes of the development of thePROJECT. |
FORTY NINTH.- LIABILITY FOR THE QUANTITY AND QUALITY OF THE WATER.
TheDEVELOPER shall be liable beforeCEA for the continuous and efficient operation of theSYSTEM according to thisAPP, being its sole liability to cover any damage or injury, expressly excluding loss of profit and indirect damages (that is, loss of profit and/or income that a party might have obtained if the other party had duly and fully complied with its obligations, understanding as such, without limitation, the production, financial and hiring losses) or consequential damages, as well as those that are covered by the insurances hired by theDEVELOPERincurred byCEA, that is direct and immediate consequence of the inadequate or deficient operation of theSYSTEM.
TheDEVELOPER shall be exempted from the liability referred to in the paragraph above, when the breach to the amount of water to be pumped, conducted or potabilized is a consequence of:
1. | A direct instruction ofCEA. |
2. | TheSYSTEM being in a conservation or maintenance period. |
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3. | Events arising fromACTS OF GOD,FORCE MAJEURE EVENTS orCHANGE IN LAW which include, without limitation, the following: |
a. | Interruption of the electric energy supply |
b. | The material impossibility of pumpingINTAKE WATER, arising from acts of third parties or from the prohibition by any authority. |
c. | That theINTAKE WATER does not comply with the minimum quality and conditions established in thePROPOSAL. |
FIFTIETH.- CONFIDENTIALITY
Upon the conclusion of the term of theAPP, theDEVELOPER shall be obliged to transfer in favor ofCEA the rights of use over the industrial property implying the technology and equipment used in the pumping and conduction of water, subject-matter of thisAPP(with respect to which theDEVELOPER has the right to do so), in the terms that allowCEA to operate theSYSTEM adequately and exclusively.
The assets affected to the subject-matter of thisAPP may not be used for purposes other than those set forth herein.
FIFTY FIRST.- OBLIGATIONS OF CEA.
Regardless of the other obligations assumed byCEA in thisAPP, it is obliged to:
1. | Support theDEVELOPER in the negotiation of theFINANCIAL AGREEMENTS, permits, licenses and authorizations that theDEVELOPER is obliged to obtain for the execution of thePROJECT WORKS and services subject matter of thisAPP. |
2. | Guarantee to theDEVELOPER throughout the term of thisAPP, the use of the real estate for the construction, equipment and set-up of operations of thePROJECT. |
3. | Carry out the procedures to obtain, as well as to maintain in full force and effects, each and every authorizations, licenses, permits and analogous that, pursuant to theAPPLICABLE LAWS, are required to obtain theINTAKE WATER. |
4. | Negotiate with theSPF the creation and registry of theMASTER GUARANTEE TRUST, as well as the affectation of the rights corresponding to it. |
5. | Pay theCONSIDERATION. |
6. | Contribute to theADMINISTRATION TRUST the collection rights and the resources corresponding to such rights, arising from theWATER PURCHASE AND SALE AGREEMENT, to be destined to the payment of theCONSIDERATION, in terms of thisAPP. |
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7. | Execute theWATER PURCHASE AND SALE AGREEMENT withCESPT, with the purpose ofCEA obtaining the necessary and sufficient resources to pay to theDEVELOPER the payment of theCONSIDERATION in thisAPP. |
8. | Execute and cause theCURRENT ACCOUNT LOAN to come into effect,contributing to theADMINISTRATION TRUST the rights of disposition of suchCURRENT ACCOUNT LOAN. |
9. | Entrust the trustee of theADMINISTRATION TRUST the hiring of theSUPERVISION. |
10. | Register thisAPP and the obligations related thereto or arising therefrom, including without limitation theCURRENT ACCOUNT LOAN, before the Sole Public Registry established in the Law of Financial Discipline of the Federal Entities and Municipalities, in charge of theSHCP. |
11. | Have the sufficient capacity to receive the annual guaranteed volume ofPOTABLE WATER. |
FIFTY SECOND.- HEADINGS.
