LONGITUDINAL DE LA SIERRA HIGHWAY · 2018. 1. 26. · Concession Contract of the Longitudinal de la...

Concession Contract of the Longitudinal de la Sierra Highway Section 4

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REPUBLIC OF PERU

PRIVATE INVESTMENT PROMOTION AGENCY

PROINVERSIÓN COMMITTEE IN ROAD INFRASTRUCTURE PROJECTS, RAILWAY INFRASTRUCTURE AND AIRPORT INFRASTRUCTURE - PRO

INTEGRACIÓN

CONCESSION CONTRACT

LONGITUDINAL DE LA SIERRA HIGHWAY

Section 4

Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Puente Sahuinto/Dv. Pisco – Huaytará -

Ayacucho

January 2017

Important: This is an unofficial translation. In the case of divergence between the English and Spanish text, the version in Spanish shall prevail.


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CHAPTER I: BACKGROUND AND DEFINITIONS ........................................................... 9

Background ................................................................................................................... 9 Definitions ................................................................................................................... 10 1.11.1 Allowed Creditors ............................................................................................ 10 1.11.2 Certificate of Acceptance ................................................................................. 11 1.11.3 Comprehensive Certificate of Delivery of Assets ............................................. 12 1.11.4 Certificate of Partial Delivery of Assets ............................................................ 12 1.11.5 Certificate of Reversion of Assets .................................................................... 12 1.11.6 Successful Bidder ............................................................................................ 12 1.11.7 Private Investment Promotion Agency – PROINVERSIÓN .............................. 12 1.11.8 Calendar Year ................................................................................................. 12 1.11.9 Concession Year ............................................................................................. 12 1.11.10 Concession Area ............................................................................................. 12 1.11.11 Area of Optional Services ................................................................................ 13 1.11.12 Competent Environmental Authority ................................................................ 13 1.11.13 Government Authority ...................................................................................... 13 1.11.14 Bidding Terms and Conditions ......................................................................... 13 1.11.15 Concession Assets .......................................................................................... 13 1.11.16 CONCESSIONAIRE Assets ............................................................................. 13 1.11.17 Termination of the Concession or Termination ................................................. 13 1.11.18 Roadway ......................................................................................................... 13 1.11.19 Acceptance Committee .................................................................................... 14 1.11.20 Cofinancing ..................................................................................................... 14 1.11.21 GRANTOR ...................................................................................................... 14 1.11.22 Concession ...................................................................................................... 14 1.11.23 CONCESSIONAIRE ........................................................................................ 14 1.11.24 Bid ................................................................................................................... 14 1.11.25 Conservation or Maintenance .......................................................................... 14 1.11.26 Road Conservation or Road Maintenance ....................................................... 14 1.11.27 Periodic Road Conservation or Periodic Road Maintenance ............................ 14 1.11.28 Routine Road Conservation or Routine Road Maintenance ............................. 15 1.11.29 Constructor ...................................................................................................... 15 1.11.30 Concession Contract or Contract ..................................................................... 15 1.11.31 Effective Control .............................................................................................. 15 1.11.32 Right of Way .................................................................................................... 15 1.11.33 Day .................................................................................................................. 15 1.11.34 Calendar Day................................................................................................... 16 1.11.35 Dollar or American Dollar or US$ ..................................................................... 16 1.11.36 Road Emergency ............................................................................................. 16 1.11.37 Affiliated, Parent, Subsidiary or Related Company:.......................................... 16 1.11.38 Banking Company ........................................................................................... 16 1.11.39 Allowed Guaranteed Indebtedness .................................................................. 16 1.11.40 Social Environmental Specifications ................................................................ 16 1.11.41 Environmental Management Instrument (EMI) ................................................. 17 1.11.42 Final Engineering Study (FES) ........................................................................ 17 1.11.43 Technical File .................................................................................................. 17 1.11.44 Exploitation ...................................................................................................... 17 1.11.45 End date of the Concession ............................................................................. 17 1.11.46 Start Date of Exploitation ................................................................................. 17 1.11.47 Date of Signing of the Contract ........................................................................ 17 1.11.48 Management Trust........................................................................................... 17 1.11.49 FONCEPRI ...................................................................................................... 17 1.11.50 Guarantee ....................................................................................................... 18 1.11.51 Performance Bond of Execution of Rehabilitation and Improvement ................ 18


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1.11.52 Performance Bond of Execution of Initial Periodic Maintenance ...................... 18 1.11.53 Performance Bond of the Concession Contract ............................................... 18 1.11.54 IGV (VAT) ........................................................................................................ 18 1.11.55 Progress Report .............................................................................................. 18 1.11.56 Inventories ....................................................................................................... 18 1.11.57 Applicable Laws and Regulations .................................................................... 18 1.11.58 LIBOR.............................................................................................................. 18 1.11.59 Maintenance .................................................................................................... 18 1.11.60 Initial Periodic Maintenance ............................................................................. 19 1.11.61 Improvement.................................................................................................... 19 1.11.62 MTC ................................................................................................................ 19 1.11.63 Service Levels ................................................................................................. 19 1.11.64 Regulatory Rules ............................................................................................. 19 1.11.65 Works .............................................................................................................. 19 1.11.66 Additional Works .............................................................................................. 19 1.11.67 Operation ......................................................................................................... 19 1.11.68 Payment of the GRANTOR .............................................................................. 19 1.11.69 Party ................................................................................................................ 20 1.11.70 Parties ............................................................................................................. 20 1.11.71 Minimum Shareholding .................................................................................... 20 1.11.72 Toll .................................................................................................................. 20 1.11.73 Concession Term ............................................................................................ 20 1.11.74 Program of Execution (PE) .............................................................................. 20 1.11.75 Regulation of Legislative Decree Nº 1224 ........................................................ 20 1.11.76 Rehabilitation ................................................................................................... 20 1.11.77 REGULATOR .................................................................................................. 21 1.11.78 Service ............................................................................................................ 21 1.11.79 Conservation Service ....................................................................................... 21 1.11.80 Mandatory Services ......................................................................................... 21 1.11.81 Optional Services ............................................................................................ 21 1.11.82 Strategic Partner .............................................................................................. 21 1.11.83 Subsection ....................................................................................................... 21 1.11.84 Rate ................................................................................................................. 21 1.11.85 Differentiated Rate ........................................................................................... 21 1.11.86 Rate of Cost of Debt ........................................................................................ 21 1.11.87 Exchange Rate ................................................................................................ 21 1.11.88 Takeover ......................................................................................................... 22 1.11.89 Passage .......................................................................................................... 22 1.11.90 Legislative Decree Nº 1224 ............................................................................. 22 1.11.91 UIT .................................................................................................................. 22 1.11.92 Users ............................................................................................................... 22 1.11.93 Light Vehicle .................................................................................................... 22 1.11.94 Heavy Vehicle .................................................................................................. 22

CHAPTER II: OBJECT, MODALITY AND CHARACTERISTICS .................................... 22

OBJECT ....................................................................................................................... 22 MODALITY ................................................................................................................... 23 CHARACTERISTICS .................................................................................................... 23

CHAPTER III: EVENTS ON THE DATE OF SIGNING OF THE CONTRACT .................. 23

CONCESSIONAIRE STATEMENTS ............................................................................ 23 STATEMENTS OF THE GRANTOR ............................................................................. 26


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OBLIGATIONS OF THE CONCESSIONAIRE ON THE DATE OF SIGNING OF THE CONTRACT .................................................................................................................... 27

OBLIGATIONS OF THE GRANTOR ON THE DATE OF SIGNING OF THE CONTRACT ................................................................................................................. 30

CHAPTER IV: CONCESSION TERM .............................................................................. 31

TERM ........................................................................................................................... 31 SUSPENSION OF THE CONCESSION TERM ............................................................. 31 EXTENSION OF THE CONCESSION TERM ............................................................... 32

CHAPTER V: PROPERTY REGIME ............................................................................... 33

GENERAL PROVISIONS ............................................................................................. 33

LAND AREAS COMPRISED IN THE CONCESSION AREA AND RIGHT OF WAY ....... 34

DELIVERY OF THE CONCESSION AREA .................................................................. 35 DELIVERY OF CONCESSION ASSETS ...................................................................... 36 TAKEOVER .................................................................................................................. 36 PURPOSES OF THE USE OF THE CONCESSION ASSETS ...................................... 37 OBLIGATIONS OF THE CONCESSIONAIRE REGARDING THE CONCESSION ASSETS ....................................................................................................................... 37 RETURN OF THE CONCESSION ASSETS ................................................................. 39 CONCESSIONAIRE ASSETS ...................................................................................... 40 EASEMENTS ............................................................................................................... 40 POSSESSORY DEFENSES ......................................................................................... 41

CHAPTER VI: EXECUTION OF THE INITIAL PERIODIC MAINTENANCE AND THE REHABILITATION AND IMPROVEMENT ....................................................................... 43

TERM OF EXECUTION OF THE INITIAL PERIODIC MAINTENANCE AND THE REHABILITATION AND IMPROVEMENT .................................................................... 43 INITIAL PERIODIC MAINTENANCE AND REHABILITATION AND IMPROVEMENT . 43 SUPERVISION OF THE INITIAL PERIODIC MAINTENANCE AND REHABILITATION AND IMPROVEMENT .................................................................................................. 44 TECHNICAL FILES AND FINAL ENGINEERING STUDY AND ENVIRONMENTAL MANAGEMENT INSTRUMENT FOR THE EXECUTION OF THE INITIAL PERIODIC MAINTENANCE AND THE REHABILITATION AND IMPROVEMENT ........................ 44 LOGBOOK OF INITIAL PERIODIC MAINTENANCE AND REHABILITATION AND IMPROVEMENT AND BOOK OF SUGGESTIONS AND COMPLAINTS ..................... 47 SCHEDULING OF THE EXECUTION OF THE INITIAL PERIODIC MAINTENANCE AND REHABILITATION AND IMPROVEMENT ........................................................... 48 COMMENCEMENT OF EXECUTION OF THE INITIAL PERIODIC MAINTENANCE AND THE REHABILITATION AND IMPROVEMENT ................................................... 48 MODIFICATION OF TERMS FOR THE EXECUTION OF THE INITIAL PERIODIC MAINTENANCE AND/OR REHABILITATION AND IMPROVEMENT .......................... 50 PASSAGE DURING THE EXECUTION OF THE INITIAL PERIODIC MAINTENANCE AND THE REHABILITATION AND IMPROVEMENT ................................................... 51 ACCEPTANCE OF THE INITIAL PERIODIC MAINTENANCE AND THE REHABILITATION AND IMPROVEMENT .................................................................... 52 ADDITIONAL WORKS ................................................................................................. 54 ADDITIONAL WORKS EXECUTED BY THE CONCESSIONAIRE BY MUTUAL AGREEMENT BETWEEN THE PARTIES .................................................................... 55


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ADDITIONAL WORKS DIRECTLY EXECUTED THE GRANTOR ............................... 55 CONSERVATION OF ADDITIONAL WORKS .............................................................. 56 COMMITMENT TO CONTRACTING LOCAL LABOR FOR THE EXECUTION OF THE REHABILITATION AND IMPROVEMENT AND INITIAL PERIODIC MAINTENANCE . 57 NATIONAL OPTICAL FIBER BACKBONE .................................................................. 57

CHAPTER VII: CONSERVATION ................................................................................... 58

OBLIGATIONS OF THE CONCESSIONAIRE .............................................................. 58 CONSERVATION PROGRAMS ................................................................................... 59 ROAD EMERGENCY ................................................................................................... 59 INFORMATION ............................................................................................................ 60

CHAPTER VIII: EXPLOITATION OF THE CONCESSION .............................................. 60

RIGHTS AND DUTIES OF THE CONCESSIONAIRE .................................................. 60 ORGANIZATION OF SERVICES ................................................................................. 60 SUPERVISION OF EXPLOITATION ............................................................................ 61 RIGHTS AND CLAIMS OF USERS .............................................................................. 62 INTERNAL REGULATIONS ......................................................................................... 62 START OF THE EXPLOITATION ................................................................................. 63 OPTIONAL SERVICES ................................................................................................ 64

CHAPTER IX: TOLL AND RATE .................................................................................... 65

TOLL AND RATE ......................................................................................................... 65

CHAPTER X: ECONOMIC-FINANCIAL REGIME ........................................................... 70

COFINANCING ............................................................................................................ 70 OTHER INCOME .......................................................................................................... 71 PAYMENTS OF THE CONCESSIONAIRE FOR SUPERVISION OF THE REHABILITATION AND IMPROVEMENT AND INITIAL PERIODIC MAINTENANCE . 71 TAX REGIME OF THE CONCESSION ......................................................................... 74

CHAPTER XI: GUARANTEES ........................................................................................ 74

GUARANTEE OF THE GRANTOR .............................................................................. 74 GUARANTEES IN FAVOR OF THE GRANTOR .......................................................... 74 PERFORMANCE BOND OF EXECUTION OF REHABILITATION AND IMPROVEMENT AND INITIAL PERIODIC MAINTENANCE ........................................ 74 PERFORMANCE BOND OF THE CONCESSION CONTRACT ................................... 75 EXECUTION OF GUARANTEES ................................................................................. 76 GUARANTEES IN FAVOR OF ALLOWED CREDITORS ............................................ 76

CHAPTER XII: INSURANCE REGIME AND LIABILITY OF THE CONCESSIONAIRE .. 80

APPROVAL .................................................................................................................. 80 CLASSES OF INSURANCE POLICIES ....................................................................... 81 COMMUNICATION ...................................................................................................... 83 EFFECTIVENESS OF POLICIES ................................................................................. 83 RIGHT OF THE GRANTOR TO INSURE ..................................................................... 83 RESPONSIBILITY OF THE CONCESSIONAIRE ......................................................... 84 OTHER RESPONSIBILITIES AND OBLIGATIONS OF THE CONCESSIONAIRE ...... 84 OBLIGATION OF THE GRANTOR .............................................................................. 85


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CHAPTER XIII: SOCIAL ENVIRONMENTAL CONSIDERATIONS ................................. 87

SOCIAL ENVIRONMENTAL OBLIGATIONS OF THE CONCESSIONAIRE ................ 87 ENVIRONMENTAL DOCUMENTATION OF THE CONTRACT ................................... 87 ENVIRONMENTAL MANAGEMENT ............................................................................ 88 TREATMENT OF OVERRUN BY ENVIRONMENTAL MEASURES NOT COVERED BY THE CONTRACT ......................................................................................................... 90

CHAPTER XIV: RELATIONS WITH PARTNERS, THIRD PARTIES AND PERSONNEL .................................................................................................................. 91

ASSIGNMENT OF TRANSFER OF THE CONCESSION ............................................. 91 CLAUSES IN CONTRACTS ......................................................................................... 92 RELATIONS OF THE PERSONNEL ............................................................................ 92 RELATIONS WITH THE STRATEGIC PARTNER ....................................................... 93

CONTRACTS OF EXECUTION OF THE REHABILITATION AND IMPROVEMENT AND INITIAL PERIODIC MAINTENANCE ............................................................................... 93

CHAPTER XV: ADMINISTRATIVE COMPETENCES ..................................................... 94

COMMON PROVISIONS .............................................................................................. 94 COMPETENCES AND POWERS OF THE REGULATOR............................................ 95 SUPERVISION FUNCTION .......................................................................................... 95 SANCTIONING FUNCTION ......................................................................................... 96 CONTRACTUAL PENALTIES .......................................................................................... 96 CONTRIBUTION FOR REGULATION............................................................................... 97

CHAPTER XVI: TERMINATION OF THE CONCESSION ............................................... 97

TERMINATION OF THE CONTRACT .......................................................................... 97 TERMINATION BY MUTUAL AGREEMENT................................................................ 97 TERMINATION FOR BREACH OF THE CONCESSIONAIRE ..................................... 98 TERMINATION FOR BREACH OF THE GRANTOR .................................................. 100

CAPACITY OF THE GRANTOR TO UNILATERALLY TERMINATE THE CONTRACT100

TERMINATION DUE TO FORCE MAJEURE OR ACT OF GOD ................................ 101 RETURN OF THE PERFORMANCE BOND ............................................................... 102 PAYMENT OF THE COMMITMENTS OF PAYMENT OF THE GRANTOR TO THE CONCESSIONAIRE ................................................................................................... 102 EFFECTS OF THE TERMINATION ............................................................................ 103 PROCEDURE FOR THE CORRECTION IN CASE OF BREACH BY THE CONCESSIONAIRE ................................................................................................... 103 PROCEDURE FOR THE RESCUE IN CASE OF TERMINATION OF THE CONTRACT ............................................................................................................... 104

CHAPTER XVII: SUSPENSION OF THE OBLIGATIONS FORESEEN IN THIS CONTRACT .................................................................................................................. 104

PROCEDURE FOR THE DECLARATION OF SUSPENSION .................................... 106 EFFECTS OF DECLARATION OF SUSPENSION ..................................................... 106 MITIGATION .............................................................................................................. 107

CHAPTER XVIII: RESOLUTION OF DISPUTES ........................................................... 107


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APPLICABLE LAW .................................................................................................... 107 SCOPE OF APPLICATION ........................................................................................ 107 CRITERIA FOR INTERPRETATION .......................................................................... 108 WAIVER TO DIPLOMATIC CLAIMS .......................................................................... 108 DIRECT NEGOTIATION ............................................................................................. 108 ARBITRATION ........................................................................................................... 110 COMMON PROCEDURAL RULES ............................................................................ 112

CHAPTER XIX: MODIFICATIONS TO THE CONTRACT.............................................. 114

CHAPTER XX: DOMICILES .......................................................................................... 115

ANNEX I ..................................................................................................................... 116 Appendix 1 ................................................................................................................ 134 Subsections of the Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte Sahuinto/Dv. Pisco – Huaytará - Ayacucho ................................................................................................ 134 Appendix 2 ................................................................................................................ 136 Condition Parameters and Service Levels required for the management control of the CONCESSIONAIRE of the Longitudinal de la Sierra Highway Section 4 ........ 136 Appendix 3 ................................................................................................................ 158 Communication Formats .......................................................................................... 158 Appendix 4 ................................................................................................................ 164 Formats for the Calculation of the Service Level ................................................... 164 Appendix 5 ................................................................................................................ 171 Format for the Calculation of the Global Service Levels (Individual Subsections and the entire Concession) ...................................................................................... 171 Appendix 6 ................................................................................................................ 173 Global Service Levels Required (by Individual Subsections and the entire Concession) .............................................................................................................. 173 Appendix 7 ................................................................................................................ 175 Manual for Service Level Survey ............................................................................. 175 Appendix 8 ................................................................................................................ 190 Terms of Reference for the ...................................................................................... 190 Preparation of the Technical and Legal Diagnosis, Plan of Physical and Legal Restructuring and preparation of Individual Property Files .................................. 190 Appendix 9 ................................................................................................................ 206 Condition parameters and Service Levels required in the Subsections that the GRANTOR shall deliver to the CONCESSIONAIRE where no interventions of Rehabilitation and Improvement or Initial Periodic Maintenance shall be executed .................................................................................................................... 206 Appendix 10 .............................................................................................................. 220 Technical information for the supply and installation of ducts and chambers .... 220 Appendix 11 .............................................................................................................. 222 Toll Systems for the standardized operation .......................................................... 222 Appendix 12 .............................................................................................................. 227 Delivery of bridges comprised in the San Clemente – Ayacucho Subsection ..... 227 ANNEX II .................................................................................................................... 228 REFERENTIAL MODEL OF DECLARATION OF ALLOWED CREDITOR ................ 228 ANNEX III ................................................................................................................... 229 PERFORMANCE BOND OF THE CONCESSION CONTRACT ................................. 229 ANNEX IV-A ............................................................................................................... 230 PERFORMANCE BOND OF EXECUTION OF REHABILITATION AND IMPROVEMENT ......................................................................................................... 230 ANNEX IV-B ............................................................................................................... 231


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PERFORMANCE BOND OF EXECUTION OF INITIAL PERIODIC MAINTENANCE . 231 ANNEX V .................................................................................................................... 232 NOTARIAL CERTIFICATE OF THE ARTICLES OF INCORPORATION AND STATUTE OF THE CONCESSIONAIRE ..................................................................................... 232 ANNEX VI ................................................................................................................... 233 POWER OF ATTORNEY OF THE LEGAL REPRESENTATIVE OF THE CONCESSIONAIRE ................................................................................................... 233 ANNEX VII .................................................................................................................. 234 ECONOMIC PROPOSAL ........................................................................................... 234 ANNEX VIII ................................................................................................................. 235 VEHICLE FLOW MEASUREMENT ............................................................................ 235 ANNEX IX ................................................................................................................... 238 PENALTIES APPLICABLE TO THE CONTRACT ..................................................... 238 Penalties referred to CHAPTER III of the Contract: Events on the Date of Signing of the Contract .............................................................................................................. 238 ANNEX X .................................................................................................................... 243 STUDIES .................................................................................................................... 243 ANNEX XI ................................................................................................................... 244 Appendix 1 ................................................................................................................ 244 Financial Closure ...................................................................................................... 244 Appendix 2 ................................................................................................................ 245 Management Trust .................................................................................................... 245 Cofinancing ............................................................................................................... 249 Appendix 4 ................................................................................................................ 250 Mechanism of provision for activities of Periodic Maintenance ............................ 250 Appendix 5 ................................................................................................................ 252 Rehabilitation and Improvement .............................................................................. 252 Appendix 6 ................................................................................................................ 255 APIPM ........................................................................................................................ 255 Appendix 7 ................................................................................................................ 257 CPIPM ........................................................................................................................ 257 Appendix 8 ................................................................................................................ 261 AMPO ......................................................................................................................... 261 ANNEX XII .................................................................................................................. 263 ACTIVATION AND CONDITIONS FOR COLLECTION AT TOLL UNITS .................. 263


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CONCESSION CONTRACT

Mr. Notary: May it be recorded in your Registry of Public Deeds, one stating the Concession Contract of the Longitudinal de la Sierra Highway Section 4: Huancayo – Izcuchaca – Mayocc - Ayacucho/Ayacucho – Andahuaylas - Puente Sahuinto/Dv. Pisco – Huaytará - Ayacucho, entered into by the State of the Republic of Peru, hereinafter the GRANTOR, acting through the Ministry of Transport and Communications, authorized by Article 7, paragraph 7.1 (e) of Legislative Decree Nº 1224-, with domicile at Jirón Zorritos Nº 1203 Lima, Peru, duly represented by ___________________________, identified with National Identity Card DNI Nº ___________, duly authorized by Ministerial Resolution Nº _______ dated _______, and by _____________________________, hereinafter the CONCESSIONAIRE, with domicile at _________________________________, duly represented by ___________________________, identified with National Identity Card DNI Nº __________________________, with domicile at _____________________________, duly authorized for the purpose by__________________. CHAPTER I: BACKGROUND AND DEFINITIONS Background 1.1 Official Letter Nº 0128-2012-MTC/01 received on September 24, 2012, by

which the Ministry of Transport and Communications (hereinafter MTC), requests PROINVERSIÓN to incorporate the Longitudinal de la Sierra, Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho, Ayacucho-Andahuaylas-Pte Sahuinto project to the private investment promotion process.

