Parking meter contract; 25% annual penalty for termination “modest” – Smart City
Smart City Solutions (SCS) has deemed its right to be repaid monies spent on the Parking Meter Project multiplied by 25% per year for the remaining time left under the concession, as “quite modest.”
The signed contract between the Mayor and City Council (M&CC) and SCS for metered parking within the city has come in for much criticism and widespread protests in recent weeks with many calling for its total revocation.
However, the contract states that in case of the City’s termination of the concession, “the city must pay a penalty equivalent to the Concessionaire’s expense/investments multiplied by 25% per year for the remaining time left under the concession”. The life of the concession is 49 years though it was proposed that this be reduced to 20 years.
SCS in a statement on Monday (February 13, 2017) deemed its initial agreement as “well within, and even quite modest, as compared to market practice.”
Smart City Solutions noted that the purpose of the clause is to “protect against a potential unilateral termination of the contract for ‘convenience’ by its counterparty” given that “the company’s platform obligations, for instance, include multi-space parking equipment with solar power, backup batteries, integrated communications with regularly updated performance data and login access to the City, road signs, a call center, an integrated enforcement platform and payment and distribution platform, and keeping all the platforms up to par and maintained not only for wear and tear but for any acts of vandalism, accidents and any required improvements.”
The statement which was meant to bash the Kaieteur News for an article it published about the contract on Sunday (February 12, 2017), SCS warned that anyone’s publication of the contract has violated the confidentiality clauses.
It is of the view that if Guyana is seriously opened to foreign private investment, it should adhere to the confidentiality clauses.
The company and SCS are currently conducting a series of consultations to make the project more acceptable to the public.