Build-Lease-Transfer Agreement PPP for School Infrastructure Project

14 May 2012

Milestones

Section Activity Responsibilit

y

Deadline

6.2.c Appointment of the IC DepED Within 60 days from the Execution Date

7.2.a Financial Closure Proponent Not later than 30 days from Execution Date

8.0.a Providing access to the Project Sites

DepED Within 15 days from the Execution Date

12.4.a Issuance of Notice to Proceed DepED 1 day after receipt by the DepED of the Certified DED issued by the IC

12.10.a Construction Works, with IC

certification that requirements for issuance of all Certificates of Completion have been met

Proponent All Sub-Projects must be completed within 12 months from Execution Date

Milestones

Section Activity Responsibilit

y

Deadline

12.10.c

12.10.d

12.10.f

Issuance of Certificate of Completion per Sub-Project

DepED No later than the last day of the month following the month when the Sub-Project passed the Punch List Inspection or Rectification Inspection, as the case may be

14.1 Lease of Completed Sub-Project from the Proponent

DepED (as Lessee) and Proponent (as Lessor)

Starts upon issuance of the relevant Certificate of Completion and shall terminate 10 years from such date.

15.0 Payments to Proponent DepED In accordance with Section 15.0

17.0 Automatic Transfer of Ownership of Completed Assets to DepED

Proponent At the end of the relevant Lease Period

Section 6.0 Independent Consultant

The Independent Consultant must be appointed (i.e.,

the IC Contract must be executed) within 60 days from

Execution Date.

DepEd may initiate the process for soliciting possible IC

candidates even prior to the Execution Date. The

DepEd is required, however, to give the Proponent the

short-list of candidates, and the Proponent may object

to any of the candidates in the short list.

Section 8.0 Project Sites

The DepEd is required to provide access to the Project

Sites within 15 days from Execution Date. “Providing

Access” means the Proponent is allowed to possess and

occupy for purposes of commencing construction.

If DepEd fails to provide access for a Project Site, it has

the option to propose a substitute site, with

substantially the same conditions. The Proponent has

the option to accept or reject the substitute site. If the

Proponent rejects the Project Site, the Sub-Project shall

be excluded from the coverage of the BLT.

Section 9.0 Performance Security

Proponent is required to maintain Performance Security

equivalent to 2% of the Contract Price.

Performance Security shall be in full force and effect

from Execution Date until 60 days from the end of the

latest Final Rectification Deadline.

Final Rectification Deadline: for each Sub-Project, 60

days from the Construction Completion Deadline

Section 10.0 Insurance

Insurance Policies required to be obtained by the

Proponent shall only be in full force and effect from the

Execution Date, until the end of all Final Rectification

Deadlines (60 days from the Construction Completion

Deadline)

Section 11.0 Design

The Independent Consultant shall review all DEDs and

will issue a Certified DED if it complies with the MPSS.

Within 1 day after receipt by the DepEd of the Certified

DED, DepEd shall issue the Notice to Proceed.

Section 12.0 Construction

All Sub-Projects must be completed within the Construction Completion Deadline (12 months from Execution Date, as may be extended due to an Incident)

When Proponent has completed a Sub-Project, it shall send a Construction Completion Notice to the DepEd. The IC and a representative from DepED should conduct the Punch List inspection within 15 days from receipt of the Construction Completion Notice

If no items to be rectified after Punch List Inspection, DepEd shall issue Certificate of Completion (COC) no later than the last day of the month following the month when the Sub-Project passed the Punch List Inspection.

Section 12.0 Construction

If there are still items to be rectified, the IC shall issue a punch list to the Proponent on the day following the end of the Punch List Inspection.

When the punch list items have been rectified, Proponent shall send a Rectification Completion Notice. Within 15 days from receipt of such notice, IC and DepEd shall conduct the Rectification Inspection.

If no items to be rectified after Rectification Inspection, DepEd shall issue COC no later than the last day of the month following the month when the Sub-Project passed the Rectification Inspection.

Section 13.0 Liability for Defects

Proponent shall be liable for all defects,

deficiencies and failures on an Accepted Sub-

Project that constitutes a violation of the

specifications in the MPSS from the date of

issuance of the Certificate of Completion until

the end of the relevant Lease Period, except for

those defects, deficiencies and failures

occasioned by a Force Majeure Event and those

caused by third parties.

Section 15.0 Contract Price

DepEd will only start payment when the Accepted Sub-

Projects is equal to 30% (based on total sub-project co-

efficients)

Lease Payment Dates shall be either March 31, June 30,

September 30 and December 31.

The first lease payment shall cover all monthly lease

payments accrued as of the first lease payment date.

Section 16.0 Maintenance

Periodic Maintenance Works – responsibility of

Proponent, once every 4.5 years from the date of

issuance of the Certificate of Completion

Routine maintenance – including day-to-day cleaning

and upkeep, responsibility of DepED

Section 17.0 Transfer

At the end of the Lease Period for a Sub-Project, the

ownership shall be deemed and considered to be

automatically transferred to the DepED.

Proponent shall bear all costs incurred in connection

with the transfer.