1.2 Meeting of March 27, 2013, where the Steering Council of PROINVERSIÓN

agreed to incorporate the Longitudinal de la Sierra Highway Section 4, to the private investment promotion process and assigned PROINVERSIÓN Committee in Road Infrastructure Projects, Railway Infrastructure and Airport Infrastructure -PRO INTEGRACIÓN the management of the corresponding process.

1.3 Steering Council Agreement Nº 641-2014-CPI dated November 17, 2014,

through which the modification of the incorporation agreement is approved. 1.4 Supreme Resolution Nº 001-2015-EF, published on January 6, 2015 related

to the incorporation of the project into the private investment promotion process.

1.5 Steering Council Agreement dated January 26, 2015 approving the Private

Investment Promotion Plan for the concession of the Longitudinal de la Sierra Highway Section 4: Huancayo – Izcuchaca – Mayocc - Ayacucho/Ayacucho – Andahuaylas - Puente Sahuinto/Dv. Pisco – Huaytará – Ayacucho to the private sector. Agreement published on January 30, 2015 in the official newspaper El Peruano.

1.6 Steering Council Agreement dated February 16, 2015 approving the Bidding

Terms and Conditions of the comprehensive projects bid for the concession of the Longitudinal de la Sierra Highway Section 4: Huancayo – Izcuchaca –


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Mayocc - Ayacucho/Ayacucho – Andahuaylas - Puente Sahuinto/Dv. Pisco – Huaytará – Ayacucho to the private sector.

1.7 Call for the Comprehensive Projects Bid for the Concession of the Longitudinal

de la Sierra Highway Section 4: Huancayo – Izcuchaca – Mayocc - Ayacucho/Ayacucho – Andahuaylas - Puente Sahuinto/Dv. Pisco – Huaytará – Ayacucho, published in the newspapers El Peruano, El Comercio and Peru21, on February 22 and 23, 2015; and publication of the Bidding Terms and Conditions in the webpage of PROINVERSIÓN.

1.8 Meeting of ___ _____, _____, where the Steering Council of PROINVERSIÓN

approved the Final Version of the Longitudinal de la Sierra Highway Concession Contract Section 4: Huancayo – Izcuchaca – Mayocc - Ayacucho/Ayacucho – Andahuaylas - Puente Sahuinto/Dv. Pisco – Huaytará - Ayacucho, to be entered into by the Republic of Peru, represented by the Ministry of Transport and Communications and the CONCESSIONAIRE.

1.9 PROINVERSIÓN Committee in Road Infrastructure Projects, Railway

Infrastructure and Airport Infrastructure -PRO INTEGRACIÓN, on ___ ____, _____, awarded the Comprehensive Projects Bid for the Concession of the Longitudinal de la Sierra Highway Section 4: Huancayo – Izcuchaca – Mayocc - Ayacucho/Ayacucho – Andahuaylas - Puente Sahuinto/Dv. Pisco – Huaytará - Ayacucho to the Bidder ___________________, whose members have formed the CONCESSIONAIRE, who has demonstrated compliance with the conditions foreseen in the Bidding Terms and Conditions to sign this Contract.

1.10 Ministerial Resolution Nº _________ dated ______ __, _____ that authorizes

Mr. _________________ ______ _________ ________ __________________ _______ to sign this Concession Contract on behalf of the Ministry of Transport and Communications.

Definitions 1.11 In this Contract, the following terms shall have the meanings set out below: 1.11.1 Allowed Creditors

The concept of Allowed Creditors is applicable only for the assumptions of Allowed Guaranteed Indebtedness. Allowed Creditors shall be authorized by the GRANTOR to demonstrate such condition, complying with the prior submission of ANNEX II of this Contract to the GRANTOR for approval. For such purposes, the Allowed Creditor shall be: a) Any multilateral credit institution of which the State of the Republic of Peru

is a member. b) Any institution or any governmental agency from any country with which

the State of the Republic of Peru maintains diplomatic relations. c) Any financial institution approved by the State of the Republic of Peru and

listed as First Class Foreign Bank in Circular Nº 036-2015-BCRP published in the Official Newspaper El Peruano on September 23, 2015, issued by the Banco Central de Reserva del Perú or in any other circular that may amend or replace it.

d) Any other international financial institution with a risk classification not lower than the Peruvian sovereign debt rating corresponding to long-term foreign currency, assigned by an international credit rating agency that rates the Republic of Peru.


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e) Any national financial institution with a local risk rating not lower than “A” assigned by a national credit rating company duly authorized by the Superintendence of Securities (Superintendencia de Mercado de Valores, SMV).

f) All institutional investors considered as such by the legal regulations applicable in Peru or in their country of origin, that directly or indirectly acquire any kind of transferable security or debt instrument issued, through public or private offering, by (i) the CONCESSIONAIRE, or (ii) trust property, investment fund or securitization company organized in Peru or abroad that acquires rights and/or assets derived from the Concession Contract.

Only in the case of structuring such transactions, the representative of the bondholders acting on behalf of the future natural or legal persons that will acquire such securities or instruments shall temporarily be classified as Allowed Creditor and shall initially be responsible for submitting ANNEX II. Such classification shall be extinguished with the corresponding financial investment and therefore replacement of ANNEX II shall take place, which will be signed by the purchasers of the respective transferable security or debt instrument, or representatives thereof according to the powers issued by the acquirers in favor of these, pursuant to the Applicable Laws and Regulations; it may be noted that this action is of an administrative nature and confers no Allowed Creditor classification to representatives.

g) Any natural or legal person that directly or indirectly acquires any kind of transferable security or debt instrument issued by the CONCESSIONAIRE through public or private offering, or through trust property, investment funds or securitization company organized in Peru or abroad.

Allowed creditors shall not have economic link with the CONCESSIONAIRE, as provided for in CONASEV Resolution Nº 090-2005-EF-94.10, amended by CONASEV Resolution Nº 005-2006-EF/94.10 or regulation replacing it. In case of syndicated loans, the Allowed Creditors may be represented by an Administrator or Security Agent. For such purposes, the following is considered: • Security Agent: Specialized person, whose role shall be to manage the

security contracts that the CONCESSIONAIRE has granted in support of the Allowed Guaranteed Indebtedness operations, execute guarantees by order and on behalf of the Allowed Creditors, and recover the amounts of the execution to be distributed among the Allowed Creditors.

• Administrator: Specialized person, whose function shall be to manage and follow up the compliance with the obligations and commitments set forth in the Allowed Guaranteed Indebtedness contract; and to represent the Allowed Creditors.

1.11.2 Certificate of Acceptance

Document signed by the Acceptance Committee through which the acceptance of the Rehabilitation and Improvement or Initial Periodic Maintenance is recorded, according to the requirements of the Contract. This document shall include the date on which the Acceptance Committee approved the Rehabilitation and Improvement or Initial Periodic Maintenance


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executed. The results of the measurements made shall be annexed to this certificate.

1.11.3 Comprehensive Certificate of Delivery of Assets

Document signed by the GRANTOR and the CONCESSIONAIRE, by which it is stated that the CONCESSIONAIRE has taken possession of all the Concession Assets in the condition in which they are found, and they will be used for the execution of the Contract.

1.11.4 Certificate of Partial Delivery of Assets Certificate made by the GRANTOR as the Concession Assets are being delivered to the CONCESSIONAIRE, which as a whole are part or constitute the Comprehensive Certificate of Delivery of Assets. The first Certificate of Partial Delivery of Assets received by the CONCESSIONAIRE before the start of the Exploitation shall necessarily include the delivery of existing toll units. This certificate shall include as observations the interferences existing in the Section, Subsection or in the delivered assets.

1.11.5 Certificate of Reversion of Assets Document signed by the GRANTOR and the CONCESSIONAIRE that records the delivery in favor of the GRANTOR of the Concession Assets when the following situations mainly occur: a) Termination of the Concession, b) delivery to the GRANTOR of the sections of the Concession Area that are no longer exploited by the CONCESSIONAIRE or c) delivery of obsolete or outdated assets that does not allow the Contract objectives to be met and that shall be replaced by the CONCESSIONAIRE, under the provisions of Clause 5.20.

1.11.6 Successful Bidder Bidder who is granted the Award.

1.11.7 Private Investment Promotion Agency – PROINVERSIÓN Body referred to in Law Nº 28660 and the Regulation of Organization and Functions of PROINVERSIÓN approved by Ministerial Resolution Nº 083-2013-EF/10, and its amendments; responsible, among other things, for promoting the private investments in public works of infrastructure and public services that may be granted in concession to the private sector in accordance with the Applicable Laws and Regulations.

1.11.8 Calendar Year Period between January 1 and December 31 of each year, both dates inclusive.

1.11.9 Concession Year Annual period calculated between the Date of Signing of the Contract, counted from date to date, ending on a day equal to the day of the year in which the calculation started.

1.11.10 Concession Area Strip of land in the public domain located within the Right of Way, which on the date of Takeover is not occupied or invaded, to be delivered to the CONCESSIONAIRE for the execution of the Rehabilitation and Improvement, Initial Periodic Maintenance and Exploitation of the road infrastructure. The


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Concession Area shall be gradually increased until reaching the Right of Way, upon completion of the accountability procedures of the GRANTOR for the acquisition and expropriation of land, as appropriate.

1.11.11 Area of Optional Services Area located within the Right of Way set up in the vicinity of the roadway with access from and to the track, and that consists of land that may be occupied by the facilities intended to provide the agreed Optional Services referred to in Clause 8.13 of the Contract.

1.11.12 Competent Environmental Authority The Ministry of Transport and Communications, through the General Directorate of Social Environmental Issues – DGASA or the entity that, within the framework of the National Environmental Impact Assessment replaces it in the performance of its functions.

1.11.13 Government Authority Any government or national, regional or municipal authority, or any of its departments or agencies, regulatory or administrative, or any entity or agency of the State of the Republic of Peru that according to law exercises executive, legislative or judicial Powers, or that belongs to any of the abovementioned governments, authorities and institutions.

1.11.14 Bidding Terms and Conditions Public document containing the administrative aspects, procedures and conditions, including its ANNEXES, Forms and Appendices and the Circulars issued by PROINVERSIÓN Committee in Road Infrastructure Projects, Railway Infrastructure and Airport Infrastructure -PRO INTEGRACIÓN, setting the terms under which the Bid will be developed. The Bidding Terms and Conditions are part of the Contract.

1.11.15 Concession Assets Real or personal property that is incorporated in the Concession or affected by the same or is inseparable from the Concession object, and which: was delivered by the GRANTOR at the start or during the Concession, or replaced other assets, or was acquired or built by the CONCESSIONAIRE during the term of the same. These assets are owned by the GRANTOR and shall be returned and/or delivered to it by the CONCESSIONAIRE, at the end of the Concession.

1.11.16 CONCESSIONAIRE Assets

All the assets constructed, acquired or implemented by the CONCESSIONAIRE that are subject to the rules of the Contract and are different from the Concession Assets and that upon the termination of the Concession will remain the property of the CONCESSIONAIRE.

1.11.17 Termination of the Concession or Termination Expiration of the Concession on the grounds set forth in CHAPTER XVI of the Contract.

1.11.18 Roadway Part of the highway intended for the circulation of vehicles, excluding the berm.


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1.11.19 Acceptance Committee Committee appointed by the GRANTOR and that shall act on its behalf for the acceptance of the Rehabilitation and Improvement and Initial Periodic Maintenance, as specified in CHAPTER VI.

1.11.20 Co-financing Amount to be paid by the GRANTOR to the CONCESSIONAIRE for the Rehabilitation and Improvement, for the Initial Periodic Maintenance, and for the Operation and Maintenance, discounting toll collection less the provision of Road Emergencies and less penalties.

1.11.21 GRANTOR The State of the Republic of Peru, represented by the Ministry of Transport and Communications (MTC).

1.11.22 Concession

Public Law judicial relationship established between the GRANTOR and the CONCESSIONAIRE as from the Date of Signing of the Contract, by means of which the GRANTOR grants the CONCESSIONAIRE the right to exploit the Concession Assets, and therefore it is obliged to execute the Rehabilitation and Improvement, the Initial Periodic Maintenance, conserve such assets and provide a range of services for users of the Longitudinal de la Sierra Highway Section 4: Huancayo – Izcuchaca – Mayocc - Ayacucho/Ayacucho – Andahuaylas - Puente Sahuinto/Dv. Pisco – Huaytará - Ayacucho, as set forth in this Concession Contract and subject to the provisions of the Applicable Laws and Regulations.

1.11.23 CONCESSIONAIRE

Legal person incorporated by the Successful Bidder, who signs the Concession Contract with the GRANTOR.

1.11.24 Bid Process regulated by the Bidding Terms and Conditions for the award of the Concession of the Longitudinal de la Sierra Highway Section 4: Huancayo – Izcuchaca – Mayocc - Ayacucho/Ayacucho – Andahuaylas - Puente Sahuinto/Dv. Pisco – Huaytará – Ayacucho to the private sector.

1.11.25 Conservation or Maintenance

Set of activities performed after the Takeover intended to preserve, recover or delay the loss of the structural and functional conditions of the Concession Assets.

1.11.26 Road Conservation or Road Maintenance

Set of technical activities intended to preserve on a continuous and sustained basis, the good condition of road infrastructure, to ensure optimal service to the users. It may be of routine or periodic nature.

1.11.27 Periodic Road Conservation or Periodic Road Maintenance

Set of activities programmable every certain period, carried out on roads to retrieve their service conditions. These activities may be manual or mechanical and mainly refer to: i) replacement of wearing courses, repaving, placement of leveling layers, surface treatments and seal, ii) repair or precise reconstruction of lower pavement layers, iii) repair or precise reconstruction of tunnels, walls, drainage works, road safety features and signaling elements, iv) repair or precise reconstruction of the highway platform that may include


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specific drainage works and works that contribute to the stability thereof, and v) repair or precise reconstruction of bridge components, both from the superstructure and the substructure.

1.11.28 Routine Road Conservation or Routine Road Maintenance Set of activities carried out on the roads on a permanent basis to maintain their service levels. These activities may be manual or mechanical and mainly refer to cleaning, patching, profiling, friction, removing of small-scale landslides, as well as cleaning or repair of expansion joints, support elements, paint and drainage in the superstructure and substructure of the bridges.

1.11.29 Constructor Legal person(s) that will sign with the CONCESSIONAIRE the contract(s) to implement the Rehabilitation and Improvement and the Initial Periodic Maintenance of the Concession.

1.11.30 Concession Contract or Contract Refers to this Contract, including its ANNEXES and Appendices, entered into between the GRANTOR and the CONCESSIONAIRE, which governs the relationship between the Parties during the term of concession of the Longitudinal de la Sierra Highway Section 4: Huancayo – Izcuchaca – Mayocc - Ayacucho/Ayacucho – Andahuaylas - Puente Sahuinto/Dv. Pisco – Huaytará - Ayacucho.

1.11.31 Effective Control A person has the Effective Control of another company in the following cases:

a) Has more than fifty percent (50%) of the voting power in the general

meetings of shareholders or partners, through direct ownership of securities representing the social capital, or indirectly by contract of usufruct, pledge, trust, syndication and the like or any other legal act; or,

b) Directly or indirectly has the power to appoint or remove the majority of

the members of the board of directors or equivalent body, allowing it to control or exercise the majority of votes in the meetings of the board of directors or equivalent body, or to govern the operational or financial policies under a regulation or contract, whatever its form; or,

c) By any other mechanism or circumstance (contractual or otherwise),

effectively controls the decision power in the other company. In addition to the aforementioned and provided it is applicable, the determination of the effective control shall take into account the provisions of CONASEV Resolution Nº 090-2005-EF-94.10, amended by CONASEV Resolution Nº 005-2006-EF/94.10, its amendments or regulation replacing it.

1.11.32 Right of Way Strip of land including the highway, its complementary works, services, areas planned for future expansion or improvement works, and safety zones for the user. Its width is set forth by Ministerial Resolution.

1.11.33 Day Business days, i.e. days other than Saturdays, Sundays or non-working holidays in the City of Lima. Days when banks in the City of Lima are not obliged to be opened to the public as established by the Government Authority are also deemed holidays, as well as the regional non-working holidays.


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1.11.34 Calendar Day

All days, including Saturdays, Sundays and holidays.

1.11.35 Dollar or American Dollar or US$

The currency or monetary unit of legal tender in the United States of America. 1.11.36 Road Emergency

Unforeseen damage experienced by the road caused by forces of nature or human intervention that hinders or prevents passage of the road users (transitability). The following is considered a Road Emergency: landslides, platform erosion, platform subsidence, damage of bridge structure, flash floods and snowfall.

1.11.37 Affiliated, Parent, Subsidiary or Related Company: The definitions are as follows: a) Affiliated Company: A company shall be considered as affiliated to

another company when the Effective Control of such companies is exercised by the same Parent Company.

b) Parent Company: Company that has the Effective Control of another

company. This definition also includes a company having the Effective Control of a Parent Company, as it has been defined, and so forth.

c) Subsidiary Company: Company whose Effective Control is exercised by

another company. d) Related Company: Any Affiliated, Parent or Subsidiary Company. In addition to the aforementioned and provided it is applicable to determine the indicated definitions, CONASEV Resolution Nº090-2005-EF-94.10 shall be also applied, as well as its amendments or regulation replacing it.

1.11.38 Banking Company

Company defined as such in accordance with Law Nº 26702, General Law of the Financial System and Insurance System and Organic Law of the Superintendence of Banking and Insurance, referred to in the Bidding Terms and Conditions.

1.11.39 Allowed Guaranteed Indebtedness Consists of the indebtedness arising from financing or credit operations, issue of transferable securities or debt instruments and/or loan of money from any Allowed Creditor in any form, whose funds shall be intended to fulfill the object of this Contract, including any renewal, rescheduling or refinancing of such indebtedness that is guaranteed. Financing or credit operations, issue of transferable securities or debt instruments and/or loan of money whose funds are intended to finance the CONCESSIONAIRE Assets shall not be considered Allowed Guaranteed Indebtedness.

1.11.40 Social Environmental Specifications Organized compilation of the regulations in force, general and specific, related to the requirements regarding the protection and conservation of the environment, applicable in all the Concession stages.


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1.11.41 Environmental Management Instrument (EMI) The environmental management instruments or environmental studies of application of the SEIA are: the Environmental Impact Statement (EIS), the Semi detailed Environmental Impact Assessment (EIA-sd), the Detailed Environmental Impact Assessment (EIA d), and other environmental assessment determined by the Competent Environmental Authority.

1.11.42 Final Engineering Study (FES) Technical document that establishes the Engineering design details of the road project components. Contains at least the following: (i) Executive Summary, (ii) Descriptive Memory, (iii) Metering, (iv) Analysis of unit prices, (v) Budget, (vi) Polynomial Formulas (as applicable), (vii) Schedules, (viii) Technical Specifications, (ix) Basic Studies, (x) Designs, (xi) Maintenance Plan, (xii) Environmental Management Instrument, (xiii) Drawings.

1.11.43 Technical File Set of documents containing: descriptive memory, technical specifications, implementation plans, metering, budget, reference value, price analysis, progress calendars, polynomial formulas, and, if required, soil survey, geological survey, Environmental Management Instrument and other supplementary documents.

1.11.44 Exploitation

Consists of the Road Operation and Maintenance of the Concession Assets, the provision of Mandatory and Optional Services and the collection to Users for the use of road infrastructure and facilities, as well as the provision of such services, under the terms of the Contract.

1.11.45 End date of the Concession Corresponds to the same date of the Date of Signing of the Contract, 25 years later, or upon the termination of the extension, if occurred, or when Termination has occurred for a different reason.

1.11.46 Start Date of Exploitation Date when activities for the operation and/or conservation of the Concession Assets start, in accordance with the provisions of Clause 8.10.

1.11.47 Date of Signing of the Contract Date when the Concession Contract is signed between the GRANTOR and the CONCESSIONAIRE.

1.11.48 Management Trust Fund set up at the risk of the CONCESSIONAIRE, whose equity shall be made up of toll revenues, the resources from Co-financing and the penalties established in ANNEX IX. Its objective shall be the management of these resources to ensure the appropriate and timely compliance with the obligations under this Contract. Its operation is detailed in ANNEX XI.

1.11.49 FONCEPRI Fund for the Promotion of Private Investment in public Works of Infrastructure and Public Services -FONCEPRI-, referred to in Article 11º of Supreme Decree Nº 059-96-PCM, which does not apply in this Concession pursuant to the applicable laws.


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1.11.50 Guarantee The term Guarantee includes the guarantees granted by banking companies, international financial entities or insurance companies, including the letter of guarantee and the standby letter of credit.

1.11.51 Performance Bond of Execution of Rehabilitation and Improvement Bond granted to ensure the correct Rehabilitation and Improvement, including the payment of penalties and other sanctions, as provided for in Clause 11.2.

1.11.52 Performance Bond of Execution of Initial Periodic Maintenance Bond granted to ensure the correct Initial Periodic Maintenance, including the payment of penalties and other sanctions, as provided for in Clause 11.2

1.11.53 Performance Bond of the Concession Contract Bond granted to ensure compliance with each and every one of the obligations of the CONCESSIONAIRE, including Exploitation and the payment of penalties not guaranteed by the Performance Bond of Execution of Rehabilitation and Improvement and the Performance Bond of Execution of Initial Periodic Maintenance, as provided for in Clause 11.6.

1.11.54 IGV (VAT) General Sales Tax referred to in Supreme Decree Nº 055-99-EF, Consolidated Text of the Law on the General Sales Tax and Selective Excise Tax, or regulation replacing it, as well as the Municipal Promotion Tax referred to in Supreme Decree Nº 156-2004-EF, Consolidated Text of the Law on Municipal Taxation, or regulations replacing them.

1.11.55 Progress Report Document to be submitted on a monthly basis by the CONCESSIONAIRE to the REGULATOR, pursuant to the provisions established by the latter in this regard, and by which the execution of Rehabilitation and Improvement and the Initial Periodic Maintenance shall be recorded, indicating the invested amount and the progress percentages for each item of the budget approved in the Final Engineering Studies and Environmental Management Instrument and Technical Files for the Rehabilitation and Improvement and the Initial Periodic Maintenance, respectively.

1.11.56 Inventories These are the Initial, Rehabilitation and Improvement, Initial Periodic Maintenance, Annual and Final Inventories.

1.11.57 Applicable Laws and Regulations Set of general Peruvian legal provisions governing the Contract. It includes the Political Constitution of Peru, the rules with the force of law, the regulations, directives and resolutions that any competent Government Authority may dictate in accordance with its creation law, among which are the Regulatory Rules, which shall be binding upon the Parties.

1.11.58 LIBOR London InterBank Offered Rate at one (1) year, informed by the daily Reuters Cable received in Lima at 11.00 a.m.

1.11.59 Maintenance See Conservation


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1.11.60 Initial Periodic Maintenance Works to be executed in the existing road during the first years of the Concession, in order to reach and/or exceed the Service Levels required in ANNEX I of the Contract.