The headings of the clauses have been established with the sole purpose of facilitating their reading and comprehension; however, they do not prejudge on the content thereof or cause any obligation to thePARTIES.
FIFTY THIRD.- UNCONDITIONAL ACCEPTANCE.
The execution of thisAPP, including its formalization before notary public, implies the complete and unconditional acceptance of its terms by thePARTIES, who are aware of all of their consequences and scope.
ThePARTIES,being aware of the content and scope of thisAPP and its Exhibits execute it in conformity, in duplicate, in the City of Mexicali, Baja California, on the 22nd day of August of 2016.
BY THE BAJA CALIFORNIA STATE WATER COMMISSION | BY THE DEVELOPER AGUAS DE ROSARITO, S.A.P.I. DE C.V. | |
MR. GERMÁN JESÚS LIZOLA MÁRQUEZ GENERAL DIRECTOR | MR. MICHAEL AVANT SMITH CHAIRMAN OF THE BOARD OF DIRECTORS | |
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BY THE DEVELOPER AGUAS DE ROSARITO, S.A.P.I. DE C.V.
|
BY THE DEVELOPER AGUAS DE ROSARITO, S.A.P.I. DE C.V. | |
MR. FREDERICK W. MCTAGGART MEMBER OF THE BOARD OF DIRECTORS | MR. LAUTARO MANUEL MILLAMAN-TERUEL ALTERNATE MEMBER OF THE BOARD OF |
BY THE MINISTRY OF PLANNING AND FINANCE OF THE STATE | JOINT OBLIGOR TIJUANA STATE COMMISSION OF PUBLIC UTILITIES | |
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MR. ANTONIO VALLADOLID RODRÍGUEZ SECRETARY OF PLANNING AND FINANCE OF THE STATE OF BAJA CALIFORNIA | MR. MIGUEL LEMUS ZENDEJAS GENERAL DIRECTOR, | |
WITNESS MINISTRY OF INFRASTRUCTURE AND URBAN DEVELOPMENT OF THE STATE
| ||
MR. MANUEL GUEVARA MORALES SECRETARY |
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 1
CALL 002 / 2015
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 2
AWARD
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 3
PUBLIC DEED OF THE COMPANY
“AGUAS DE ROSARITO, S.A.P.I. DE C.V.”
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 4
COMMITMENT LETTER FROM THE PROPOSAL WITH EXHIBITS
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 5
APPENDIX 1.- TERMS OF REFERENCE OF THE BASSES OF THE PUBLIC BIDDING
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 6
QUALITY ASSURANCE HANDBOOK
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 7
PROTOCOL OF TESTS AND SET-UP OF OPERATIONS OF THE SYSTEM
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 8
PROPOSED CALENDARED SCHEDULE
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 9
[Intentionally left blank]
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 10
[Intentionally left blank]
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 11
[Intentionally left blank]
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 12
[Intentionally left blank]
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 13
INITIAL TARIFFS AND ADJUSTMENT TO THE AMOUNT OF THE CONSIDERATION
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 14
POTABLE WATER QUALITY
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 15
[Intentionally left blank]
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 16
ENVIRONMENTAL IMPACT STATEMENT AND OTHER ENVIRONMENTAL PERMITS
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 17
PROCEDURE FOR THE DELIVERY OF THE SYSTEM
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PUBLIC BIDDING No.:SIDUE-CEA-APP-2015-002.
AGREEMENT No.:C-SIDUE-CEA-APP-2015-002
PUBLIC PRIVATE PARTNERSHIP AGREEMENT for the
“CONSTRUCTION, FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.
EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT No. C-SIDUE-CEA-APP-2015-002
No. 18
REGULATIONS FOR THE MEASUREMENT OF THE QUALITY AND QUANTITY OF THE INTAKE WATER, POTABLE WATER AND WASTE WATER
This exhibit shall be included afterwards
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