Section 18.0 Force Majeure

If FM lasts for less than 30 days, and happens before Acceptance or Exclusion of a Sub-Project, and Construction can continue, the Construction Completion Deadline may be extended the duration of the FM effect. DepEd has no obligation to pay Proponent for additional costs that may be incurred.

If FM lasts for less than 30 days, and happens before Acceptance or Exclusion of a Sub-Project, and construction cannot continue, DepEd has no obligation to pay lease payments for affected Sub-Project and Proponent not obligated to rebuild. Parties may agree on a substitute site if FM is site-specific.

Section 18.0 Force Majeure

If FM lasts for less than 30 days, and Sub-Project is

already accepted, and effect of FM is that Sub-Project

cannot be used temporarily, parties shall agree on

period to repair. DepEd shall pay for cost of repair.

If Proponent does not repair within agreed period,

DepEd may repair at its own cost.

Lease payments during the period when the Sub-Project

cannot be used shall be suspended. At the end of the

lease period, the DepEd shall pay Proponent a Delayed

Use Penalty equal to the suspended lease payments.

Section 18.0 Force Majeure

If FM lasts for less than 30 days, and the Sub-Project is already accepted and can no longer be used as a result of the FM, lease will be terminated. DepEd shall pay the Proponent a compensation for loss of investment equal to:

Present value of scheduled but unpaid lease payments for the Sub-Project as of the date the DepEd determines that the Sub-Project cannot be used permanently, using a discount rate of PDST-F + 2.5% less the cost of Periodic Maintenance Works that have not been undertaken when the FM occurred, equivalent to 5% of the Sub-Project Contract Price.

Section 20.0 Liquidated Damages

Relevant Section Event Liquidated Damages

Section 12.10.e If by the Construction Completion Deadline, the Proponent has not started the Construction of a Sub-Project.

25% of the Sub-Project Contract Price.

Section 12.10.f If by the Construction Completion Deadline, the Proponent had started construction on a Sub-Project, but not yet issued a Construction Completion Notice, but by the Final Rectification Deadline, the Sub-Project passes either the Punch List Inspection or Rectification Inspection.

40% of Monthly Lease Payment multiplied by the number of months and fraction of a month from the Construction Completion Deadline until the issuance of the Certificate of Completion.

Section 12.10.g If by the Final Rectification Deadline, any project not previously Excluded has not yet passed either the Punch List Inspection or the Rectification Inspection.

25% of the Sub-Project Contract Price.

Section 20.0 Liquidated Damages

Relevant

Section

Event Liquidated Damages

Section 13.0b If DepED notifies the Proponent that there are structural defects or failures due to faulty design and construction in violation of the prescribed MPSS.

40% of the Monthly Lease Payment multiplied by the number of months and fraction of a month from the DepED’s notification to the Proponent that there are structural defects or failures until the actual completion of the required repair, rehabilitation, or reconstruction works.

Section 13.0.c If DepED notifies Proponent of defects in the Sub-Project, and the Proponent does not complete the required repair, rehabilitation, or reconstruction works within 30 days of notice from the DepED that there are structural defects or failures.

40% of the Monthly Lease Payment multiplied by the number of months and fraction of a month from the deadline for the completion of the repair, rehabilitation, or reconstruction works, until the earlier of the actual completion of such repair, rehabilitation, or reconstruction works and when DepED exercises the option to require the removal or demolition of the Sub-Project from the Project Site.

Section 20.0 Liquidated Damages

Relevant

Section

Event Liquidated Damages

Section 16.1.c The Proponent fails to perform the Periodic Maintenance Works within the required period.

20% of the Monthly Lease Payment multiplied by the number of months and fraction of a month that the Periodic Maintenance Works are not performed, from the time they are due to be performed until the time the Periodic Maintenance Works are actually completed.

Section

18.3.c(2) After the occurrence of a Force Majeure event, the Parties agree on the cost of and period for repairs, and the Proponent fails to complete the repairs within the same period.

40% of the Monthly Lease Payment multiplied by the number of months and fraction of a month from the time that the repairs are scheduled to be completed and the time when they are actually completed by either the Proponent or the DepED.

Section 21.0 Default and Termination

Proponent’s obligations for which breach shall constitute a Proponent Default (and if not cured or is not curable, may lead to termination):

1. Maintaining leverage ratio

2. Financial Closure

3. Maintenance of required Performance Security

4. Failure to maintain required insurance policies

5. Submission of as-built drawings

6. Compliance with provisions on corrupt, fraudulent, coercive, undesirable and restrictive practices

7. No material breach of any other obligations, representations and warranties

8. Observance of Philippine laws and regulations, the violation of which has a material adverse effect on its ability to perform its obligations

Section 21.0 Default and Termination

The following shall likewise constitute a Proponent

Default:

If the Proponent is being liquidated and dissolved for

reasons other than insolvency, or is declared insolvent

and/or if the Lenders have determined that the Proponent

is in default or unable to fulfill its obligations to them.

If any amount due from the Proponent to DepED for

Liquidated Damages, after drawing on the Performance

Security (if the Performance Security is still in force)

exceeds fifty percent (50%) of the Lease Payments

scheduled to be paid on all Accepted Sub-Projects at the

time of the issuance of the Notice of Default.