1.11.61 Improvement Execution of the works required to raise the road standard through activities involving the substantial modification of the pavement geometry and structure; as well as the construction and/or adaptation of bridges, tunnels, drainage works, walls and required signaling.

1.11.62 MTC Ministry of Transport and Communications, acting on behalf of the State of the Republic of Peru as GRANTOR.

1.11.63 Service Levels Indicators that qualify and quantify the status of service of a road and that are generally used as permissible limits in their surface, functional, structural and security condition. The CONCESSIONAIRE shall meet the indicators included in ANNEX I of the Concession Contract, which will be used as assessment elements by the REGULATOR.

1.11.64 Regulatory Rules Regulations, directives and resolutions that the REGULATOR may dictate in accordance with its creation law, and which compliance is binding upon the CONCESSIONAIRE.

1.11.65 Works

Road infrastructure executed within a working area, based on an approved Technical File, mainly using resources such as labor force, materials and equipment.

1.11.66 Additional Works Works not included in the Final Engineering Studies or in the Technical Files, or in the Contract, whose completion is essential and/or necessary to reach the goal expected for the main works. In no case such works originate from the reduction of the Service Levels and/or other causes attributable to the CONCESSIONAIRE. The execution and Maintenance of the Additional Works shall be subject to the provisions of Clauses 6.30 to 6.39 of the Contract.

1.11.67 Operation

Set of activities to be performed for the normal operation of the road. It includes the Concession management , care and monitoring of the road, control of loads and vehicular weights, road safety and prevention of Road Emergencies.

1.11.68 Payment of the GRANTOR a) Annual Payment for Maintenance and Operation (APMO)

Annual amount of money expressed in Dollars, that the State of the Republic of Peru shall pay to the CONCESSIONAIRE, in accordance with its Economic Proposal, intended to cover the operation and maintenance costs of the Concession, subject to the terms and conditions of the


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Contract. The payment procedure and frequency are regulated in this Concession Contract.

b) Annual Payment for Initial Periodic Maintenance (APIPM)

Annual amount of money expressed in Dollars, that the State of the Republic of Peru shall pay to the CONCESSIONAIRE, in accordance with its Economic Proposal, intended to cover the costs of the Initial Periodic Maintenance, subject to the terms and conditions of the Contract. The payment procedure and frequency are regulated in this Concession Contract.

c) Payment for Rehabilitation and Improvement (PRI)

Amount of money expressed in Dollars, that the State of the Republic of Peru shall pay to the CONCESSIONAIRE, in accordance with its Economic Proposal, intended to cover the costs of Rehabilitation and Improvement. The payment procedure is regulated in this Concession Contract.

1.11.69 Party The GRANTOR or the CONCESSIONAIRE, as the case may be.

1.11.70 Parties

Jointly, the GRANTOR and the CONCESSIONAIRE.

1.11.71 Minimum Shareholding Shareholding equivalent to thirty-five percent (35%) of the subscribed and paid-in social capital of the CONCESSIONAIRE that the Strategic Partner shall have and maintain as a minimum in the CONCESSIONAIRE throughout the term of the Concession. This shareholding shall necessarily have voting power in the General Shareholders’ Meeting.

1.11.72 Toll

Amount paid by the user for the right to use the road infrastructure. It does not include VAT or any other tax.

1.11.73 Concession Term Period between the Date of Signing of the Contract and the Termination of the Concession.

1.11.74 Program of Execution (PE)

Document stating the comprehensive execution scheduling for the Rehabilitation and Improvement or the Initial Periodic Maintenance, and which shall be submitted as indicated in Clauses 6.10 and 6.11 of this Contract.

1.11.75 Regulation of Legislative Decree Nº 1224 Regulation of Legislative Decree Nº 1224, approved by Supreme Decree Nº 410-2015-EF.

1.11.76 Rehabilitation Execution of the works necessary to restore the road infrastructure to its original conditions and to adapt it to a new service period. Such works refer mainly to the repair and/or execution of pavements, bridges, tunnels, drainage works, and if appropriate, earthworks in specific areas and others.


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1.11.77 REGULATOR Supervisory Board of Investment in Public Transportation Infrastructure - OSITRAN, as provided for in Law Nº Nº 26917 and its regulations, complementary norms and amendments and whose provisions (autonomous regulations, general directives and particular norms indicated in Article 22 of the Regulation that approves Supreme Decree Nº 044-2006-PCM), as well as paragraph 3.1 of article 3º of Law Nº 27332, are binding on the CONCESSIONAIRE.

1.11.78 Service Public service to be provided by the CONCESSIONAIRE in the Subsections of the Concession, in accordance with this Contract and the Applicable Laws and Regulations.

1.11.79 Conservation Service Service hired by the Ministry of Transport and Communications, through the corresponding contracts included in ANNEX 8 of the Bidding Terms and Conditions, prior to the Concession.

1.11.80 Mandatory Services Consist of the basic Services related to the specific object of the Concession and that are essential for the correct operation thereof. Such services are included in Clause 8.12 of the Contract.

1.11.81 Optional Services Optional Services are services that are not essential for the operation of the Concession and are not included in Technical File, but may be provided by the CONCESSIONAIRE provided they are useful and contribute to raise the quality and comfort standards of the Service.

1.11.82 Strategic Partner Shareholder or holder of participatory interest of the CONCESSIONAIRE who demonstrate compliance with the operation requirements stated in the Bidding Terms and Conditions, and who holds title of Minimum Participation in the CONCESSIONAIRE.

1.11.83 Subsection Component of the Sierra Highway Section 4: Huancayo – Izcuchaca – Mayocc - Ayacucho/Ayacucho – Andahuaylas - Puente Sahuinto/Dv. Pisco – Huaytará - Ayacucho.

1.11.84 Rate Toll amount plus VAT and other tax that may be generated.

1.11.85 Differentiated Rate Special rate granted by the MTC according to the applicable criteria and procedures.

1.11.86 Rate of Cost of Debt Corresponds to the annual internal rate of return of the debt flows of the CONCESSIONAIRE.

1.11.87 Exchange Rate Average of the weighted exchange rate for the purchase and sale of American Dollars of the Financial System, periodically published by the Superintendence of Banking, Insurance and AFP and published in the Official Newspaper “El Peruano” for the conversion of soles to American Dollars and vice versa.


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1.11.88 Takeover Act by which the CONCESSIONAIRE takes over partially or wholly of the concession Area and the Concession Assets to be used for the execution of the Contract, and which is recorded in the Certificate of Partial Delivery of Assets. Takeover is verified a set forth in Clauses 5.14 to 5.17 of the Contract.

1.11.89 Passage State of the road infrastructure that allows the continuous circulation of all kind of vehicles.

1.11.90 Legislative Decree Nº 1224 Legislative Decree of the Framework of Promotion of Private Investment through Public-Private Partnerships and Asset Projects.

1.11.91 UIT Taxation Unit in accordance with Regulation XV of the Preliminary Title of the Consolidated Text of the Tax Code, approved by Supreme Decree Nº 133-2013EF or the regulation replacing it. This Contract shall consider the value in force at the time of its application.

1.11.92 Users Beneficiaries of the Service provided by the CONCESSIONAIRE.

1.11.93 Light Vehicle

Vehicles comprised in categories M1, M2 and N1, and trailers included in categories O1 and O2, as set forth in Supreme Decree Nº 058-2003-MTC or the regulation replacing it.

1.11.94 Heavy Vehicle Vehicles comprised in categories M3, N2, N3 and trailers included in categories O3 and O4, as set forth in Supreme Decree Nº 058-2003-MTC or the regulation replacing it.

For other definitions not included in this contract, contents of the “GLOSSARY OF FREQUENTLY USED TERMS IN ROAD INFRASTRUCTURE PROJECTS”, approved by Directorial Resolution Nº 18-2013-MTC/14 of June 14, 2013 and its amendments shall apply, as appropriate. CHAPTER II: OBJECT, MODALITY AND CHARACTERISTICS

OBJECT 2.1. According to the definition of concession contained in ANNEX (Definitions) of the

Regulation of Decree Nº 1224, the GRANTOR hereby transfers the CONCESSIONAIRE the power to provide the Service to the Users, by granting the use of the Concession Assets during the term of the same. To this end, the CONCESSIONAIRE shall meet the parameters, capacity and other requirements associated to the investment, as well as the Service Levels provided for in this Contract.

The Parties agree that this Contract is agreed at lump sum, (which involves all the obligations of the CONCESSIONAIRE and that are included based on the presented offer: PRI, APIPM and AMPO) except as set forth in the case of Road Emergency, in which case provisions of Paragraph 7.7 shall apply. No readjustments shall be applied to the presented offer, except for those expressly


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foreseen in this Contract. This provision takes precedence over any other that may set forth or allow for a contrary interpretation.

2.2. Activities or services that are part of the Concession and that are therefore the subject of rights and obligations assumed by the Parties are those contained in this Contract.

2.3. Delivery of the Concession Assets made by the GRANTOR to the

CONCESSIONAIRE for their use does not entail transfer of ownership, the same that is held by the State at all times. The CONCESSIONAIRE acquires the Concession right throughout the term of the same.

2.4. Whereas the object of the Concession right is to contribute to the social welfare of the population through an adequate provision of the Service, in the economic conditions and Service Levels set forth in the Concession Contract for a specified time, the dispositions and constitution of rights on the Concession shall be compatible with this nature, and except for the provisions of article 64° of the Legislative Decree Regulation Nº 1224, shall be approved by the GRANTOR, prior opinion of the REGULATOR, as set forth by the Contract and the legal framework in force.

MODALITY

2.5. This Concession Contract is a Co-financed Public-Private Partnership, provided for in Legislative Decree Nº 1224 and its Regulation approved by Supreme Decree Nº 410-2015-EF.

CHARACTERISTICS 2.6. Notwithstanding the multiple activities and provisions its object is divided into, as

described in Clauses 2.1 to 2.4, the Contract is of a unitary nature and responds to a single cause.

2.7. The Contract is principal, of reciprocal provisions, of ongoing nature and continuous execution. On the other hand, and as indicated in Clauses 10.4 to 10.7 of this Contract, one of its main characteristics is that the economic and financial balance of the Parties shall be maintained at all times.

2.8. Considering the public nature of the ownership of the Concession Assets, the Service subject matter of the Contract is governed by the principles of continuity, regularity and non-discrimination.

CHAPTER III: EVENTS ON THE DATE OF SIGNING OF THE CONTRACT CONCESSIONAIRE STATEMENTS

3.1. The CONCESSIONAIRE warrants the GRANTOR that, on the Date of Signing of the Contract, the statements below are true, correct and complete and acknowledges that the signing of the Contract by the GRANTOR is based on them:

a) Incorporation, validity and consent

That the CONCESSIONAIRE (i) is a corporation duly incorporated in Peru in accordance with the Applicable Laws and Regulations; (ii) according to its


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purpose, is duly authorized and able to undertake the obligations that corresponds respectively as a result of the signing of this Contract; and (iii) has met all the requirements necessary to enter into this Contract and to fulfill the commitments included herein.

b) Authorization, signing and effect

That the signing and compliance with this Contract, as well as the fulfillment of the obligations included herein in relation to the CONCESSIONAIRE are comprised within its powers and has been duly authorized by the board of directors or other similar bodies.

That the CONCESSIONAIRE has fully complied with the acts and/or

procedures required in the Bid to authorize the signing of this Contract and comply with the obligations applicable under this Contract this Contract has been duly and validly signed by the CONCESSIONAIRE and is a valid, binding and enforceable obligation for the CONCESSIONAIRE.

That the signing of this Contract is the ratification of all acts carried out and

documents signed by the Legal Representative(s) of the Successful Bidder, including any right or obligations that may correspond according to the Bidding Terms and Conditions, this Contract or the Applicable Laws and Regulations.

That the performance of other acts or procedures by the CONCESSIONAIRE

to authorize the signing and compliance with the obligations applicable under this Contract is not required.

c) Conformation of the CONCESSIONAIRE and its capital The CONCESSIONAIRE states the following:

i) The single social purpose of the CONCESSIONAIRE allows for the provision of the Service and its domicile is based in the Province of Lima.

ii) The CONCESSIONAIRE has a minimum subscribed and paid-in social capital that meets the requirements of paragraph b) in Clause 3.5.

iii) The conformation of the capital of the CONCESSIONAIRE valid on the Date of Signing of the Contract conforms to the provisions of Clause 3.5.

iv) The Strategic Partner is the owner and holder of at least the Minimum Participation.

d) Litigation

That it is not aware or has been formally notified of lawsuits, claims, judgments, arbitration or other legal proceedings in progress, and no statements or decisions of any kind not executed against the CONCESSIONAIRE and/or the Strategic Partner aimed at prohibiting or otherwise prevent or limit compliance with commitments or obligations under this Contract.

e) Contracting

The CONCESSIONAIRE expressly declares and acknowledges that such conditions have been achieved as a result of the Bid.


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That the CONCESSIONAIRE has no obstacles or restrictions (by contract, court, arbitration, legal or otherwise) to enter into contracts with the State in accordance with the Applicable Laws and Regulations or to undertake and meet each and every one of the obligations that correspond or may correspond to it under the Bidding Terms and Conditions, the Technical Proposal, the Economic Proposal and this Contract.

That it is not precluded from contracting as provided for Article 1366 of the Civil Code, Article 18° of Legislative Decree Nº 1224, the Four Final Complementary Provision of the Regulation of the Legislative Decree Nº 1224, and has not been administratively penalized with temporary or permanent disqualification from exercising its rights to contract with the State.

f) Limitation of liability

That the CONCESSIONAIRE has based its decision, including the decision to formulate, determine and submit the Technical Proposal, Economic Proposal and sign this Contract, on its own research, examinations, inspections, visits, interviews and the like.

Consequently, the MTC, PROINVERSIÓN, the advisors and the State of the Republic of Peru or any agency thereof do not guarantee, expressly or implicitly, the entirety, integrity, reliability or truthfulness of the information, verbal or written, furnished for the purposes of, or within the Bid. Therefore, any of the aforementioned parties or their representatives, agents or employees shall not be held liable in any way for the use that may be made of such information or for any inaccuracy, insufficiency, defect, lack of updating or any other cause not expressly provided for in this Clause.

The aforementioned limitation reaches to the widest extent possible, all the information related to the Bid that is effectively known, the information not known, and the information that at some point should have been known, including the possible errors or omissions contained therein, by the MTC, PROINVERSIÓN, the advisors and the el State of the Republic of Peru or any other agency thereof. Likewise, such limitation of liability reaches all the information, whether or not supplied or formulated, directly or indirectly, by any of the aforementioned parties.

The limitation of liability also comprises all the general information furnished by PROINVERSIÓN, marketing documents, as well as that provided through Circulars or any other form of communication, which is acquired during visits to the Data Room and that mentioned in the Bidding Terms and Conditions, including all its Forms, ANNEXES and Appendices.

g) That on the Date of Signing of the Contract, all the information, statements,

certification and in general, all the documents submitted in Envelopes Nº 1 and Nº 2 required in the Bidding Terms and Conditions in the stage of the Bid are in force.

In case that after the signing of the Contract the aforementioned statement is proven false, this Contract shall be automatically terminated, proceeding in accordance with the provisions of CHAPTER XVI of the Contract and executing the Performance Bond of the Concession Contract referred to in Clause 11.6.


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h) That the Minimum Participation of the Strategic Partner, the social statue and the instruments of incorporation of the CONCESSIONAIRE are and shall remain according to the requirements of the Bidding Terms and Conditions.

i) The CONCESSIONAIRE notes that the contracts entered into with third

parties shall not be effective regarding the GRANTOR. j) That the CONCESSIONAIRE, or any of its shareholders, partners or Affiliated

Companies or any of its respective directors, officers, employees, advisors, legal representatives or agents, has paid, received, offered or attempted to pay or receive or offer or attempts to pay or receive or offer in the future no illegal payment or commission related to the Concession, the Contract or the Bid.

3.2. The CONCESSIONAIRE expressly, unconditionally and irrevocably waives to

invoke or exercise any privilege or immunity, diplomatic or otherwise, or claim through diplomatic channels that may be brought by or against the MTC or its departments, PROINVERSIÓN, the advisors, the State or its agencies, under the Applicable Laws and Regulations or under any other legislation that may be applicable, with respect to any obligations that correspond or may correspond to it in accordance with the Bidding Terms and Conditions, the Technical Proposal, the Economic Proposal and this Contract.

3.3. The CONCESSIONAIRE shall preserve confidentiality on the classified

information that with such character may have received by the GRANTOR throughout the Bid, or the information considered confidential in accordance with the Applicable Laws and Regulations. The CONCESSIONAIRE may only disclose such confidential or classified information with the prior written authorization of the GRANTOR.

STATEMENTS OF THE GRANTOR 3.4. The GRANTOR, for its part, warrants the CONCESSIONAIRE, on the Date of

Signing of the Contract, the truthfulness and accuracy of the following statements and acknowledges that the signing of the Contract by the CONCESSIONAIRE is based on them:

a) That it is duly authorized in accordance with the Applicable Laws and

Regulations to act as the GRANTOR in the Contract. The signing of the Contract by the GRANTOR is in accordance with the Applicable Laws and Regulations, and therefore, no other action or proceeding by the GRANTOR or any other government entity is required to authorize the signing of the Contract. This contract has been duly and validly signed by the authorized representative(s) of the GRANTOR and, together with the due authorization and signature by the CONCESSIONAIRE, is a valid and binding obligation for the GRANTOR.

b) That all administrative acts, requirements, demands and obligations

necessary to enter into this Contract and duly comply with the provisions thereof haven been complied with. Likewise, the Bid has been performed in compliance with and observing the Applicable Laws and Regulations.

c) That there are no Applicable Laws and Regulations preventing the

GRANTOR from fulfilling its obligations derived from this Contract. That


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likewise, there are no ongoing demands, complaints, lawsuits, investigations, disputes or proceedings before judicial body, arbitral tribunal or Government Authority that prohibit, oppose to or in any form prevent the signing or compliance with the terms of this Contract by the GRANTOR.

d) That the CONCESSIONAIRE shall have the right to Exploitation from the day

following the signing of the first Certificate of Partial Delivery of Assets, as provided for in Clause 8.10 up to the termination of the Contract, and this right shall only end in the case of Termination of the Concession set forth in CHAPTER XVI of the Contract.

e) That the validity and extent of the provisions in the Contract have been

formulated based on the Applicable Laws and Regulations. f) That any dispute regarding the Termination of the Concession, suspension

or resolution of the Contract shall only be solved according to the provisions of CHAPTER XVIII.

g) That there are no liabilities, obligations or administrative, labor, tax, judicial,

legal or any other contingencies that somehow affect of may affect in the future the Concession, the GRANTOR Assets, or the right of Exploitation. In case of liabilities or contingencies occurring before the Date of Signing of the Contract, they shall be assumed by the GRANTOR, in accordance with the provisions of the Applicable Laws and Regulations, or alternatively it shall be responsible for resolving such situation that may affect the right of Concession granted under this Contract.

h) That in accordance with paragraph 24.2 of Article 24° of Legislative Decree

Nº 1224, the Executive has issued the Supreme Decree by which the guarantee of the State of the Republic of Peru in support of the obligations, statements and warranties or the GRANTOR established in the Concession Contract. This is not a financial guarantee.

OBLIGATIONS OF THE CONCESSIONAIRE ON THE DATE OF SIGNING OF THE CONTRACT 3.5. Upon the Date of Signing of the Contract, the CONCESSIONAIRE shall have

complied with the following:

a) Present the notarial certificate of the articles of incorporation and statute of the CONCESSIONAIRE or where applicable, public deed of increase of social capital and partial modification of the bylaws, with the proof of registration, in order to demonstrate: (i) that it is a company validly incorporated under the laws of the Republic of Peru, having adopted one of the form regulated by the General Corporations Law and according to the Bidding Terms and Conditions. This notarial certificate is attached to this Contract as ANNEX V; and, (ii) has at least the same partners, shareholders or members that were part of the Successful Bidder; the participation of a legal persona that has submitted, directly or indirectly through an Affiliated Company, an economic proposal in the Bid process shall not be allowed in the shareholding structure of the CONCESSIONAIRE.

b) Demonstrate a minimum social capital of Eleven Million One Hundred and Forty-Two Thousand Five Hundred American Dollars (US$ 11’142,500.00) or its equivalent in Soles, which shall be fully subscribed and paid-in.


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Subsequently, before the start of the Initial Periodic Maintenance and/or the Rehabilitation and Improvement, whichever comes first, it shall demonstrate as a minimum an increase of the social capital equivalent to Thirty-Three Million Four Hundred and Twenty-Seven Thousand Five Hundred American Dollars (US$ 33’427,500.00), so from this time, a minimum social capital of Forty-Four Million Five Hundred and Seventy Thousand American Dollars (US$ 44’570,000.00) shall be required, or its equivalent in Soles, which shall be fully subscribed and paid-in, in conformity with the provisions of the General Corporations Law, without prejudice to the fact that upon the end of month twenty-four (24) from the start of the Rehabilitation and Improvement or the Initial Periodic Maintenance, whichever comes later, it shall have paid proportionally and on a semiannual basis, the entire increase of such minimum capital. From month twenty-four (24) of the acceptance of the total Rehabilitation and Improvement and Initial Periodic Maintenance it shall maintain a minimum social capital of Thirty-One Million Two Hundred Thousand American Dollars (US$ 31’200,000.00).

c) Provide a copy of the documents that prove that its competent internal bodies

have approved this Contract and demonstrate the registration in the corresponding registry office of the Powers of the legal representative of the CONCESSIONAIRE that signs the Contract on its behalf.

d) Provide a notarized copy of the entries of the shares’ register book or equivalent document, stating the composition of the shareholding or participations of the CONCESSIONAIRE.

e) Provide the proposal of the insurance policies, in accordance with Clause 12.1 and following.

f) The statute of the CONCESSIONAIRE shall contain at least the following provisions:

i) A restriction on the free transfer, disposal or encumbrance of shares or stocks that represent thirty-five percent (35%) corresponding to the Minimum Participation of the Strategic Partner that demonstrated the operation capacity or requirements during the stage of the Bid in favor of third parties or to any other partner than the Strategic Partner, up to two (02) years after the completion of the Rehabilitation and Improvement and the Initial Periodic Maintenance indicated in Clause 6.1, except for the provision of Paragraph c) of Clause 11.13 regarding the possibility to of taxing the Minimum Participation from the start of the Concession, in order to obtain financing. From that date, the Strategic Partner may transfer, dispose of or encumber such shares or stocks with the prior approval of the GRANTOR, with opinion of the REGULATOR, who shall ensure compliance with the operation requirements set forth in the Bidding Terms and Conditions, in the shortlisting stage, so that during the term of the Contract such requirements are complied with at all times, under grounds of Termination of the Concession. It is understood that during the term of the Concession, the Minimum Participation in the CONCESSIONAIRE shall always be maintained.

ii) That any process of reduction of the social capital, merger, division,

transformation, dissolution or liquidation of the CONCESSIONAIRE


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shall require the prior opinion of the REGULATOR, and the prior authorization from the GRANTOR.

iii) That in case the CONCESSIONAIRE decides to undertake any of the

aforementioned processes, it shall submit to the GRANTOR, the agreement project of the general meeting or equivalent body that may correspond. Such project shall also be submitted to the REGULATOR for prior opinion, which shall be issued within fifteen (15) Days. Once the prior opinion of the REGULATOR has been received, the GRANTOR shall reach a decision regarding the agreement project within thirty (30) Days. If the GRANTOR does not make a statement within the established period, such agreement project shall be understood as not approved.

iv) The CONCESSIONAIRE is a corporation of exclusive purpose, whose

social object is limited to those activities necessary for the execution of the Contract, exclusively consisting of the exercise of the rights and obligations related to the Concession of the Subsections, as well as the provision of Mandatory Services and those Optional Services authorized by the REGULATOR. The social object shall also indicate its quality of CONCESSIONAIRE of the State of the Republic of Peru.

v) That the validity term of the incorporation of the CONCESSIONAIRE

shall be of at least twenty-seven (27) years. Likewise, if opting for a defined term, it shall be noted that, if for any reason the CONCESSIONAIRE requests the extension of the Concession, the validity term of the corporation shall be extended for an additional term equal to or greater than the extended period, in accordance with the provision of Clause 4.3.

vi) That any modification to the construction contracts regarding the technical requirements established in the Bidding Terms and Conditions shall be subject at least to the following: a) contractual modifications shall be made known to the GRANTOR and the REGULATOR; b) modifications involving changes of Constructor(s), as well as the signing of new Construction contracts shall require prior approval of the GRANTOR, which shall require the prior opinion of the REGULATOR for such purpose; c) that in case of change of Constructor, the technical requirements set forth in the Bidding Terms and Conditions shall be complied with, so that during the term of the Contract such requirements are complied with at all times, under grounds of Termination of the Concession.

The restrictions indicated in the paragraph above shall not be applicable to the subcontracting that may be performed by the Constructor.

g) The CONCESSIONAIRE shall deliver the Performance Bond of the

Concession Contract, set forth in Clause 11.6. Such guarantee shall be fully executable, upon the only unilateral requirement of the REGULATOR.

h) The CONCESSIONAIRE shall submit an affidavit of the Strategic Partner

whereby the latter undertakes to comply with all the points detailed in Clause 14.8 of the Contract.


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i) Submit a written commitment for the payment of the amount in favor of PROINVERSIÓN, for the procedure costs of the Concession of the Longitudinal de la Sierra Highway Section 4: Huancayo – Izcuchaca – Mayocc - Ayacucho/Ayacucho – Andahuaylas - Puente Sahuinto/Dv. Pisco – Huaytará - Ayacucho, amounting to One Million Three Hundred and One Thousand Two Hundred and Three American Dollars (US$ 1’301,203.00).

Such payment shall be made no later than thirty (30) Calendar Days following the Date of Signing of the Contract. In case of total or partial default of this payment, regardless of the penalties indicated in Table Nº 1 of ANNEX IX, PROINVERSIÓN may request the REGULATOR the execution of the Performance Bond of the Concession Contract up to the owed amount.

j) Submit a Certificate stating that the CONCESSIONAIRE signing the

Concession Contract, with respect to the company or the Consortium members, as the case may be, is not disqualified to participate in selection processes or to contract with the State, issued by the Supervisory Agency for State Procurement -OSCE and that it has not ceased to be CONCESSIONAIRE for breach of a Concession Contract as indicated in the Bidding Terms and Conditions.

k) Submit an affidavit demonstrating that on the Date of Signing of the

Concession Contract, all the information presented in the Bid through Envelopes Nº 1 and Nº 2 remains valid and is true, in accordance with Form 1 of ANNEX Nº 10 of the Bidding Terms and Conditions.

l) Submit the Management Trust Contract Project, referred to in Appendix

2 of the ANNEX XI of the Concession Contract.

m) Deliver two cashier’s checks in favor of the REGULATOR for the start of the

supervisor contracting process: i) one in the amount of Two Million Five Hundred Thousand American Dollars (US$ 2’500,000.00), which shall be a down payment for the supervision of the Rehabilitation and Improvement; and ii) one in the amount of One Million Five Hundred Thousand American Dollars (US$ 1’500,000.00), which shall be a down payment for the supervision of the Initial Periodic Maintenance.

n) Economic and financial model of the project formulated by the Successful

Bidder for the submission of the Economic Proposal contained in its Envelope Nº 3.

OBLIGATIONS OF THE GRANTOR ON THE DATE OF SIGNING OF THE CONTRACT 3.6. On the Date of Signing of the Contract, the GRANTOR shall comply with the

following:

a) Return the Guarantee of Validity, Validity Term and Seriousness of the

Proposal submitted by the Successful Bidder during the Bid process. b) Deliver to the CONCESSIONAIRE the list of Concession Assets

corresponding to the toll units that shall receive through the Takeover.

c) Deliver to the CONCESSIONAIRE the lists of the Concession Assets,

which shall be submitted as the GRANTOR delivers the corresponding Subsections and which shall be updated at the time of delivery.


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d) Deliver to the CONCESSIONAIRE the list of vehicles that are subject to the regime of Differentiated Rate for each toll unit.

e) Deliver to the CONCESSIONAIRE the following:

(i) A copy of the Supreme Decree published in the Official Newspaper El Peruano, pursuant to the provisions of paragraph 24.2 of Article 24° of Legislative Decree Nº 1224, by virtue of which the Executive shall grant the Concessionaire Corporation the guarantee of the Stage in support of the statements and guarantees of the GRANTOR set forth in this Contract, and,

(ii) A copy of the Security and Guarantees Contract duly signed by the competent Government Authorities, duly dated, in application of the provisions of subparagraph (i) above.

3.7. The provisions set forth in this CHAPTER are a previous requirement so that the

obligations and rights of the GRANTOR and the CONCESSIONAIRE under this Contract are enforceable.

3.8. The Contract shall enter into effect upon its signing date. CHAPTER IV: CONCESSION TERM TERM 4.1. Concession is granted for a period of twenty-five (25) years, starting from the

Date of Signing of the Contract, except for the cases of extension or termination, according to the terms and conditions under this Contract. This contract shall be in force and have full legal effects during the term indicated in the paragraph above, ending by any of the Termination grounds set forth in CHAPTER XVI.

SUSPENSION OF THE CONCESSION TERM 4.2. The Concession Term shall be suspended in the cases foreseen in CHAPTER

XVII of the Contract, provided that the effects of the events causing the suspension are of such magnitude that prevents compliance with all the obligations of the CONCESSIONAIRE. In such case, as provided for in articles 61.3, 62.2 and 62.3 of the Regulations of Legislative Decree Nº 1224 approved by Supreme Decree Nº 410-2015-EF, as well as the Applicable Laws and Regulations amending or replacing it, such suspension gives the right to the CONCESSIONAIRE to request the extension of the Concession term as indicated in the following Clause. Also, when the operation and maintenance of the Concession is suspended, the payment of the AMPO by the GRANTOR corresponding to the suspension period shall also be suspended.

4.3. If in accordance to the provisions of the previous Clause the CONCESSIONAIRE

considers a request for the extension of the Concession Term should be submitted, it shall be made with the due justification, addressing the GRANTOR, with a copy for the REGULATOR and according to the provisions of Clauses 4.4 to 4.5.

4.4. The Concession term may be extended by the GRANTOR, with the prior favorable opinion by the REGULATOR.


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4.5. Once the request has been submitted by the CONCESSIONAIRE, the

REGULATOR shall issue an opinion within twenty (20) Days of the date of receipt of such request. Likewise, the GRANTOR shall have up to twenty (20) Days to issue its opinion, from the date the opinion of the REGULATOR has been received or when the deadline for expressing its opinion has passed and no opinion has been issued. Whatever the pronouncement of the GRANTOR, it shall be duly supported.

EXTENSION OF THE CONCESSION TERM

4.6. In cases different to those provided for in CHAPTER XVII of the Concession

Contract, the request of the CONCESSIONAIRE shall be submitted no later than three (3) years prior to the expiration of the Concession term and subjected to the provisions of CHAPTER XIX of this Contract. In such cases, the GRANTOR shall take into account any change in the material, technological and economic conditions, under which the provision of the services is carried out, in order to determine if an additional period should be granted or if applicable, a new invitation to bid should be organized, considering the value for money and competition principles, as well as other conditions provided for under this Contract or in the Applicable Laws and Regulations. The extension of the term shall be formalized through an addendum.

4.7. The GRANTOR reserves the right to revise the economic and financial conditions under which it may accept the extension of the Concession, as well as request the opinion of the competent public entities according to the procedure of contractual modifications set forth in Legislative Decree Nº 1224 and its Regulation approved by Supreme Decree Nº 410-2015-EF and the Applicable Laws and Regulations amending or replacing them.

4.8. In no case the term of the Concession, added to the term of any extension granted may exceed the maximum term established in Legislative Decree Nº 1224.

4.9. The decision of the GRANTOR about the request of the extension of the Concession Term may be subject matter of challenge by the CONCESSIONAIRE.


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CHAPTER V: PROPERTY REGIME GENERAL PROVISIONS 5.1. This CHAPTER regulates the aspects related to the Concession Assets and the

CONCESSIONAIRE Assets. 5.2. The Concession Assets are only affected to the purpose of the Concession. It

may not be transferred separately of the Concession, nor be mortgaged, delivered in guarantee or in general, encumbered without the authorization of the GRANTOR and in accordance with the Applicable Laws and Regulations. Once the Rehabilitation and Improvement and the Initial Periodic Maintenance have been executed, they shall be incorporate to the Concession through the procedure indicated in the Regulation of Addition and Removals of OSITRAN. (Resolution of the Steering Council Nº 006-2006-CD-OSITRAN or norm replacing it)

5.3. During the validity of the Concession, the CONCESSIONAIRE has over the Concession Assets the exclusive rights binding to third parties granted by this Contract.

The GRANTOR declares and warrants that for each Takeover, the GRANTOR Assets shall be free from any (i) charge, encumbrance or law; as well as free from occupants or any restrictions that may affect the normal performance of the Rehabilitation and Improvement and/or Initial Periodic Maintenance or the future Exploitation, (ii) seizure, judicial, extrajudicial or administrative measure that may limit, prevent or affect its normal use for the purposes of the Contract; and the GRANTOR is responsible for the physical and legal restructuring that may be applicable, either by eviction and/or own volition of the GRANTOR. For the purposes of the restructuring obligation by the GRANTOR, the CONCESSIONAIRE shall notify the former about the existence of the own volition of the GRANTOR, within fifteen (15) Calendar Days of being aware of it. Upon receipt of the notification referred to in the previous paragraph, the GRANTOR assumes the obligation to restructure such situation, which shall be executed within sixty (60) Calendar Days. Any delay or adverse effect generated in the activities of the CONCESSIONAIRE as a result of the event giving rise to the restructuring obligation mentioned above, shall give it the right of suspension of the obligations of the CONCESSIONAIRE affected by said event for the period of delay in case such delay or adverse effect affects the compliance with the obligations of the CONCESSIONAIRE, following the procedure indicated in Clause 17.1 and following.

5.4. The CONCESSIONAIRE shall have the right of exclusive use and Exploitation of the Concession Assets, as well as the exercise of the rights that are necessary to comply with its obligations under the Contract and the Applicable Laws and Regulations.

5.5. The GRANTOR undertakes not to exercise acts of disposition on the Concession Assets, or to constitute charges or levies thereon during the term of the Concession.

5.6. From the Date of Signing of the Contract up to the Takeover, the GRANTOR Assets shall be managed by it, or by the person it appoints. However, in no case,


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the GRANTOR or the third party appointed to manage such assets may perform acts that affect in any way the rights assumed by the CONCESSIONAIRE by virtue of the Contract.

LAND AREAS COMPRISED IN THE CONCESSION AREA AND RIGHT OF WAY

5.7. The GRANTOR is obliged to put at the disposal of the CONCESSIONAIRE the land area of the Concession Area within the periods referred to in Clause 5.10.

5.8. After receiving the Concession Assets, this shall be of exclusive use of the Concession during the term thereof as indicated in the Applicable Laws and Regulations. Any use in the benefit of the CONCESSIONAIRE other than the use mentioned above shall have the authorization of the GRANTOR, prior opinion of the REGULATOR.

5.9. The CONCESSIONAIRE may request the use of eventual remaining lands resulting from the original expropriations made for the acquisition of the Right of Way, if any, and that are not part of the Concession Assets, provided it has complied with the implementation of the Mandatory Services referred to in Clause 8.12.

The authorization for the use of these remaining lands shall be granted by the GRANTOR, prior opinion of the REGULATOR, and without prejudice of the provisions set forth in Clause 8.13 regarding Optional Services.


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DELIVERY OF THE CONCESSION AREA

5.10. The land areas corresponding to the Concession Area shall be delivered by the GRANTOR to the CONCESSIONAIRE, within the following deadlines:

Toll unit Delivery deadline

Existing toll units Within 30 Calendar Days of the Date of Signing of the Contract

Subsection Delivery deadline

Dv. Huancayo – Pte. Chanchas Up to 5 years from the Date of Signing of the Contract

Pte. Chanchas - Huayucachi Up to 5 years from the Date of Signing of the Contract

Huayucachi - Imperial Up to 5 years from the Date of Signing of the Contract

Imperial - Izcuchaca Up to 5 years from the Date of Signing of the Contract

Izcuchaca - Mayocc Within 60 Calendar Days of the Date of Signing of the Contract

Mayocc - Huanta Within 60 Calendar Days of the Date of Signing of the Contract

Huanta - Ayacucho (Emp PE-28A) Within 60 Calendar Days of the Date of Signing of the Contract

Ayacucho (Emp PE-28A) - Km. 0+000 (Ayacucho)

Responsibility of the GRANTOR

Km. 0+000 (Ayacucho) - Abra Tocto

Within 60 Calendar Days of the Date of Signing of the Contract

Abra Tocto - Ocros Up to 4 years from the Date of Signing of the Contract

Ocros - Chincheros Up to 4 years from the Date of Signing of the Contract

Chincheros - Santa María de Chicmo

Up to 4 years from the Date of Signing of the Contract

Santa María de Chicmo - Andahuaylas (Emp PE-30B)


Andahuaylas (Emp PE-30B) - Dv. Kishuara (Emp PE-3SE)


Dv. Kishuara (Emp PE-3SE) - Dv. Sahuinto (Emp PE-3S)


Dv. Sahuinto (Emp PE-3S) - Puente Sahuinto


San Clemente (Emp. PE-1S) - Puente Choclococha


Puente Choclococha - Ayacucho (Emp. PE-28A)


Appendix 9 of ANNEX I details the Subsections that shall be intervened by the GRANTOR, before their delivery to the CONCESSIONAIRE, as well as the Service Levels to be complied with by these Subsections for delivery. The delivery deadlines of the Subsections to be intervened by the GRANTOR are indicated in this table.


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The Ayacucho Subsection (Emp. PE-28A) - Km. 0+000 (Ayacucho) shall not be delivered to the CONCESSIONAIRE. This Subsection is part of the Concession, where the Conservation is responsibility of the GRANTOR and the CONCESSIONAIRE is responsible for providing the Mandatory Services that may apply, regardless of whether the GRANTOR carries out conservation works. The scope of Conservation for this Subsection shall be similar to those indicated in paragraph 8.5 of section 3 of ANNEX I.

DELIVERY OF THE RIGHT OF WAY 5.11. The Rehabilitation and Improvement shall start in the term indicated in Clause

6.13 and may not start as far as the GRANTOR has not complied to deliver at least fifty percent (50%) of the length of the Izcuchaca – Mayocc Subsection comprised in the Right of Way. The deliver shall be made in lengths of at least 10 consecutive kilometers.

In case the released land areas of land identified in the FES are not delivered and that such delay prevents the CONCESSIONAIRE from starting or continuing the Rehabilitation and Improvement and presenting them for acceptance within the maximum execution period established in Clause 6.1, the GRANTOR shall grant a modification of term for the execution of the Rehabilitation and Improvement in the conditions specified in Clauses 6.14 to 6.16. The CONCESSIONAIRE shall formulate the legal technical diagnosis, plan of legal physical restructuration and the individual files of the property affected by the right of way of the Izcuchaca – Mayocc subsection according to the terms of reference contained in the Appendix 8 of ANNEX I of the Concession Contract. With the conformity and approval by the GRANTOR of the corresponding files, the CONCESSIONAIRE may perform the necessary actions to have the free availability of the areas. The expenses incurred by the CONCESSIONAIRE for the execution of such activities shall be approved and paid by the GRANTOR.

The GRANTOR shall apply the provisions contained in the Legislative Decree Nº 1192, Law Nº 30230, as well as the Regulation approved through Supreme Decree Nº 019-2015-VIVIENDA, or norms replacing them. The Concession Area shall be gradually increased until reaching the Right of Way, upon completion of the accountability procedures of the GRANTOR for the acquisition and expropriation of the property, as appropriate.

DELIVERY OF CONCESSION ASSETS 5.12. Together with the delivery of the land area that corresponds to the Concession

Area, the delivery of the Concession Assets shall be made, including the toll units that shall be delivered to the CONCESSIONAIRE, through the first Certificate of Partial Delivery of Assets, according to Clause 8.10.

5.13. The delivery of these assets shall be made within the deadlines and in the conditions established in Clauses 5.10 to 5.12 for the land area corresponding to the Concession Area.

TAKEOVER


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5.14. The takeover of the land area comprised in the Concession Area and of the delivered assets shall be made in one or several acts, as provided for in Clause 5.10.

5.15. During the Takeover, the GRANTOR and the CONCESSIONAIRE shall sign the

corresponding Certificates of Partial Delivery of Assets, which will be part of the Comprehensive Certificate of Delivery of Assets. The respective Certificates of Partial Delivery of Assets shall establish the general conditions of delivery and the specific allocation to fulfill the object of the Concession, specifying in as much detail as possible and regarding each of its components, their characteristics, location, condition, notes on their functioning or performance and other aspects of interest. The content of the provisions of the Certificates of Partial Delivery of Assets shall determine the responsibility of the GRANTOR and the CONCESSIONAIRE in relation to the Concession Assets referred to in Clause 5.25 of the Contract, as well as the Conservation obligations set forth in Clause 7.1 of the Contract.

5.16. The Initial Inventory and the Certificates of Partial Delivery of Assets shall be part

of the Comprehensive Certificate of Delivery of Assets. 5.17. The Comprehensive Certificate of Delivery of Assets and the Certificates of

Partial Delivery of Assets shall be signed in three (3) originals, one of which shall be delivered to the REGULATOR by GRANTOR at the appropriate time.

PURPOSES OF THE USE OF THE CONCESSION ASSETS 5.18. All the Concession Assets that the GRANTOR delivers to the

CONCESSIONAIRE shall only be intended for the execution of the Rehabilitation and Improvement, the Initial Periodic Maintenance and the Operation and Conservation of the Concession Subsections, comprising the provision of the Services established in this Contract.

OBLIGATIONS OF THE CONCESSIONAIRE REGARDING THE CONCESSION ASSETS 5.19. The CONCESSIONAIRE is obliged to carry out activities to preserve, within the

period established for the Concession, the state and the nature of the Concession Assets received from the GRANTOR, being clearly agreed and understood between the Parties that such assets shall suffer the deterioration resulting from its regular use. The CONCESSIONAIRE is also obliged to perform activities of Conservation, respond to Road Emergencies and, in general, all those works intended to maintain the operation of the Concession Assets and avoid a negative environmental impact according to the scope defined in the Environmental Management Instrument and/or the respective Technical File. The CONCESSIONAIRE is obliged to make the necessary and useful improvements required by the Concession Assets according to the required Service Levels.

For this purpose, a negative environmental impact makes reference to any irreversible damage or damage requiring a corrective, mitigation or compensation action from those environmental impacts or changes that occur in one, several or all of the factors that make up the environment, as a result of the execution of the project or activities with characteristics, magnitude or location with certain peculiarities in the area of influence.


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5.20. The CONCESSIONAIRE shall replace the Concession Assets lost as well as replacing those that are not technically suitable to meet their goal. By signing a Certificate of Reversion of Assets, the CONCESSIONAIRE shall have returned to the GRANTOR the assets to be replaced that the latter had provided to it in accordance with Clause 5.32. The CONCESSIONAIRE shall make available to the GRANTOR such assets through a written communicating, within a period of ninety (90) Calendar Days of the replacement or substitution. The CONCESSIONAIRE shall send a copy of such communication to the REGULATOR. The delay in the replacement of the Concession Assets shall be penalized according to Table Nº 2 of ANNEX IX.

5.21. The Concession Assets that the CONCESSIONAIRE incorporates or builds

during the Concession, while acquiring the qualification of Concession Assets, may not be transferred separately from the Concession, mortgaged, subject to security interests or subject to liens of any kind throughout the term of the Concession without the consent of the GRANTOR, prior opinion of the REGULATOR.

5.22. All the Concession Assets which have not been returned to the GRANTOR before

the Termination of the Concession, will be part of the Final Inventory and shall be returned to the GRANTOR.

5.23. Both the reversion and the return of assets made for any reason by the

CONCESSIONAIRE in favor of the Grantor shall not subject to any taxes, created or to be created, as provided by Article 22 of the Consolidated Text of the rules with the force of Law that regulate the concession to the private sector of public works of infrastructure and public services, approved by Supreme Decree Nº 059-96-PCM and its amendment, Law Nº 27156.

5.24. The CONCESSIONAIRE shall be responsible for damages, or losses caused to

the Concession Assets received from the date of the Takeover, until the Termination of the Concession Assets.

5.25. The CONCESSIONAIRE shall hold the GRANTOR harmless from and against

any action or exception of legal, administrative, arbitration or contractual nature, or claim of any nature in respect of the Concession Assets, provided that this situation occurs from the date of the Takeover and until their reversion by the CONCESSIONAIRE to the GRANTOR; and originates in any cause not attributable to the GRANTOR.

For its part the GRANTOR shall be responsible for damages affecting the CONCESSIONAIRE as a consequence of: (i) any situation or event before the Takeover, including responsibility for the pre-existing environmental and labor liabilities, (ii) any situation or event that having occurred after the Takeover, is originated for reasons arising prior thereto and (iii) any situation or event attributable to the GRANTOR. The GRANTOR shall hold the CONCESSIONAIRE harmless from any claims or actions from third parties arising from such events.

5.26. The CONCESSIONAIRE shall be responsible before the GRANTOR for the

correct administration and use of the Concession Assets and for the risk of loss, destruction and technological gap inherent to them.

5.27. The CONCESSIONAIRE, with the purpose of mitigating the risks of the Contract

undertakes to contract insurance policies under the terms set forth in CHAPTER XII of this Contract.


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5.28. The CONCESSIONAIRE shall be responsible and shall undertake to pay the

taxes, rates and contributions that are applied to the Concession Assets, in accordance with the Applicable Laws and Regulations.

RETURN OF THE CONCESSION ASSETS 5.29. Upon the Termination of the Concession for any reason, the CONCESSIONAIRE

has the obligation to return to the GRANTOR within thirty (30) Calendar Days, in a single act, or by partial deliveries, all those land areas comprised within the Concession Area that received from the GRANTOR in the Takeover or by constitution of easements or other subsequent acts, in good condition (except for ordinary wear), free from occupants and in use and operating conditions according to the technical parameters of ANNEX I and the indications given by the REGULATOR. The obligation contained in this Clause shall not apply in cases where the assets or land areas have not been delivered as provided for in this Contract or have been occupied by third parties for reasons not attributable to the CONCESSIONAIRE.

5.30. Likewise, upon the Termination of the Concession for any reason, the

CONCESSIONAIRE has the obligation to return to the GRANTOR within thirty (30) Calendar Days, in a single act, or by partial deliveries, the Concession Assets. The assets shall be returned in good condition except for ordinary wear, and free from occupants and, in case that under the terms of this Contract is found obliged, under use and Exploitation conditions according to the parameters set forth in the Contract, the provisions contained in ANNEX I and the indications given by the REGULATOR.

5.31. In case any of the situations indicated in Paragraph 1.11.5 occurs, b) or c), the CONCESSIONAIRE shall make available to the GRANTOR such asset through a written communication, with a copy to the REGULATOR.

5.32. During the act of return, by any of the situations described in Clause 1.11.5, the

CONCESSIONAIRE and the GRANTOR shall sign the respective Certificate of Reversion of Assets. This Certificate shall describe the asset to be returned, specifying in general or for each of its components, their characteristics, location, condition, notes on their operation or performance and other elements of interest.

5.33. The List of Concession Assets of the Final Inventory shall be part of the Certificate

of Reversion of Assets, as well as any other element that helps to interpret the returned object and its condition. The interpretative elements may include drawings, photographs or schemes.

5.34. The Certificate of Reversion of Assets shall be signed in three (3) originals, one

of which shall be delivered to the REGULATOR.


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CONCESSIONAIRE ASSETS 5.35. The CONCESSIONAIRE Assets that are convenient for the continuity of the

operations, may be offered and acquired by the GRANTOR upon the termination of the Concession, within a period not exceeding six (6) months from the date on which the CONCESSIONAIRE makes, if decided, available to the GRANTOR, the list of CONCESSIONAIRE Assets prior verification of their condition and normal use, as well as their real value according to market conditions, determined by a specialized expert hired by and at the expense of the CONCESSIONAIRE.

In this sense, the GRANTOR has the preferential purchase option in the indicated term.

EASEMENTS

5.36. The GRANTOR is responsible for and undertakes to perform the procedures of expropriation of rights and/or imposition of easements required by the CONCESSIONAIRE to comply with its obligations under this Contract, at the request of the latter, according to the procedure and meeting the requirements provided for in the law of matter, and the powers conferred by Legislative Decree Nº 1192 and other Applicable Laws and Regulations. All costs related to the procedures of expropriation of rights and/or imposition of easements shall be borne by the GRANTOR.

Easements for the occupation of private assets may be as follows:

a) Of temporary occupation of assets of particular property, essential for the compliance of the obligations of the Contract.

b) Of transit, for the compliance of the obligations of the Contract.

5.37. Easements, once imposed, shall be considered as rights of the Concession. 5.38. Temporary occupation easements entitle the owner of the servient property to

receive payment of compensation and indemnifications as established by the Applicable Laws and Regulations. The negotiation and the cost of compensation that might apply as a result of the imposition of such easements shall correspond to the GRANTOR, from its own resources.

5.39. The grantor shall provide the facilities and make the arrangements for the

CONCESSIONAIRE to make use of the police force assistance, provided there is opposition of the owner or driver of the servient property, without prejudice to initiating legal actions that may apply.

5.40. The GRANTOR recognizes the right of the CONCESSIONAIRE to prevent or

oppose to any repairs or modifications that any public or private entity intends to perform, favored or not with an easement, and whose exercise is incompatible with the road infrastructure. The CONCESSIONAIRE may request the GRANTOR to intervene to appropriately defend its rights.

5.41. If an easement is extinguished due to the CONCESSIONAIRE and for this reason

a new easement was needed, the CONCESSIONAIRE shall obtain it at its own expense. Conversely, if for any reason not attributable to the CONCESSIONAIRE, it loses the right to any easement already established, the GRANTOR shall be obliged to obtain, at his own cost, the imposition of a new easement in favor of the CONCESSIONAIRE, to replace the previous one.


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POSSESSORY DEFENSES 5.42. The CONCESSIONAIRE has the obligation to exercise the following types of

possessory defense from the date of the Takeover, both in the case of attempted usurpation of the area involved in the Concession Area, as in the case of activities incompatible with the proper use of said area by third parties, provided it has effectively received such unoccupied areas from the GRANTOR:

a) Possessory extrajudicial defense, used to repel the force used against the

CONCESSIONAIRE and to recover the asset, without time interval, if it was dispossessed, but always refraining from the use of de fact proceedings not justified by the circumstances.

b) Judicial possessory defense that the CONCESSIONAIRE shall exercise, in

case any affectation, dispossession, occupation and usurpation, fall on the Concession, in which case it shall inform the REGULATOR about such facts and shall make use of judicial mechanisms and resources allowing it to hold harmless the right of the GRANTOR on the Concession Assets.

5.43. The exercise of the defenses described above does not exempt the

CONCESSIONAIRE from responsibility, who in case of a situation such as those described in the preceding paragraph shall immediately coordinate with the GRANTOR the legal actions that has brought or will bring, in which case, the GRANTOR shall be free to take the legal actions deemed suitable to hold harmless its right on the Concession Assets, provided that these claims are originated from events occurred after the transfer of such assets to the CONCESSIONAIRE.

The exercise of possessory defenses, both judicial and extra judicial shall be the responsibility of the CONCESSIONAIRE, who shall assume their cost. Failing to exercise the possessory defense shall be penalized according to Table Nº 2 of ANNEX IX.

5.44. The determination of the Right of Way is competence of the Ministry of Transportation and Communications by Ministerial Resolution.

The Longitudinal de la Sierra Highway Section 4 Project comprises 18 Subsections, whose Rights of Way are the following:

Nº Subsection Ministerial Resolution Nº

Right of Way

1 Dv. Huancayo – Pte. Chanchas

RM N° 234-2013 MTC/02

20m (10m on each side of the axis)

2 Pte. Chanchas - Huayucachi

RM N° 234-2013 MTC/02


3 Huayucachi - Imperial RM N° 234-2013 MTC/02


4 Imperial - Izcuchaca RM N° 234-2013 MTC/02


5 Izcuchaca - Mayocc RM N° 562-2006 - MTC/02


6 Mayocc - Huanta RM N° 562-2006 - MTC/02



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Nº Subsection Ministerial Resolution Nº

Right of Way

7 Huanta - Ayacucho (Emp PE-28A)

RM N° 562-2006 - MTC/02


8 Ayacucho (Emp PE-28A) - Km. O+000 (Ayacucho)

RM N° 562-2006 - MTC/02


9 Km. O+000 (Ayacucho) - Abra Tocto

RM N°234-2013 MTC/02


10 Abra Tocto - Ocros RM N° 234-2013 MTC/02


11 Ocros - Chincheros RM N° 234-2013 MTC/02


12 Chincheros - Santa María de Chicmo

RM N° 234-2013 MTC/02


13


RM N° 234-2013 MTC/02


14


RM N° 234-2013 MTC/02


15

Dv. Kishuara (Emp PE-3SE) - Dv. Sahuinto (Emp PE-3S)

RM N°234-2013 MTC/02


16 Dv. Sahuinto (Emp PE-3S) - Puente Sahuinto

RM N°234-2013 MTC/02


17


RM N° 304-2007 MTC/02


18

Puente Choclococha - Ayacucho (Emp. PE-28A)

RM N° 304-2007 MTC/02


INVENTORIES 5.45. Initial Inventory

List of the Concession Assets that the GRANTOR delivers to the CONCESSIONAIRE, containing the assets necessary to start the Exploitation of the Concession, including the existing toll units and the Assets considered in the Subsections. Considering that the Road Inventory of Subsections kept by the GRANTOR is a road inventory aimed at planning, the CONCESSIONAIRE shall complement this information, to have the detail required for the purposes of the Concession. For the review and approval of the additional information, the GRANTOR shall appoint a verification committee, which must have a representative of the REGULATOR, as observer. This verification committee, within thirty (30) Days of its appointment, shall decide by means of a Certificate, the acceptance or rejection of the Initial Inventory. If no pronouncement is made by the verification committee within the established period, it shall be given a one-time additional period of ten (10) Days to make such pronouncement.


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The Certificate of Acceptance shall be part of the Inventory of Concession Assets.

5.46. Rehabilitation and Improvement and Initial Periodic Maintenance Inventory List of Concession Assets corresponding to any Rehabilitation and Improvement or Initial Periodic Maintenance that is executed during the Concession and that upon its completion shall be submitted by the CONCESSIONAIRE to the GRANTOR and to the REGULATOR. This Inventory shall be submitted in the forms described in the Manual of Road Inventories approved by Directorial Resolution Nº 09-2014-MTC/14 or regulation in force.

5.47. Annual Inventory List of Concession Assets and CONCESSIONAIRE Assets kept by the CONCESSIONAIRE at the annual closure dates of each Contract year up to the its termination that shall be submitted by the CONCESSIONAIRE to the GRANTOR and to the REGULATOR, before January 30 of each Concession Year, and throughout the validity thereof.

This Inventory shall be submitted in the forms described in the Manual of Road Inventories approved by Directorial Resolution Nº 09-2014-MTC/14 or regulation in force.

5.48. Final Inventory List of Concession Assets and CONCESSIONAIRE Assets kept by the CONCESSIONAIRE at the date of Termination of the Concession. It shall be formulated by the CONCESSIONAIRE.

For the review and approval of the information, a verification committee shall be appointed, which must have a representative of the REGULATOR, as observer. This verification committee, within thirty (30) Days of its appointment, shall decide by means of a Certificate, the acceptance or rejection of the Final Inventory.

If no pronouncement is made by the verification committee within the established period, it shall be given a one-time additional period of ten (10) Days to make such pronouncement.

The Certificate of Acceptance shall be part of the Inventory of Concession Assets.

CHAPTER VI: EXECUTION OF THE INITIAL PERIODIC MAINTENANCE AND THE REHABILITATION AND IMPROVEMENT

TERM OF EXECUTION OF THE INITIAL PERIODIC MAINTENANCE AND THE REHABILITATION AND IMPROVEMENT

6.1. The CONCESSIONAIRE undertakes to execute the Initial Periodic Maintenance within a maximum period of thirty-six (36) months after its commencement, and the Rehabilitation and Improvement within a maximum period of thirty-six (36) months after its commencement. To start the execution of the indicated interventions, compliance with the conditions indicated in Clause 6.12 and 6.13, shall be respectively verified.

INITIAL PERIODIC MAINTENANCE AND REHABILITATION AND IMPROVEMENT

6.2. The CONCESSIONAIRE undertakes to execute the Initial Periodic Maintenance and the Rehabilitation and Improvement corresponding to the Concession,


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without prejudice to the Conservation activities referred to in CHAPTER VII. The Rehabilitation and Improvement shall be executed according to the Final Engineering Studies and Environmental Management Instrument, and the Initial Periodic Maintenance according to the Technical Files, in the respective Subsections according to the following detail:

Rehabilitation and Improvement a) Izcuchaca – Mayoc (116.86 km approx.) Initial Periodic Maintenance a) Huanta – Ayacucho (42.25 km approx.) b) Km 0+000 (Ayacucho) – Abra Tocto (50.00 km approx.) c) Santa María de Chicmo – Andahuaylas (Emp PE-30B) (20.340 km

approx.) d) Andahuaylas (Emp PE-30B) – Dv. Kishuara (Emp PE-3SE) (54.307 km

approx.) e) San Clemente (Emp PE-1S) – Puente Choclococha (163.810 km approx.) f) Pte. Choclococha – Ayacucho (172.066 km approx.) In case the GRANTOR decides to execute works in the Concession Area different from those indicated in this Clause, it shall undertake to coordinate with the CONCESSIONAIRE so as not to affect the compliance with its obligations. The Subsections where the CONCESSIONAIRE must execute the interventions of Rehabilitation and Improvement and Initial Periodic Maintenance shall be delivered by the GRANTOR within the terms indicated in Clause 5.10 and without requirements of service levels.

SUPERVISION OF THE INITIAL PERIODIC MAINTENANCE AND REHABILITATION AND IMPROVEMENT

6.3. The REGULATOR is responsible for, directly or through the supervisor, carrying out supervision and control incumbent upon it during the development of the Rehabilitation and Improvement and Initial Periodic Maintenance indicated in the preceding clause. When the REGULATOR appoints a supervisor of the Rehabilitation and Improvement and the Initial Periodic Maintenance, it shall inform the CONCESSIONAIRE in writing in a maximum period of five (5) Days of the Date of Signing of the Contract with the supervisor indicated above.

The CONCESSIONAIRE shall give the REGULATOR or supervisor of the Rehabilitation and Improvement and Initial Periodic Maintenance and the team appointed by the latter, if any, free access to the Concession Area to carry out their work without obstacles and with the required accuracy. Failing to give the REGULATOR, the supervisor of the Rehabilitation and Improvement and Initial Periodic Maintenance and the team appointed by the latter, if any, free access to the work areas to do their work shall be penalized according to Table Nº 3 of ANNEX IX.

TECHNICAL FILES AND FINAL ENGINEERING STUDY AND ENVIRONMENTAL MANAGEMENT INSTRUMENT FOR THE EXECUTION OF THE INITIAL PERIODIC MAINTENANCE AND THE REHABILITATION AND IMPROVEMENT The misalignments, mistakes, defects or omissions in the Final Engineering Study and Environmental Management Instrument for the Rehabilitation and Improvement and/or


45

in the Technical Files for the Initial Periodic Maintenance, subject to approval at the time, which could not be detected and that appear after the approval made by PROVIAS NACIONAL do not exempt THE CONCESSIONAIRE from its liability regarding their formulation.

6.4. The Technical Files for the Initial Periodic Maintenance of the Subsections

indicated in Clause 6.2 shall be formulated by the CONCESSIONAIRE, who shall submit them to the GRANTOR, with copy to the REGULATOR, as indicated in the following table:

Studies

Submission of the

CONCESSIONAIRE

Review Correction of

Raised Objections of

CONCESSIONAIRE

Assessment of Correction of Raised Objections

Withdrawal of Objections

CONCESSIONAIRE

Assessment of Correction of Raised Objections

REGULATOR

GRANTOR REGULATO

R GRANTOR

REGULATOR

GRANTOR

Technical File

(1)

210 (2)

30 (3)

10 (4)

15

(5)

20

(6)

10

(7)

15

(8)

10

(9)

10

Periods are maximum and are considered in Calendar Days (1) From the Date of Signing of the Contract. (2) From the official receipt of the Technical File by the REGULATOR. (3) From the official receipt of the opinion of the REGULATOR. (4) From the official receipt of the statement of objections of the GRANTOR and

REGULATOR. (5) From the official receipt of the correction of raised objections submitted by the

CONCESSIONAIRE. (6) From the official receipt of the opinion of the REGULATOR. (7) From the official receipt of the statement of objections of the GRANTOR and


CONCESSIONAIRE. (9) From the official receipt of the favorable opinion of the REGULATOR.

In case the GRANTOR has made no decision within the established period, the Technical File shall not be deemed approved. The CONCESSIONAIRE is obliged to correct the raised objections processed by the GRANTOR; otherwise it shall be subject to the penalty indicated in Table Nº 3 of ANNEX IX. The objections raised by the GRANTOR and the REGULATOR shall not imply in any case any increase in the APIPM.

Technical Files for the Initial Periodic Maintenance shall consider the Initial Periodic Maintenance of bridges and pontoon bridges, speed humps and all Works of Art, as considered in the Terms of reference. They do not include bridges of the San Clemente-Ayacucho Subsections indicated in paragraph 1.5 of ANNEX 9 of the Bidding Terms and Conditions, which shall be received according to Appendix 12 of ANNEX I.

In addition, the CONCESSIONAIRE shall formulate at its own expense, the Final Engineering Studies for the critical and/or vulnerable sectors identified as indicated in Clauses 6.43 to 6.46. The amount for the execution of these interventions shall be borne by the GRANTOR as set forth in Clauses 6.32 to 6.38. The CONCESSIONAIRE may submit the Technical Files partially for approval, as a minimum those corresponding to three (3) Subsections.


46

6.5. The Final Engineering Study and Environmental Management Instrument for the Rehabilitation and Improvement, for the Subsection indicated in Clause 6.2 shall be formulated by the CONCESSIONAIRE, who shall submit them to the GRANTOR, with copy to the REGULATOR, as indicated in the following table:

Studies

Submission of the

CONCESSIONAIRE

Review Correction of

Raised Objections

CONCESSIONAIRE

Assessment of Correction of Raised

Objections

Correction of Raised

Objections

CONCESSIONAIRE

Assessment of Correction of Raised

Objections

REGULATOR

GRANTOR REGULAT

OR GRANTOR

REGULATOR

GRANTOR

Technical file layout

(1)

90

(2)

20

(3)

10

(4)

10

(5)

15

(3)

10

(4)

10

(5)

10

(6)

10

FES (7)

210

(8)

30

(3)

10

(4)

15 (5)

20 (3)

10 (4)

15 (5)

10

(6)

10

Periods are maximum and are considered in Calendar Days (1) From the Date of Signing of the Contract. (2) From the official receipt of the technical file of the by the REGULATOR. (3) From the official receipt of the opinion of the REGULATOR. (4) From the official receipt of the statement of objections of the GRANTOR and


CONCESSIONAIRE. (6) From the official receipt of the favorable opinion of the REGULATOR. (7) From the date of official communication of approval of layout. (8) From the official receipt of the FES by the REGULATOR.

In case the GRANTOR has made no decision within the established period, the Final Study shall not be deemed approved. The CONCESSIONAIRE is obliged to correct the raised objections processed by the GRANTOR; otherwise it shall be subject to the penalty indicated in Table Nº 3 of ANNEX IX. The objections raised by the GRANTOR and the REGULATOR shall not imply in any case any increase in the PRI. The EDI shall be formulated based on the Feasibility Study for a third-class road in difficult terrain and having as a reference DG-2013. To be approved, the framework of the National system of Public Investment (SNIP) shall be observed, or a rule replacing it. In addition, the CONCESSIONAIRE shall formulate at its own expense, the Final Engineering Studies for the solutions to the critical and/or vulnerable sectors considered in the Feasibility Study. The GRANTOR will only acknowledge the critical and/or vulnerable sectors considered in the Feasibility Study. The amount for the execution of these interventions shall be borne by the GRANTOR as set forth in Clauses 6.32 to 6.38. The CONCESSIONAIRE shall formulate at its own expense the final study of the Mayocc Bridge and the GRANTOR will pay the execution of the works according to the provisions in Clauses 6.32 to 6.38.

6.6. During the formulation of the studies indicated in the previous Clauses, the CONCESSIONAIRE is obliged to provide the REGULATOR and the GRANTOR with all the information available requested by them and facilitate them the access to the activities and studies made by the CONCESSIONAIRE for this purpose.


47

The information shall be submitted within ten (10) Calendar Days of the date in which the REGULATOR and /or the GRANTOR have formulated in writing the corresponding request.

It should be noted that the information submitted by the CONCESSIONAIRE shall not constitute a partial submission of the requested studies.

6.7. During the compliance with the Execution Programs, the CONCESSIONAIRE may propose amendments to the Final Engineering Study and Environmental Management Instrument for the Rehabilitation and Improvement and/or to the Technical Files for the Initial Periodic Maintenance, which must be approved by the GRANTOR within Ten (10) Calendar Days of the date of receipt of the prior opinion of the REGULATOR which shall be issued within a period of fifteen (15) Calendar Days, without this entailing a reduction in the Service Levels set forth in this Contract or the generation of higher co-financing by the GRANTOR.

If during compliance with the Execution Programs of the Rehabilitation and Improvement and/or Initial Periodic Maintenance the CONCESSIONAIRE identifies critical sectors not included in the studies that are not a consequence of the previous paragraph, the provisions of clauses 6.43 a 6.46 shall apply.

LOGBOOK OF INITIAL PERIODIC MAINTENANCE AND REHABILITATION AND IMPROVEMENT AND BOOK OF SUGGESTIONS AND COMPLAINTS 6.8. From the commencement of the Initial Periodic Maintenance or the Rehabilitation

and Improvement, whichever comes first, the CONCESSIONAIRE undertakes to open and keep a Logbook of Rehabilitation and Improvement and Initial Periodic Maintenance. Such Logbook of Rehabilitation and Improvement and Initial Periodic Maintenance shall record the most important events during the execution thereof, including, among others: list of source of materials that are being used; list of suppliers and subcontractors; copy of results of the commissioning tests and essays; copy of communications between the CONCESSIONAIRE and the REGULATOR; copy of Progress Reports; list of the events that have affected the progress timetable; queries and responses between the REGULATOR or supervisor appointed by the same, regarding all transcendent events that are related to the process of execution of works and any other useful information to document the execution process of the Rehabilitation and Improvement and Initial Periodic Maintenance. It shall also record the conditions under which the road is commissioned.

The Logbook of Rehabilitation and Improvement and Initial Periodic Maintenance shall be kept in original. It shall be duly authenticated by a notary, have its pages numbered, and optionally, use the mechanized system of loose sheets.

Failing to keep a Logbook or preventing the GRANTOR or the REGULATOR from having free access to the Logbook during the execution of the Rehabilitation and Improvement and Initial Periodic Maintenance shall be penalized according to Table Nº 3 of ANNEX IX.

6.9. Likewise, the CONCESSIONAIRE undertakes to open during the term of Exploitation of the Concession, a Book of Suggestions and Complaints and all other mechanisms established in this regard in the Regulation of Management of Complaints and Resolution of Disputes of the REGULATOR.

Failing to keep a Book of Suggestions and Complaints throughout the term of the Exploitation shall be penalized according to Table Nº 3 of ANNEX IX.


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SCHEDULING OF THE EXECUTION OF THE INITIAL PERIODIC MAINTENANCE AND REHABILITATION AND IMPROVEMENT 6.10. The CONCESSIONAIRE is responsible for the planning of execution of the Initial

Periodic Maintenance and the Rehabilitation and Improvement, which shall be reflected in the corresponding Execution Program.

Thirty (30) Calendar Days before the commencement of the Rehabilitation and Improvement and thirty (30) Calendar Days before the commencement of the Initial Periodic Maintenance, the CONCESSIONAIRE shall submit the REGULATOR, in magnetic and physical means the respective Execution Program that includes all subheadings and amounts necessary for the execution of the Rehabilitation and Improvement or the Initial Periodic Maintenance, contained in the Final Engineering Study or Technical Files, as appropriate. The REGULATOR shall issue its conformity within a period of ten (10) Calendar Days for the program of Rehabilitation and Improvement and fifteen (15) Calendar Days for the program of Initial Periodic Maintenance. After the prior opinion of the REGULATOR, the GRANTOR shall issue its agreement within ten (10) and fifteen (15) Calendar Days, respectively. The Execution Program, in each case, shall comply with the maximum periods set forth in Clause 6.1. The REGULATOR shall verify the compliance with the Execution Program. In the event of delay in the commencement of the Rehabilitation and Improvement or the Initial Periodic Maintenance, as appropriate, or in the completion of the execution thereof for reasons attributable to the CONCESSIONAIRE, a penalty shall be applied to the CONCESSIONAIRE without prior notice, equivalent to three hundredths percent (0.03 %) of the budget approved in the Final Engineering Studies and Environmental Management Instrument or Technical Files, as appropriate, for each Day of delay, up to a maximum of five percent (5%) of the budgets contained in the Final Engineering Study and Environmental Management Instrument or Technical Files, as the case may be. If the stated percentage is exceeded, it shall be grounds for cancellation. The REGULATOR shall carry out the Progress Control based on the Execution Program.

6.11. The Execution Program shall be formulated taking into account that it shall guarantee that traffic will not be interrupted for a period longer than six (6) hours per day, in coordination with the REGULATOR, in the sector intervened during the execution of works. If the event of special cases, the CONCESSIONAIRE may request the REGULATOR to extend the indicated period.

COMMENCEMENT OF EXECUTION OF THE INITIAL PERIODIC MAINTENANCE AND THE REHABILITATION AND IMPROVEMENT 6.12. The Initial Periodic Maintenance shall start no later than three hundred and ninety

(390) Calendar Days of the Date of Signing of the Contract. This shall require the verification by the GRANTOR of the following conditions:

a) The CONCESSIONAIRE has demonstrated the financial closure as

established in Appendix 1 of ANNEX XI.


49

b) The GRANTOR has approved the Technical Files that include the Engineering components and Environmental Management Instrument for the execution of the Initial Periodic Maintenance.

c) Delivery of land areas required to start the Initial Periodic Maintenance has been made, as indicated in Clause 5.10

d) The Execution Program has been submitted and conformity of the GRANTOR has been obtained.

e) The CONCESSIONAIRE has submitted a legalized copy of the construction contracts under the terms established in the Bidding Terms and Conditions.

f) The CONCESSIONAIRE has submitted the documentation that demonstrates the registration in the corresponding Registry Office of the Bylaws of the legal person(s) that shall act as Constructor(s).

g) The CONCESSIONAIRE has submitted a copy legalized by notary of the entries of the book of registration of shares or equivalent document recording the conformation at the Date of Signing of the Contract of the shareholding or participations of the Constructor. Such documentation shall not be necessary in case the participation of the Constructor has been formalized through the signing of a contract.

h) The CONCESSIONAIRE has complied with the delivery of the Performance Bond of Execution of Initial Periodic Maintenance, according to Clause 11.2 and following.

i) The CONCESSIONAIRE has contracted Insurance policies as indicated in Clause 12.3.

j) The CONCESSIONAIRE has complied with the increase of social capital according to Clause 3.5 b).

6.13. The execution of the Rehabilitation and Improvement shall start no later than five

hundred and seventy-five (575) Calendar Days of the Date of Signing of the Contract. This shall require the verification by the GRANTOR of the following conditions:

a) The GRANTOR has approved the Final Engineering Study and

Environmental Management Instrument for the execution of the Rehabilitation and Improvement.

b) The CONCESSIONAIRE has complied with the provisions of point a) of Clause 6.12.

c) Delivery of land areas required to start the Rehabilitation and Improvement, and comprised within the corresponding Concession Area has been made, as indicated in Clauses 5.10 and 5.11.

d) The Execution Program has been submitted and conformity of the GRANTOR has been obtained.

e) The legalized copy of the construction contracts under the terms established in the Bidding Terms and Conditions remains valid.

f) The registration in the corresponding Registry Office of the Bylaws of the legal person(s) that act as Constructor(s) remains valid.

g) The entries of the book of registration of shares or equivalent document recording the conformation at the Date of Signing of the Contract of the shareholding or participations of the Constructor remain valid. Such certification shall not be necessary in case the participation of the Constructor has been formalized through the signing of a contract.

h) The CONCESSIONAIRE has complied with the delivery of the Performance Bond of Execution of Rehabilitation and Improvement, according to Clause 11.2, and following.


50

i) The CONCESSIONAIRE maintains the Insurance policies in full force and effect, as indicated in Clause 12.3.

j) The CONCESSIONAIRE has complied with the increase of social capital according to Clause 3.5 b)

MODIFICATION OF TERMS FOR THE EXECUTION OF THE INITIAL PERIODIC MAINTENANCE AND/OR REHABILITATION AND IMPROVEMENT

6.14. In case the CONCESSIONAIRE requires the extension of a partial term in the

Execution Program, not implying the modification of the total term, the CONCESSIONAIRE shall request it to the REGULATOR before its expiration.

6.15. Requests for the extension of term for the execution of the Rehabilitation and

Improvement and/or Initial Periodic Maintenance, shall include the reformulation of the Execution Program, if applicable, and shall be submitted to the GRANTOR, with a copy to the REGULATOR who shall give its opinion to the GRANTOR within a maximum term of thirty (30) Calendar Days of the notification of the request. The GRANTOR shall issue an opinion within thirty (30) Calendar Days of the receipt of the opinion of the REGULATOR. This period starts from receipt of the opinion of the REGULATOR. Said term begins from the receipt of the opinion of the REGULATOR or at the expiration of the term without the issuing of this opinion, whichever comes first. After this period, the silence of the GRANTOR shall be construed as a denial of the request for extension. When extensions are granted for reasons not attributable to the CONCESSIONAIRE, they shall prevent the application of penalties and other measures provided to sanction a breach of contract because of delay in the execution of the corresponding work.

6.16. In the event similar requests are submitted subsequently, they shall be processed

pursuant to the procedure indicated for extension.

In the event that the commencement or continuation of Rehabilitation and Improvement and/or Initial Periodic Maintenance are delayed by an act attributable to the GRANTOR, the CONCESSIONAIRE may request the GRANTOR, that the deadline of the Rehabilitation and Improvement and/or Initial Periodic Maintenance is extended to the same duration of said delay, according to the procedure indicated in the preceding Clause.


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PASSAGE DURING THE EXECUTION OF THE INITIAL PERIODIC MAINTENANCE AND THE REHABILITATION AND IMPROVEMENT 6.17. The CONCESSIONAIRE undertakes, while executing the Rehabilitation and

Improvement and/or Initial Periodic Maintenance, to comply with the Applicable Laws and Regulations concerning traffic management, contained in the General Technical Specifications for Road Construction and the Manual of Road Traffic Control Devices, to follow the indications of the Final Engineering Study and Environmental Management Instrument and/or Technical Files, as applicable, and to comply with the instructions and recommendations determined by the REGULATOR in this regard, which may not establish obligations for the CONCESSIONAIRE additional to those provided for in this Contract and in the Applicable Laws and Regulations. The fulfillment of this obligation shall not imply the payment of any special compensation to the CONCESSIONAIRE.

From the Takeover of Subsections where the Rehabilitation and Improvement and the Initial Periodic Maintenance shall be executed until the start of each one of the interventions, the CONCESSIONAIRE shall make the corresponding Routine Maintenance.

6.18. Without prejudice to the provisions of the preceding Clause, the CONCESSIONAIRE is responsible for maintaining the public roads or variants for which it is necessary to divert traffic because of the execution of the Rehabilitation and Improvement and/or Initial Periodic Maintenance, passable for all type of vehicles and at its own expense. These roads shall allow traffic and have all conditions to allow traffic flow. Failing to comply with this obligation shall generate a penalty as indicated in Table 3 of ANNEX IX.

6.19. To fulfill the obligation described in the previous Clause the CONCESSIONAIRE undertakes to submit to the REGULATOR for approval, thirty (30) Calendar Days before the commencement of any task for the execution of the Rehabilitation and Improvement and/or Initial Periodic Maintenance, a temporary traffic plan, specifically mentioning the methods, procedures and technologies to ensure traffic flow across the sector affected by the works. The REGULATOR shall issue its approval or opinion within a period of twenty (20) Days. Failure to issue an opinion shall be construed as the approval of the Temporary Traffic Plan. The REGULATOR may at any time verify compliance with the temporary traffic plan and apply the appropriate sanctions if noncompliance is proven. Once the plan is implemented, the REGULATOR may, in agreement with the CONCESSIONAIRE, propose amendments thereto. Failing to comply with this obligation shall generate a penalty as indicated in Table Nº 3 of ANNEX IX.

6.20. In accordance with the regulations in force in this regard, the CONCESSIONAIRE undertakes to ensure the security of transit and provide, place and maintain warning signboards and signs, day and night, in the place of the Rehabilitation and Improvement and the Initial Periodic Maintenance and throughout the period of execution thereof.

Through the use of posters, notices and/or signboards, the CONCESSIONAIRE shall communicate to the affected population and Users about the indicated activities at least seventy-two (72) hours in advance.


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ACCEPTANCE OF THE INITIAL PERIODIC MAINTENANCE AND THE REHABILITATION AND IMPROVEMENT 6.21. Prior to the request to the GRANTOR of partial or total acceptance of the Initial

Periodic Maintenance or the Rehabilitation and Improvement the CONCESSIONAIRE shall submit to the REGULATOR the Certificate of Conformity of Correct Application of the Environmental Management Plans issued by the General Directorate of Social Environmental Issues of the MTC.

The requirements for the issuance of the Certificate of Conformity of Correct Application of the Environmental Management Plans may not exceed the social environmental obligations established in Section XIII of the Contract and the Environmental Management Instrument.

For purposes of the valuation and approval of reports of the Rehabilitation and Improvement and the Initial Periodic Maintenance, indications in Appendix 5 and Appendix 6 of ANNEX XI of the Contract shall be followed, respectively.

Rehabilitation and Improvement

6.22. Within five (5) Days of having requested the partial acceptance of the Rehabilitation and Improvement, the GRANTOR shall appoint an Acceptance Committee, which must have at least one representative of the REGULATOR as observer. The Acceptance Committee, within thirty (30) Days of its appointment, shall decide by means of the Certificate of Acceptance of the sector where the CONCESSIONAIRE has completed the execution of the interventions of Rehabilitation and Improvement if its execution complies with the requirements of the Contract and shall determine its acceptance or rejection. If the work is accepted, the authorization for the commissioning of the road corresponding to the completed sector shall be considered granted. If no pronouncement is made by the Acceptance Committee within the established period, the Committee shall be given a one-time additional period of ten (10) Days to make such pronouncement. The Certificate of Acceptance shall be part of the Inventory of Concession Assets.

6.23. The Acceptance Committee shall approve with objections the Rehabilitation and

Improvement, in case there are minor defects, whose correction represents no more than one percent (1.0%) of the value of the implementation budget. The CONCESSIONAIRE shall have thirty (30) Days extendable by the Acceptance Committee up to a maximum of ninety (90) Days, to make the correction of objections.

In case of rejection of the Rehabilitation and Improvement by the Acceptance Committee, the CONCESSIONAIRE shall correct the objections or remedy the deficiencies detected by the Acceptance Committee, so that the commissioning of the road sector may be carried out within the period established by the Acceptance Committee, which in no case shall exceed one hundred and twenty (120) Days from the notification of the Acceptance Committee.

6.24. If any of the Parties disagrees with the pronouncement of the Acceptance

Committee, it may request that the dispute is settled through a technical assessment by a civil engineer chosen by agreement between the GRANTOR and the CONCESSIONAIRE. In case after five (5) Days from the date of installation, the Parties have not appointed the common expert, either party may request the Peruvian Engineers Association to appoint the expert. In no case,


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may the expert have had direct or indirect links with any of the Parties in the past five (5) years.

The decision of the expert shall be issued within a period of thirty (30) Days of the date the Parties have supported their position within the time allowed by the expert, shall be final and cannot be contested. The costs of the expert’s work shall be borne by the Party not favored with the pronouncement of the expert. In this case, the periods established in paragraph 5 (c) of this Appendix shall be suspended until the issuance of the pronouncement of the expert.

6.25. If the period established by the Acceptance Committee for the appropriate

remedy has expired without the work having been accepted for reasons attributable to the CONCESSIONAIRE, the GRANTOR shall terminate the Contract, prior opinion of the REGULATOR as set forth in CHAPTER XVI and execute the Performance Bond of Execution of Rehabilitation and Improvement.

Initial Periodic Maintenance 6.26. Within five (5) Days of having requested the acceptance of the Initial Periodic

Maintenance, the GRANTOR shall appoint an Acceptance Committee, which must have at least one representative of the REGULATOR as observer. The Acceptance Committee, within thirty (30) Days of its appointment, shall decide by means of the Certificate of Acceptance of the corresponding Subsection of the Concession if its execution complies with the requirements of the Contract and shall determine its acceptance or rejection. If the Initial Periodic Maintenance is accepted, the authorization for the commissioning of the road corresponding to the Subsection of the Concession shall be considered granted, and the Certificate(s) of Acceptance shall be part of the Inventory of Concession Assets. If no pronouncement is made by the Acceptance Committee within the established period, the Committee shall be given a one-time additional period of ten (10) Days to make such pronouncement. If the additional period is completed and no pronouncement is made by the Committee, the corresponding Subsection shall not be considered accepted.

6.27. The Acceptance Committee shall approve with objections the Initial Periodic

Maintenance, in case there are minor defects, whose correction represents no more than one percent (1.0%) of the value of the implementation budget. The CONCESSIONAIRE shall have thirty (30) Days extendable by the Acceptance Committee up to a maximum of ninety (90) Days, to make the correction of objections, and the authorization for the commissioning of the road in the corresponding Subsection shall be granted once the correction of objections has been verified. The delay in the period established to correct the objections shall generate a penalty as indicated in Table 3 of ANNEX IX.

In case of rejection of the Initial Periodic Maintenance by the Acceptance Committee, the CONCESSIONAIRE shall correct the objections or remedy the deficiencies detected by the Acceptance Committee, so that the commissioning of the corresponding road Subsection may be carried out within the period established by the Acceptance Committee, which in no case shall exceed one hundred and twenty (120) Days from the notification of the Acceptance Committee.


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6.28. If any of the Parties disagrees with the pronouncement of the Acceptance Committee, it may request that the dispute is settled through a technical assessment by a civil engineer chosen by agreement between the GRANTOR and the CONCESSIONAIRE. In case after five (5) Days from the date of installation, the Parties have not appointed the common expert, either party may request the Peruvian Engineers Association to appoint the expert. In no case, may the expert have had direct or indirect links with any of the Parties in the past five (5) years.

The decision of the expert shall be issued within a period of thirty (30) Days of the date the Parties have supported their position within the time allowed by the expert, shall be final and cannot be contested. The costs of the expert’s work shall be borne by the Party not favored with the pronouncement of the expert.

In this case, the periods established in Clause 6.26 shall be suspended until the issuance of the pronouncement of the expert.

6.29. If the period established by the Acceptance Committee for the appropriate remedy has expired without the Initial Periodic Maintenance having been accepted for reasons attributable to the CONCESSIONAIRE, the GRANTOR shall terminate the Contract, prior opinion of the REGULATOR as set forth in CHAPTER XVI and execute the Performance Bond of Execution of Initial Periodic Maintenance, under the provisions of this CHAPTER. In case of Additional Works, the guarantee required according to Clause 6.35 shall be executed.

ADDITIONAL WORKS 6.30. If during the term of the Concession either Party determines the need for

Additional Works, it will be subject to the procedure provided for in the following Clauses. For these works, Law Nº 27446 "Law of the National System of Environmental Impact Assessment" or Article 4 of Supreme Decree Nº 054-2013-PCM, which approves the special provisions for the administrative procedures of authorizations and/or certifications for investment projects within the national territory shall apply, as appropriate.

6.31. In the case indicated in the previous Clause, the Party that requests the Additional Works shall submit a report to the REGULATOR, with copy to the other Party, to support the need to carry out such works. The GRANTOR shall have fifteen (15) Calendar Days from the receipt of the opinion of the REGULATOR in Clause anterior to authorize the execution of Additional Works.

6.32. The investment of Additional Works, as well as the amounts for their Operation and Conservation shall be borne by the GRANTOR. The investment amount including VAT of all the Additional Works agreed including works for Road Safety, works in Critical Sectors and environmental overruns, if appropriate, may not exceed together fifteen percent (15%) of the Total Cost of the Project, in accordance with the definition indicated in Supreme Decree Nº 410-2015-EF, including VAT The indicated rate includes costs for studies and monitoring.

In these cases, the Service Levels shall be at least those indicated in ANNEX I.


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ADDITIONAL WORKS EXECUTED BY THE CONCESSIONAIRE BY MUTUAL AGREEMENT BETWEEN THE PARTIES 6.33. Additional Works may be contracted and executed by the CONCESSIONAIRE,

in case of mutual agreement between the Parties, with respect to the performance of the Additional Works, in the price of them, without exceeding the percentage mentioned in Clause 6.32 and in the payment mechanism. In this case, the investments of the Additional Works and payment for the supervision of these works in favor of the REGULATOR, shall be borne by the CONCESSIONAIRE using the resources of the GRANTOR. If it be the case, prior to the execution of the Additional Works, these must have the statement of feasibility within the framework of the National System of Public Investment (SNIP) or have an equivalent status within the framework replacing the SNIP.

Once the execution of the Additional Works has been decided, the corresponding addendum shall be signed, by following the procedure indicated in CHAPTER XIX of the Contract and complying with the provisions of the Applicable Laws and Regulations. For the acceptance of the Additional Works executed by the CONCESSIONAIRE, the procedure established in Clauses 6.21 to 6.29 of the Concession Contract shall be followed.

6.34. The GRANTOR or the CONCESSIONAIRE may request the execution of the

Additional Works up to two (2) years before the end of the Concession. For this purpose, one of the Parties shall send to the other Party, with copy to the REGULATOR, a request of performance of Additional Works.

6.35. The volumes of Additional Works and their value without exceeding the

percentage indicated in Clause 6.32, shall be determined by common agreement between the CONCESSIONAIRE and the GRANTOR, prior opinion of the REGULATOR. For their execution, the GRANTOR shall require a Performance Bond of Execution of Additional Work and shall assess the need to request the CONCESSIONAIRE to increase the Social Capital indicated in Paragraph b) of Clause 3.5.

The payment mechanism shall be determined by agreement between the parties.

ADDITIONAL WORKS DIRECTLY EXECUTED THE GRANTOR 6.36. Where there is no agreement between the CONCESSIONAIRE and the

GRANTOR for the execution of Additional Works, the GRANTOR shall convene an administrative selection procedure for contracting their execution. Before that, these Additional Works must have the statement of feasibility within the framework of the SNIP or have an equivalent status within the framework replacing the SNIP in accordance with the current legislation on public works. In this procedure CONCESSIONAIRE may participate.

The technical and administrative conditions of the contract for the execution of the Additional Works shall be established by the GRANTOR in coordination with the CONCESSIONAIRE in order to guarantee the good execution of the contracted work and the continuity of the Execution Program of the CONCESSIONAIRE.

6.37. The contractor that is elected in the process shown in Clause 6.36 shall

undertake by contract, with restocking fee and payment of compensation, not to damage the Concession Assets under the responsibility of the


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CONCESSIONAIRE, for which it shall deliver to the GRANTOR a bank letter of guarantee in the amount determined by the latter, to ensure compliance with its obligations resulting from the contract signed for this purpose. In order to execute the letter of guarantee, in the event that the contractor causes damage to the existing Concession Assets under the responsibility of the CONCESSIONAIRE, the latter shall submit a duly substantiated report to the REGULATOR. Upon receipt of the report, the REGULATOR shall have a maximum period of fifteen (15) Days and if verifies the facts that caused the damage, shall proceed to the execution of the letter of guarantee.

6.38. In case the work has been executed by third parties, the GRANTOR shall deliver

it to the CONCESSIONAIRE, who shall receive it in a maximum period of fifteen (15) Calendar Days, prior signing of a certificate of delivery indicating the conditions of the work upon receipt. If there are no objections in relation to the executed work, the GRANTOR shall be responsible for demanding their correction.

CONSERVATION OF ADDITIONAL WORKS 6.39. The CONCESSIONAIRE shall be responsible for the Conservation of the

Additional Works from their acceptance in case it has executed them or from the delivery of the GRANTOR and reception by the CONCESSIONAIRE in case they have been executed by third parties, for which the CONCESSIONAIRE shall propose the GRANTOR, with a copy to the REGULATOR, an annual Maintenance cost for these works (AMC), no later than thirty (30) Calendar Days from the receipt of such works. From the receipt of the proposal the GRANTOR shall have a maximum of thirty (30) Days to approve it, prior opinion of the REGULATOR, which shall issue its opinion within twenty (20) Days of the receipt of the proposal from the CONCESSIONAIRE.

Once the payment for the Maintenance of the Additional Work has been accepted, this amount shall be added to the AMPO until the Termination of the Concession, that is, during the years that the Maintenance of the Additional Work will be effectively executed.

In case a reduction in the cost of the maintenance generated by the Additional Work is verified, the GRANTOR prior opinion of the REGULATOR shall establish the corresponding compensation mechanism. Prior to the execution of such works, these shall also be declared feasible within the framework of the National System of Public Investment (SNIP) or have an equivalent status within the framework replacing the SNIP. In case the CONCESSIONAIRE does not accept the values established by the GRANTOR in the paragraphs prior to this clause, it shall then be defined according to the mechanism established in Clauses 6.28 and 6.29. Such procedure shall be applied whenever the need to preserve the Additional Works arises.


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COMMITMENT TO CONTRACTING LOCAL LABOR FOR THE EXECUTION OF THE REHABILITATION AND IMPROVEMENT AND INITIAL PERIODIC MAINTENANCE 6.40. The CONCESSIONAIRE agrees to make its best efforts so that for the execution

of the Rehabilitation and Improvement and Initial Periodic Maintenance it contracts directly, or through it or through the constructors, natural or legal persons resident in the places where the indicated interventions will be implemented, according to the specialization required by the type of work to be carried out.

NATIONAL OPTICAL FIBER BACKBONE 6.41. According to the provisions set forth in Law N° 29904 Law of Promotion of

Broadband and Construction of the National Optical Fiber Backbone, the CONCESSIONAIRE undertakes to supply and install ducts and cameras, in compliance with the requirements of said regulation in the Izcuchaca – Mayocc Subsection.

The technical information for the installation of ducts and cameras is included in

Appendix 10 of ANNEX I of the Contract.

ROAD SAFETY WORKS 6.42. The GRANTOR with the technical opinion of the REGULATOR, may decide the

execution of Road Safety Works, which shall be different from those provided for in ANNEX I, Section 3, paragraph 8.6. The execution of such work shall comply with the provisions in Clause 6.32 to 6.38, as appropriate.

CRITICAL SECTOR 6.43. Critical Sector

Road sector that has been damaged by the weather, nature or other factors different from the normal use of the road infrastructure.

6.44. The objective criteria for its determination are the following:

a) During the formulation of the studies, execution of interventions of IPM and R&I: sections where the functionality and completeness of the Concession Area is lost, due to the weather, nature or other factors different from the normal use of the road infrastructure.

b) During the conservation of the road:

i. That the sector to be evaluated does not meet the service levels established in the Concession Contract.

ii. That the Critical Sector is not originated in inappropriate maintenance. iii. That the Critical Sector is not originated in a construction defect.

6.45. The following shall be taken into account for its approval:

Critical and/or vulnerable sectors shall be approved by the GRANTOR, prior receipt of the Technical Opinion of the REGULATOR, which shall include, among others, the qualification as critical sector based on the indicated objective criteria. This report shall also consider the nearest location for dumps, quarries and water sources, in addition to the cause that originated the problem.


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6.46 Once the critical sector is identified, the CONCESSIONAIRE shall execute the

definitive studies to solve the problems arisen in those sectors. The execution of these interventions is ruled by clauses 6.32 to 6.38., which state their treatment as Additional Works.

CHAPTER VII: CONSERVATION OBLIGATIONS OF THE CONCESSIONAIRE 7.1. The CONCESSIONAIRE to make the Conservation of the Concession Assets

that has received from the GRANTOR, from their reception until the date of Termination of the Concession, as well as regarding other Concession Assets incorporated to the Concession.

The obligation of the CONCESSIONAIRE is to maintain the Service Levels established in the Contract, which shall be maintained throughout the Exploitation stage within the parameters indicated in ANNEX I. From the Takeover of the Subsections where the Rehabilitation and Improvement and the Initial Periodic Maintenance will be executed until the commencement of each one of the interventions, the CONCESSIONAIRE shall carry out the corresponding Routine Maintenance.

7.2. The CONCESSIONAIRE shall carry out the Conservation works for the infrastructure, including the security tasks that are necessary to reach and maintain the Service Levels established in ANNEX I of this Contract.

7.3. The execution of tasks for Road Conservation shall also comply with the

Applicable Laws and Regulations on road maintenance as long as these do not oppose to the provisions in ANNEX I.

The tasks of Conservation to be carried out by the CONCESSIONAIRE in the different Subsections shall be always adjusted so as to reach and ensure the Service Levels required in ANNEX I, with the purpose of providing an optimal service to the user. The list and classification of the activities for Road Conservation are included in the General Technical Specifications for the Conservation of Highways, approved by the Ministry of Transportation and Communications through Directorial Resolution Nº 051-2007-MTC of August 29, 2007 or regulation that replaces it.

SUPERVISION OF THE CONSERVATION 7.4. The REGULATOR shall carry out the technical inspection actions under its

responsibility for the development of the Conservation tasks outlined in this Section of the Contract.

7.5. The CONCESSIONAIRE shall give to the REGULATOR, or the person appointed

by the latter, free access to the Concession Area to carry out its tasks without obstacles.


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CONSERVATION PROGRAMS 7.6. The obligation undertaken by the CONCESSIONAIRE carries the responsibility

of defining the techniques, procedures and chance of the Conservation works. To that end, within the time limits set out in Annex I, the CONCESSIONAIRE shall submit to the REGULATOR with a copy to the GRANTOR, a referential Conservation program. This plan shall be approved by the REGULATOR within a period of twenty (20) Days from its date of submission.

In case it is not approved, the CONCESSIONAIRE shall submit again the referential Conservation program, for which the same periods, indicated in the previous paragraph shall govern. The program shall include the description and justification of the policies used, the schedule of the operations to perform, the measurement of levels on which it is based and its general technical justification, all this according to the provisions of ANNEX I of the Contract. The program shall ensure the traffic flow in the terms of Clause 6.11. The referential Conservation program may be modified in case there are extraordinary circumstances, which shall be assessed by the REGULATOR and approved by the GRANTOR. The delay in the period of submission of the Referential Conservation Program of the Concession shall generate a penalty according to the Table 4 of ANNEX IX.

ROAD EMERGENCY

7.7. In the event of a Road Emergency, as described in CHAPTER I of the Contract, the CONCESSIONAIRE shall carry out, at its own expense, the works necessary to recover the Passage of the road in the shortest possible time. This obligation shall be executed without considering the extent of the event. The valuation of the works in this stage shall be by applied inputs (Materials, labor and equipment), with the conformity of the REGULATOR.

Furthermore, the CONCESSIONAIRE, if necessary, shall repair the damage caused until the Service Levels are recovered, according to ANNEX I. The activities to achieve what is described above shall be covered by the funds of the Road Emergencies account of the Management Trust to compensate the CONCESSIONAIRE for the expenses incurred. The use of the Road Emergencies account of the Management Trust requires the approval of the GRANTOR, with the favorable opinion of the REGULATOR. In case the funds available in the Road Emergencies account of the Management Trust are not sufficient, the GRANTOR shall cover the difference with its own resources.

To consider a removal of landslides as Road Emergency, its volume shall exceed 200 m3 per event.

7.8. The CONCESSIONAIRE shall report to the GRANTOR and the REGULATOR of the measures taken, within two (2) Calendar Days from the date the emergency was verified. If the emergency measures taken by the CONCESSIONAIRE


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require to be reinforced with definitive measures aimed at recovering the Service Levels as indicated ANNEX I, within a period not longer than one hundred and eighty (180) Calendar Days of the communication of the emergency to the GRANTOR, the CONCESSIONAIRE shall submit to the GRANTOR with a copy to the REGULATOR a technical report which must contain the respective budget, detailing the definitive measures to be taken. This technical report may also be required by the GRANTOR or REGULATOR, prior opinion of the Party not originating the requirement. The foregoing does not limit the responsibility of the CONCESSIONAIRE to recover the Passage in the shortest time possible as indicated in Clause 7.7.

To this effect, within a period of fifteen (15) Days of the receipt of the opinion of the REGULATOR, which will have a maximum period of ten (10) Days to issue its prior opinion, the GRANTOR shall approve the abovementioned technical report or may request the CONCESSIONAIRE to implement alternative actions or reformulate the proposals.

If the GRANTOR makes no comment within the specified period, the technical report submitted by the CONCESSIONAIRE shall be deemed not approved.

INFORMATION

7.9. The CONCESSIONAIRE shall provide the REGULATOR with reports on the development of the Conservation of the Concession for its evaluation under the procedure established in ANNEX I of the Contract. That document shall include information on Service Level results of the conservation activities undertaken. The cost for preparing the reports shall correspond to the CONCESSIONAIRE, according to the format approved by the REGULATOR.

The delay in the submission of Reports related to the development of the Conservation shall generate a penalty according to Table 4 of ANNEX IX.

CHAPTER VIII: EXPLOITATION OF THE CONCESSION RIGHTS AND DUTIES OF THE CONCESSIONAIRE 8.1. The Exploitation of the Subsections of the Concession by the

CONCESSIONAIRE is a duty, to the extent that the CONCESSIONAIRE must comply with certain parameters, levels, capacity and others associated to the investment, as well as with standards of the Service Levels inherent to the Exploitation of Subsections, provided for in this Contract.

The CONCESSIONAIRE shall, within the limits of the Contract, be responsible for the acts of omission and/or negligence of the personnel in charge of the Operation of the road or of the contractors that the CONCESSIONAIRE decides to hire.

ORGANIZATION OF SERVICES 8.2. The CONCESSIONAIRE is responsible for designing and managing the Services

that will be provided to the users of Subsections, according to the parameters established for such purpose in the Bidding Terms and Conditions and the Concession Contract.


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SUPERVISION OF EXPLOITATION 8.3. The REGULATOR shall perform the technical supervision under its responsibility

for the development of the Exploitation tasks of the Concession indicated in this CHAPTER of the Contract.

The REGULATOR shall verify the compliance with the obligation of the CONCESSIONAIRE to maintain certain parameters, levels, capacity and others, as well as standards and Service Levels inherent to the Exploitation of Subsections, provided for in this Contract.

8.4. The CONCESSIONAIRE shall provide the cooperation required for the

supervision of the Exploitation. INFORMATION 8.5. The CONCESSIONAIRE is obliged to provide the REGULATOR with the

following:

a) Reports related to the development of the Exploitation of the Concession. The cost of the preparation of reports shall be borne by the CONCESSIONAIRE according to the format approved by the REGULATOR. Without prejudice to the obligation to submit other reports mentioned in the Contract, the basic periodic information to be provided by the CONCESSIONAIRE is subject to the provisions set forth in the General Supervision Regulation, approved through Resolution of the Steering Council Nº 024-2011-CD-OSITRAN, or regulation that replaces it. The delay in the delivery of the indicated reports shall result in the application of a penalty according to Table Nº 5 of ANNEX IX.

b) From the Takeover of the Subsections indicated in Clause 5.10, of the completion of the Rehabilitation and Improvement and Initial Periodic Maintenance, as appropriate, quarterly reports related to the surface status and structural condition of the road and the activities executed that have allowed to comply with the Service Levels of the Concession, according to the provisions of ANNEX I, the REGULATOR shall approve those reports within a period of twenty (20) Days of receipt or request the correction of objections prior to the approval, according to the provisions of ANNEX I, in which case the REGULATOR shall make the approval within seven (7) Days of the date the objections were corrected. The REGULATOR shall grant a term to the CONCESSIONAIRE to correct the objection. This term shall be established based on its magnitude.

c) From the Takeover of the Subsections indicated in Clause 5.10, of the

completion of the Rehabilitation and Improvement and Initial Periodic Maintenance, as appropriate, annual reports related to the evaluation and determination of Service Levels of the Concession. Certificates of evaluations, essays, tests, analysis, lists of measurements, methodology of data processing, designs used, graphics and other elements shall be submitted, in accordance with the provisions in ANNEX I. The REGULATOR shall approve those reports within a period of thirty (30) Days of receipt or request the correction of objections prior to the approval, according to the provisions of ANNEX I, in which case the REGULATOR shall make the approval within twenty (20) Days of the date the objections were corrected.


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The REGULATOR shall grant a term to the CONCESSIONAIRE to correct the objection. This term shall be established based on its magnitude.

The REGULATOR may perform the tests, essays and, in general, measurements of the Service Levels when deemed convenient, with the purpose to verify the minimum values established in the Concession Contract, as a result of the verification inspections made of the status of the infrastructure.

RIGHTS AND CLAIMS OF USERS 8.6. Rights inherent to Users shall basically consist of the use of the road, the

possibility to access all the Mandatory and Optional Services of the Concession, to receive a Service as provided for in the Contract and to be informed about the characteristics thereof, and others foreseen by the Applicable Laws and Regulations and others that may be established in the Contract and Regulatory Rules.

8.7. The CONCESSIONAIRE shall open a book of suggestions and complaints or

implement the mechanism established in Clause 6.9 in each toll unit, for the purpose of registering and processing all the complaints submitted by the Users of the Subsections, as set forth in the Regulation of Management of Complaints and Resolution of Disputes of OSITRAN.

8.8. Once the complaint is submitted, the CONCESSIONAIRE (entity providing the

public service) shall make an announcement within the period provided for in the Regulation of Management of Complaints and Resolution of Disputes of OSITRAN or in its own Regulation on Complaints, if applicable. In case the user does not agree with the resolution of the complaint, it may bring the administrative resources provided by the legal system.

INTERNAL REGULATIONS 8.9. The CONCESSIONAIRE shall inform the REGULATOR about the internal

regulations indicated in the following Subparagraphs, within a term of ninety (90) Calendar Days of the Signing Date of the Contract:

a) Operative procedures, including:

i) Procedures for the collection of toll units, ii) Procedures for supervision and quality control.

b) Handling of accidents and emergencies. The enumeration of these regulations does not limit the power of the REGULATOR to request other documents and information of a similar nature related to the regulation and control of the concession infrastructure. The CONCESSIONAIRE shall incorporate in the formulation of its Internal Regulations the applicable principles according to the provisions of the Regulatory Rules.

In case of doubt or discrepancy, the Regulatory Rules shall prevail. The delay in the delivery of the internal regulations shall result in the application of a penalty according to the provisions of Table Nº 5 of ANNEX IX.


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START OF THE EXPLOITATION

8.10. The start of the Exploitation of the Concession shall occur the day after the date of signing of the first Certificate of Partial Delivery of Assets, referred to the delivery in favor of the CONCESSIONAIRE, of the existing toll units, event that will initiate the obligations of the toll administrators established by the Applicable Laws and Regulations and the right to collect the Rates indicated in Clause 9.4. This collection will comply with the treatment provided for in, Appendix 2 of ANNEX XI, for which the CONCESSIONAIRE shall have necessarily complied with keeping in force the Performance Bond of the Concession Contract, the insurance policies required by the Contract and having formed the Management Trust referred to in ANNEX XI.

If for causes not attributable to the CONCESSIONAIRE any of the assets listed in the previous paragraph cannot be delivered, the Certificate of Partial Delivery of Assets shall record the situation; nevertheless, in spite of this, the Exploitation shall be initiated.

8.11. If after the previous Clause has been complied with, the CONCESSIONAIRE has not commenced the Exploitation of the Concession, the penalty specified in Table Nº 5 of ANNEX IX shall be applied.

8.12. The Mandatory Services that the CONCESSIONAIRE shall implement or provide will be the following:

a) Services that will be implemented for free and according to the regulation indicated in this Clause:

i) Emergency Center Service that will operate twenty-four (24) hours a

day.

The CONCESSIONAIRE shall handle the requests of emergencies and/or accidents that have occurred in any Subsection of the Concession, through the Emergency Center, informing about the same or transferring the requests to the National Police of Peru, a hospital, medical center, polyclinic or similar, insurance company, etc. as the case may be.

ii) Real Time Emergency Communication System, whose terminals shall

be located at a maximum distance of ten (10) kilometers from each other. This system shall at least allow making free calls exclusively to the Emergency Center.

iii) Ambulance service for injured persons and transfer to a hospital,

medical center, or polyclinic, as the case may be.

iv) Service of transfer of vehicles that have been damaged on the road, up to the nearest service station, not further than one hundred (100) kilometers.

v) An office for the use of the National Police of Peru, adjacent to the

location areas of each toll unit, with basic equipment and electricity, to support the monitoring and control works (total built area for each office not less than 25 m2, including bathroom and kitchen). The CONCESSIONAIRE shall bear the cost of water, power and telephone


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services, subject to the technical facilities in the area, up to an amount of One Thousand American Dollars (US$ 1,000.00) per month for each office of the National Police.

vi) Toilets located in each toll unit, with the material necessary to offer an

adequate service to users.

b) It is an essential requirement for the application of the rate regime indicated in 9.4 c), that the stated indicated in a)i), a)ii), a)iii), a)iv),a)v) and a)vi) are in operation. Upon receiving of the existing toll units, the service indicated in a) iii) and a) iv) shall be temporarily provided. Likewise, within ninety (90) Calendar Days of the date of Commencement of the Exploitation, the definitive service indicated in a) vi) shall be in operation. As the CONCESSIONAIRE receives from the GRANTOR the Sub Sections of the road in which one or more toll units is considered, these shall have, within a period of 90 Days, the services specified in a)i), a)ii), a)iii), a)iv), a)v), and a)vi). When the Subsections in which the CONCESSIONAIRE has executed the Rehabilitation and Improvement and/or the Initial Periodic Maintenance are authorized to be commissioned as indicated in Clause 6.22 and following, these shall have the services indicated in a)i), a)ii), a)iii), a)iv), a)v), and a)vi).

c) For the provision of the Mandatory Services, the CONCESSIONAIRE may

opt for direct provision, lease of equipment or outsourcing. If deemed convenient, and where appropriate, part of the Mandatory Services may be consolidated in a single physical location, taking into account event the toll unit. In any case the CONCESSIONAIRE shall be solely responsible for the Mandatory Services to be provided timely and efficiently, according to the provisions of ANNEX I.

Failing to comply with the implementation of the mandatory services shall result in the application of a penalty according to Table Nº 5 of ANNEX IX of the Contract.

OPTIONAL SERVICES

8.13. The Optional Services that the CONCESSIONAIRE has incorporated during the term of the Concession, may be carried out in lands considered as Optional Service Areas, according to the applicable rules and regulations.

a) Optional services shall not be contrary to the morality, good manners or public order, observing the applicable regulations of the REGULATOR.

b) The provision of the Optional Services shall be approved by the GRANTOR prior opinion of the REGULATOR.

The implementation of the facilities for the provision of the Optional Services is for the account and on behalf of the CONCESSIONAIRE. The provision of the Optional Services shall require that the Parties agree the method of profit sharing.


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c) The income obtained by the Optional Services shall not be considered for purposes of guarantees in favor of the Allowed Creditors.

LEVEL OF SATISFACTION OF THE USER 8.14. The CONCESSIONAIRE shall submit to the REGULATOR in March and

September every year, the results of an opinion poll of the Concession Users on aspects related to service satisfaction, carried out by a prestigious polling firm selected by the REGULATOR based on a topic that shall be presented by the CONCESSIONAIRE.

The results of such poll shall be submitted to the REGULATOR with a copy to the GRANTOR within thirty (30) Calendar Days from its completion.

Polls shall comprise at least the following Service parameters and conditions: general road condition, treatment of the personnel in charge of toll collection, road signaling, safety level in the highway, quality of the provision of mandatory services, waiting time in the queue of the toll units, etc.

CHAPTER IX: TOLL AND RATE

TOLL AND RATE

9.1. Rate collection shall be made through the toll units that will be operated by the CONCESSIONAIRE, who shall collect the rate according to Clause 9.4. The collection of the rates for amounts higher that hose authorized shall be penalized according to Table Nº 5 of ANNEX IX.

a) On the Start Date of Exploitation the CONCESSIONAIRE shall receive the existing toll units (Table Nº 9-1), to operate them under the terms indicated in the following Clauses.

Table Nº 9-1: Existing Toll Units

DENOMINATION ROUTE SUBSECTION LOCATION UP Pacra PE-28A San Clemente (Emp.

PE-1S) - Puente Choclococha

Km 73.341

UP Rumichaca PE-28A Puente Choclococha - Ayacucho (Emp. PE-28A)

Km 196.921

UP Socos PE-28A Puente Choclococha - Ayacucho (Emp. PE-28A)

Km 317.942

UP Chacapampa PE-3S Huayucachi - Imperial Km 152.800

b) In the cases indicated in Subparagraph c) of clause 9.4, the

CONCESSIONAIRE undertakes to construct the new toll units (Table Nº 9-2), which will be operated under the terms indicated in the following Clauses.


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Table Nº 9-2: New Toll Units

DENOMINATION ROUTE SUBSECTION LOCATION UP La Esmeralda PE-3S Izcuchaca - Mayocc Km 233.100

UP Huanta PE-3S Mayocc - Huanta Km 313.500

UP Ocros PE-3S Ocros - Chincheros Km 499.078

UP Chicmo PE-3S Santa María de Chicmo – Andahuaylas (Emp. PE-30B)

Km 624.725

UP Auquibamba PE-3S Dv. Sahuinto (Emp PE-3S) – Puente Sahuinto

Km 740.833

The location is referred to the new monumentation and the accurate location of the toll units indicated in table 9-2 shall be coordinated with the GRANTOR.

Subsequently, the CONCESSIONAIRE and the GRANTOR may agree to modify the location of toll units, for which purpose the CONCESSIONAIRE shall require the prior opinion of the REGULATOR upon the approval of the GRANTOR, in which case the proposer of the amendment shall bear the costs required. The accurate location or any relocation shall be made as close as possible to that contained in the aforementioned Table. The CONCESSIONAIRE shall take the necessary precautions to obtain the required areas and for the construction of new Toll Units, so that at the time of commissioning of each Subsection, the Toll Unit associated to the corresponding subsections is built and equipped. At the completion of the Initial Periodic Maintenance all toll Units shall be implemented, except for that associated to the subsection where the Rehabilitation and Improvement will be executed. Failing to comply with this obligation for causes attributable to the CONCESSIONAIRE shall imply the application of the penalty indicated in ANNEX IX. After the CONCESSIONAIRE has built each new Toll Unit, it shall request the GRANTOR to adapt the Resolution of authorization of operation of the new premise. The impossibility to build and/or operate one or several toll units due to causes not attributable to the CONCESSIONAIRE, shall not be grounds of limitation for the GRANTOR to comply with its commitments.

c) If the CONCESSIONAIRE is unable to exploit the toll units due to acts of

social protest that prevent the operation thereof, it shall communicate in writing to the GRANTOR of this situation so that this is considered a force majeure event, in accordance with Subparagraph a) of Clause 17.1. Also, for this ground, the GRANTOR with the opinion of the REGULATOR may change the location of the toll unit, for which purpose the GRANTOR will assume the cost such modification requires.


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d) Without prejudice to the aforementioned, after the verification by the GRANTOR, it shall proceed to restore the social order with the purpose to allow the CONCESSIONAIRE to comply with the indicated obligation.

e) The GRANTOR shall exhaust efforts so that the CONCESSIONAIRE may comply with the aforementioned obligation and in case the referred social resistance persists for more than six (6) months, the GRANTOR shall declare that there is a situation of social upheaval, and therefore, the existing insurance for such purpose may be used.

9.2. The CONCESSIONAIRE shall make the collection of the Rate. Each User that uses the Subsections of the Concession shall be required to pay the Rate according to the category of the vehicle, according to the specification in Clause 9.4. Vehicles used for emergency services such as ambulances, fire trucks or vehicles of the National Police, as well as military vehicles in commission, maneuvers, exercises or convoys and vehicles of the Peruvian Red Cross that conduct humanitarian activities shall be exempted from the payment of the rate in accordance with the provisions of Decree Law Nº 22467, Law Nº 24423 and Applicable Laws and Regulations.

9.3. The collection of the Rate shall be for right of way, which implies that it shall be

collected from the User of the Subsections of the Concession that is not exempted from payment for the right of way in the toll units. The CONCESSIONAIRE may change the technology used for the collection of the Rate, prior communication to the REGULATOR and provided this technology allows it to comply with the standards of customer service time indicated in ANNEX I.

9.4. The rate regime is the group of rules contained in the Contract that regulates the

Rate that the CONCESSIONAIRE shall be authorized to collect during the Exploitation of the Concession, according to the following:

a) Rates shall be in force after the CONCESSIONAIRE has complied with the

publication of the toll rate list, according to Article 33° of the General Regulation of Rates of OSITRAN - RETA.

b) From the date of commencement of the Exploitation after the requirement

specified in subparagraph a) has been complied with and until before the increase noted in the following paragraphs of this Clause occurs in the existing toll units, the CONCESSIONAIRE shall collect the Toll rates in force for light vehicles, adding VAT and any other tax that may be generated. The result shall be rounded downward to five (5) cents of Nuevo Sol. For heavy vehicles, Toll rates in force shall be collected by axle, which will be multiplied by the number of collectible axles. VAT and other taxes that may be generated shall be added to result, which will be rounded downward to five (5) cents of Nuevo Sol.

c) From the reception by the CONCESSIONAIRE of the Subsections

intervened by the GRANTOR and/or the acceptance of the Rehabilitation and Improvement and/or Initial Periodic Maintenance, authorized by the GRANTOR to be commissioned, according to Table Nº 9-3 of subparagraph f) below, as indicated in Clauses 6.22 to 6.29, having complied with the


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specifications in Clause 8.12 and after fulfilling the requirement of subparagraph a), the CONCESSIONAIRE shall collect in the toll units a Toll of One American Dollar and Fifty Cents (US$ 1.50) plus the amount corresponding to the VAT and any other applicable tax, by direction of travel. In the case of the existing Toll units, when these conditions are given, the Toll shall be readjusted to One American Dollar and Fifty Cents (US$ 1.50) plus the amount corresponding to the VAT and any other applicable ta.

All Rates shall be collected in Soles, using the Exchange Rate that corresponds to the last business day of the month prior to the entry into force of the new Rate.

d) In the case of the indicated increase, the CONCESSIONAIRE shall apply

the following rules:

Light Vehicles shall pay the Toll determined, adding VAT and any other tax that may be generated. The result shall be rounded downward to five (5) cents of Nuevo Sol.

Heavy Vehicles shall pay the Toll determined per axle, multiplied by the number of collectible axles. VAT and other taxes that may be generated shall be added to result, which will be rounded downward to five (5) cents of Nuevo Sol.

e) In the subparagraphs above, where appropriate, if the coin in force is greater

or lesser than five (5) cents of Sol, the rounding shall be made based on this coin.

f) For purposes of collection of the Rate or its increase, the commissioning of

Subsections associated to the corresponding toll unit shall be taken into account according to the specification made in table Nº 9-3 and in ANNEX XII: Activation and conditions for the collection in the Toll Units of the Concession.

Table N° 9-3: Subsections commissioned prior to the collection of

rates or increase

Toll units Subsection Length of

Subsection km

Length

UP Chacapampa (In operation)

Dv. Huancayo – Pte. Chanchas

3.834

64.440 Pte. Chanchas - Huayucachi 2.820

Huayucachi - Imperial 26.567

Imperial - Izcuchaca 31.219

UP La Esmeralda Izcuchaca - Mayocc 116.863 116.863

UP Huanta

Mayocc - Huanta 32.756

125.009 Huanta - Ayacucho (Emp PE-28A)

42.253

Km. 0+000 (Ayacucho) - Abra Tocto

50.000

UP Ocros Abra Tocto - Ocros 48.800

104.000 Ocros - Chincheros 55.200

UP Chicmo Chincheros - Santa María de Chicmo

66.022 86.362


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Toll units Subsection Length of

Subsection km

Length


20.340

UP Auquibamba


54.307

130.757 Dv. Kishuara (Emp PE-3SE) - Dv. Sahuinto (Emp PE-3S)

62.711

Dv. Sahuinto (Emp PE-3S) - Puente Sahuinto

13.739

UP Pacra (In operation)


163.810 163.810

UP Rumichaca (In operation) Puente Choclococha -

Ayacucho (Emp. PE-28A) 172.066

83.261

UP Socos (In operation)

88.805

9.5. All Tolls shall be readjusted ordinarily and shall start to be collected by the

CONCESSIONAIRE from January 20 of the Calendar Year following the calendar month of acceptance of all the interventions, which include the Rehabilitation and Improvement, Initial Periodic Maintenance under responsibility of the CONCESSIONAIRE and the interventions in the Subsections under responsibility of the GRANTOR. This ordinary readjustment shall be made every twelve (12) months from the abovementioned date, and shall be made according to the following Toll adjustment method:

a) In toll units where its Base Toll is One American Dollar and Fifty Cents (US$

1.50):

0

00

%50_%50_ TCIPC

IPCBaseTollTC

CPI

CPIBaseTollToll i

i

i

i

Where: Toll_Base: For the first ordinary readjustment it shall be equal to US$ 1.50.

From the second ordinary readjustment it shall be the amount of the Toll resulting from the first ordinary readjustment converted to Dollars at the Exchange Rate of the date of the first adjustment

Being i the last Business day of the month immediately preceding January 20 of the Calendar Year in which the rate readjustment is made.

CPI: Consumer Price Index of United States of America, published by

the Bureau of Labor Statistics. CPIi: Registry of this index of the preceding month available on day i CPI0: For the first ordinary readjustment, the base index shall correspond to the

index registered in the month of submission of the economical proposal of the bidders. From the second ordinary readjustment, the base index shall correspond to the index registered in the month of the first ordinary readjustment.

IPC: Monthly Consumer Price Index of Metropolitan Lima, published by the National Institute of Statistics and Informatics (INEI).


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IPCi: Registry of price index of the previous month available of day i. IPC0: For the first ordinary readjustment, the base index shall correspond to the

index registered in the month of submission of the economical proposal of the bidders. From the second ordinary readjustment, the base index shall correspond to the index registered in the month of the first ordinary readjustment.

TC: Exchange Rate, as defined in Clause 1.11.87 of the Contract.

TCi: Registry of Exchange Rate corresponding to day i. TC0: For the first ordinary readjustment, the base index shall correspond to the

Exchange Rate registered on the last business day of the month of submission of the economical proposal of the bidders. From the second ordinary readjustment, it shall correspond to the Exchange Rate registered on the date of the first ordinary readjustment.

The first ordinary readjustment shall not be higher than ten percent (10%) in relation to the Toll in force (in Soles).

b) In the event that within one (1) Calendar Year there is a variation of more than ten percent (10%) from the last ordinary readjustment, the REGULATOR shall carry out an extraordinary readjustment, within thirty (30) Calendar Days of its request by the GRANTOR, in which the Toll shall be determined by incorporating to the above formula, in the first component, the Exchange Rate of the Calendar Day in which the extraordinary readjustment occurs.

For the collection in the toll units, the Toll applicable in Soles, shall be multiplied by the number of collectible axles. The corresponding VAT and other taxes that may be generated shall be added to result, which will be rounded downward to five (5) cents of Sol. If the coin in force is greater or lesser than five (5) cents of Sol, the rounding shall be made based on this coin.

c) Within the framework of the ordinary readjustment set forth in this Clause,

the Differentiated Rates, if any, shall be readjusted by keeping the proportionality in relation to the Rate. For rounding purposes, provisions of the preceding paragraph shall be taken into account.

d) Based on the Differentiated Rates that the GRANTOR may grant during the

term of the Concession, it undertakes that the revenue from the Differentiated Rates does not generate an income above three percent (3%) in relation to total annual revenue collected in toll units.

e) The readjusted Rates shall be in force after the CONCESSIONAIRE has

complied with the publication of the toll rate list, according to Article 33° of the General Regulation of Rates of OSITRAN - RETA.

CHAPTER X: ECONOMIC-FINANCIAL REGIME COFINANCING 10.1. The resources necessary for Co-financing shall be effective through the Ministry

of Transportation and Communications, charged to the resources of its budget, according to the following procedure:


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a) The resources necessary for the payment of the Rehabilitation and Improvement shall be foreseen in the Budget of the Public Sector for the corresponding fiscal year. To this end, the GRANTOR undertakes to schedule each year the budget items necessary to pay the entire Rehabilitation and Improvement, taking into account the provisions of the annual budget Laws, as well as Law Nº 28411 – General Law of the National Budget System.

b) The resources necessary for the payment of the APIPM and AMPO shall be

foreseen in the Budget of the Public Sector for the corresponding fiscal year. To this end, the GRANTOR undertakes to schedule each year the budget items necessary to pay the APIPM y AMPO, taking into account the provisions of the annual budget Laws, as well as Law Nº 28411 – General Law of the National Budget System.

c) The costs of Rehabilitation and Improvement, the Initial Periodic

Maintenance and Operation and Maintenance incurred by the CONCESSIONAIRE shall be covered with the PRI, APIPM and AMPO, respectively, except in specific cases foreseen in this Contract.

d) The specific regulation about the PRI, APIPM and AMPO is found in ANNEX

XI: Financial ANNEX.

e) The GRANTOR shall deposit in the Management Trust, as indicated in ANNEX XI, the amount corresponding to the Co-financing including the VAT.

f) All the requirements of the Clauses that correspond to the obligations of the

CONCESSIONAIRE shall remain without effect in case the GRANTOR has not complied with the deposit of the Co-financing in the Management Trust for the payment of the PRI, APIPM and AMPO for more than one hundred and eighty (180) Calendar Days following such obligation becomes enforceable, in which case the CONCESSIONAIRE may request the termination of the Contract.

OTHER INCOME 10.2. Additional income of the CONCESSIONAIRE shall be income received as a

result of the exploitation of Optional Services.

In case of Optional Services by an Affiliated, Subsidiary or Related company or third parties not linked to the CONCESSIONAIRE, income of the CONCESSIONAIRE shall be income received for allowing access to the areas where those services shall be rendered. In any of the cases above, the liability of the CONCESSIONAIRE is not limited by the provision of these services.

PAYMENTS OF THE CONCESSIONAIRE FOR SUPERVISION OF THE REHABILITATION AND IMPROVEMENT AND INITIAL PERIODIC MAINTENANCE

10.3. The CONCESSIONAIRE shall make the payments required by the supervision

contracted by the REGULATOR, exclusively for the purposes of this Contract, for an amount equal to six percent (6%) of the proposal for Rehabilitation and Improvement plus VAT, and US$ 20’099,412.81 including VAT for the Initial Periodic Maintenance. The amounts shown represent the total amount for all


72

items related to the supervision of the Rehabilitation and Improvement and Initial Periodic Maintenance. In order to provide the REGULATOR with funds to start the process for contracting the supervisor for the Rehabilitation and Improvement at the date of signing of the Concession Contract, the CONCESSIONAIRE shall deliver a cashier’s check in favor of the REGULATOR for the start of the supervisor procurement process, for an amount of two million five hundred thousand American Dollars (US$ 2’500,000), which will constitute a payment on account for the concept of supervision and shall be paid by cashier's check on the Signing Date of the Concession Contract. The corresponding balance to complete the previously indicated percentage of 6% shall be paid by the CONCESSIONAIRE in four (4) equal semiannual installments. The first installment shall be paid no later than ten (10) Calendar Days from the start of execution of the Rehabilitation and Improvement. The three (3) remaining installments with semiannual maturities. In order to provide the REGULATOR with funds to start the process for contracting the supervisor for the Initial Periodic Maintenance at the date of signing of the Concession Contract, the CONCESSIONAIRE shall deliver a cashier’s check in favor of the REGULATOR for the start of the supervisor procurement process, for an amount of one million five hundred thousand American Dollars (US$ 1’500,000), which will constitute a payment on account for the concept of supervision of the Initial Periodic Maintenance. The corresponding balance to complete the previously indicated percentage of 6% shall be paid by the CONCESSIONAIRE in four (4) equal semiannual installments. The first installment shall be paid no later than ten (10) Calendar Days from the start of execution of the Initial Periodic Maintenance. The three (3) remaining installments with semiannual maturities. In case longer execution periods are generated for causes attributable to any of the parties (delay in the delivery of lands, extension of term in the execution of works, design errors, and the like), resulting in higher costs in the Work Supervision, these shall be assumed by the party generating such contingency.

FINANCIAL-ECONOMIC BALANCE 10.4. The Parties declare their commitment to maintain throughout the duration of the

Contract the economic-financial balance thereof, for which it is stated that this Contract is in a situation of economic-financial balance in terms of rights, responsibilities and risks assigned to the Parties.

10.5. This Contract provides a mechanism for restoring the economic-financial balance

the CONCESSIONAIRE and the GRANTOR are entitled to in case the Concession is significantly affected, solely due to changes in the Applicable Laws and Regulations, to the extent that these changes are directly related to economic and financial aspects related to variation in income or costs incurred by the CONCESSIONAIRE.

The restoring of the economic-financial balance may be invoked by some of the Parties for consideration and shall be based on the Profits and Loss Statement of the financial year audited of the CONCESSIONAIRE where variations of


73

income or costs referred to above are verified. Notwithstanding the foregoing, the GRANTOR may request further information to support the variations noted.

The restoring of the economic-financial balance shall always proceed provided the corresponding adjustment has not been made in accordance with ANNEX XI, Appendix 7 of this Contract for the same reasons.

10.6. The REGULATOR shall establish the magnitude of the imbalance according to

the difference between:

a) The results before taxes resulting from the fiscal year; and b) The recalculation of the results before taxes of the same fiscal year applying

the values of the income or costs that correspond to the moment prior to the modification that occurs as a consequence of the changes referred to in this Clause.

For such purpose, the GRANTOR may request the CONCESSIONAIRE the information considered necessary about the income and costs that have been affected by the changes in the Applicable Laws and Regulations. If the imbalance is produced in several periods, without it having been restored, the difference between a) and b) shall be found cumulatively.

The percentage of imbalance is then found through the following expression: Percentage of imbalance = [Amount obtained in (a) – Amount obtained in (b)] [Amount obtained in (b)] If the percentage of imbalance, in absolute value, exceeds ten percent (10%) it shall be restored. If (b>a) a compensation shall be granted to the CONCESSIONAIRE equivalent to the difference of the amount obtained in b) less the amount obtained in a). If the imbalance affects the GRANTOR (b<a), the CONCESSIONAIRE shall grant a compensation equivalent to the difference of the amount obtained in a) less the amount obtained in b). When the Grantor invokes the restoration of the Financial Economic Balance, such compensation may be added or deducted, respectively, in the following installment of the AMPO, for the amount resulting excluding interest. In case that the CONCESSIONAIRE invokes the restoring of the Financial Economic Balance, the GRANTOR shall make the corresponding budget estimates in the budget for the next fiscal year so as to make the corresponding payment during the first five days of that year. If the amount obtained in b) is zero (0), to restore the economic financial balance only the difference in the amount obtained in (a) – the amount obtained in (b) shall be taken into account, without needing to calculate the aforementioned percentage of imbalance.

10.7. In the event that the CONCESSIONAIRE invokes the restoring of the economic-financial balance, the REGULATOR shall determine within the following thirty (30) Days, the provenance pursuant to the provisions of the preceding paragraphs. If so, the REGULATOR shall establish within a period of thirty (30) Days the amount payable in favor of the CONCESSIONAIRE, applying for this purpose the valuation criteria set out in this Clause and shall report the result to the GRANTOR, the same that will be paid by the latter in the opportunity indicated


74

in the preceding Clause. For any delay an interest equivalent to the LIBOR rate shall be recognized plus one percent (1%) on the unpaid balance for the days of the delay. In the event that the GRANTOR invokes the restoring of the economic-financial balance, the REGULATOR shall determine within the following thirty (30) Days, the provenance pursuant to the provisions of the preceding paragraphs. If so, the REGULATOR shall establish within a period of thirty (30) Days the amount payable in favor of the GRANTOR, applying for this purpose the valuation criteria set out in this Clause and shall report the result to the CONCESSIONAIRE, whose resulting amount shall be deducted from the following installment of the AMPO. The discrepancy regarding the amount of compensation due to the rupture of the economic-financial balance will be resolved by three (3) independent experts appointed in the same manner as provided for the appointment of arbitrators in CHAPTER XVIII of this Contract, and the other provisions of this Clause shall govern where relevant. This Clause shall not be deemed applicable for changes occurred as a result of provisions issued by the REGULATOR that establish infractions or sanctions, which are comprised in the Contract or that are a consequence of actions, acts attributable to or result from the performance of the CONCESSIONAIRE.

TAX REGIME OF THE CONCESSION 10.8. The CONCESSIONAIRE shall be subject to applicable national, regional and

municipal tax laws, and must comply with all obligations of tax nature that apply to the exercise of its activity. The CONCESSIONAIRE shall be obliged, in the terms indicated by the Applicable Laws and Regulation, to the payment of all taxes, levies and duties which apply, among others, to the Concession Assets or those assets built or incorporated into the Concession, whether such taxes are administered by the National, Regional or Municipal Government.

CHAPTER XI: GUARANTEES GUARANTEE OF THE GRANTOR 11.1 In accordance with the provisions of Subparagraph h) of Clause 3.4 the

GRANTOR grants in favor of the CONCESSIONAIRE the guarantee of the State of the Republic of Peru in support of the obligations, declarations and warranties of the GRANTOR established in the Concession Contract, which is not a financial guarantee.

GUARANTEES IN FAVOR OF THE GRANTOR

PERFORMANCE BOND OF EXECUTION OF REHABILITATION AND IMPROVEMENT AND INITIAL PERIODIC MAINTENANCE

11.2 To ensure the correct execution of the Rehabilitation and Improvement and Initial Periodic Maintenance, according to ANNEX 9 of the Bidding Terms and Conditions, the Final Engineering Studies and Environmental Management Instrument and the Technical Files. and to ensure payment of penalties and other sanctions as applicable, the CONCESSIONAIRE shall deliver to the GRANTOR a Performance Bond of Execution of Rehabilitation and Improvement in the


75

amount of Sixteen Million American Dollars (US$ 16’000,000) and a Performance Bond of Execution of Initial Periodic Maintenance in the amount of Twenty-Eight Million Four Hundred Thousand American Dollars (US$ 28’400,000), issued in favor of the GRANTOR. In case the REGULATOR proceeds with the execution of one of the guarantees, it shall pay to the GRANTOR the amount delivered by the respective banking company, international financial entity and/or insurance company.

11.3 These guarantees shall be several, unconditional, irrevocable, without benefit of

excussion or division and automatically enforceable, and shall be effective from the commencement of the Rehabilitation and Improvement and Initial Periodic Maintenance, up to two (2) years following the acceptance of the Rehabilitation and Improvement and Initial Periodic Maintenance, as appropriate.

11.4 Such guarantees shall be issued by a Banking Company, authorized as established in Listing 1 of ANNEX Nº 1 of the Bidding Terms and Conditions or by an Insurance Company authorized as established in List 3 of ANNEX Nº 1 of the Bidding Terms and Conditions. In case such guarantees are issued by an International Financial Entity authorized according to List 2 of ANNEX Nº 1 of the Bidding Terms and Conditions or any of its subsidiaries or branches, they shall necessarily be confirmed by a Banking Company authorized in accordance with List 1 of Annex Nº 1 of the Bidding Terms and Conditions.

Alternatively, a standby Letter of Credit may be accepted, which may take the

formalities used by the bank making the transaction, provided it meets the

requirements set out in the model given in ANNEX IV and is issued by a First

Class Foreign Bank and confirmed by a Banking Company in accordance with

List 1 of ANNEX Nº 1 of the Bidding Terms and Conditions.

11.5 Guarantees may be issued for annual periods, provided their renewal is made at

least thirty (30) Calendar Days before their due date.

Guarantees shall be returned to the CONCESSIONAIRE, provided that they have been renewed.

PERFORMANCE BOND OF THE CONCESSION CONTRACT 11.6 To ensure the correct and timely compliance with each and every one of the

obligations of the Concessionaire derived from the signing of the Contract, including the Rehabilitation and Improvement, Initial Periodic Maintenance and the payment of penalties not guaranteed with the Performance Bond of Execution of Rehabilitation and Improvement and Initial Periodic Maintenance, the CONCESSIONAIRE shall submit to the GRANTOR, on the Date of Signing of the Contract, a Performance Bond of the Concession Contract with the characteristics of several, unconditional, irrevocable, without benefit of excussion or division and automatically enforceable. In case the REGULATOR proceeds with the execution of the guarantee, it shall pay to the GRANTOR the amount delivered by the respective Banking Company, international financial entity and/or insurance company.

11.7 The Performance Bond of the Contract shall be valid from the Date of Signing of the Contract up to twelve (12) months after the completion of the term of the Concession. This guarantee may be issued for annual periods, provided its renewal is made at least thirty (30) Calendar Days before their due date.


76

Guarantees shall be returned to the CONCESSIONAIRE, provided that they have been renewed.

11.8 From the Date of Signing of the Contract, the guarantee shall be for an amount equivalent to 50% of the maximum AMPO determined by the State, which shall remain in force up to twelve (12) months after the termination of the Concession.

11.9 Such guarantee shall be issued by a Banking Company, authorized as established in Listing 1 of ANNEX Nº 1 of the Bidding Terms and Conditions or by an Insurance Company authorized as established in List 3 of ANNEX Nº 1 of the Bidding Terms and Conditions. In case such guarantee is issued by an International Financial Entity authorized according to List 2 of ANNEX Nº 1 of the Bidding Terms and Conditions or any of its subsidiaries or branches, it shall necessarily be confirmed by a Banking Company authorized in accordance with List 1 of Annex Nº 1 of the Bidding Terms and Conditions. Alternatively, a standby Letter of Credit may be accepted, which may take the

formalities used by the bank making the transaction, provided it meets the

requirements set out in the model given in ANNEX III and is issued by a First

Class Foreign Bank and confirmed by a Banking Company in accordance with

List 1 of ANNEX Nº 1 of the Bidding Terms and Conditions. EXECUTION OF GUARANTEES 11.10 Guarantees indicated in Clauses 11.2 y 11.6 may be executed by the

REGULATOR totally or partially by any of the following grounds:

a) In the cases expressly set out in the Contract and in the event that the CONCESSIONAIRE incurs in a reason of serious breach of its obligations, in accordance with the provisions of CHAPTER XVI and as long as such noncompliance has not been corrected by the CONCESSIONAIRE within the time granted for this purpose.

b) In the event that, due to noncompliance or partial, late or defective

compliance with its obligations, a firm final judgment or arbitral award orders the CONCESSIONAIRE to make a payment to the GRANTOR and provided the CONCESSIONAIRE has not made such payment in the deadline established in the final judgment or damning award.

11.11 In case of total or partial execution of the Guarantees referred to in this

CHAPTER, the CONCESSIONAIRE shall restore or cause to be restored the Guarantees to the established amount. If the CONCESSIONAIRE fails to restore the Guarantees, within twenty (20) Days from the date on which total or partial execution of the same was made, then the GRANTOR, prior opinion of the REGULATOR, by written communication to that purpose, shall declare the Contract avoided and the Concession expired on the date of such notice, proceeding to execute the Performance Bond of the Contract for the remaining amount as a penalty.

11.12 The Guarantees referred to in this CHAPTER shall be issued or confirmed, in

terms substantially equal to those contained in ANNEX III, ANNEX IV-A or ANNEX IV-B, as appropriate.

GUARANTEES IN FAVOR OF ALLOWED CREDITORS


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11.13 In order to finance the execution of the Rehabilitation and Improvement, Initial Periodic Maintenance and Exploitation of the concession, and without prejudice to other guarantees constituted later, the CONCESSIONAIRE may, prior authorization granted by the GRANTOR, with a favorable opinion of the REGULATOR, impose a tax or allocation of funds in the nature of a guarantee in favor of the Allowed Creditors, to ensure the Allowed Guaranteed Indebtedness, among other rights on the following assets for which it has valid property title:

a) The right of Concession, according to the provisions of Article 25 of

Legislative Decree Nº 1224. b) The income of the CONCESSIONAIRE and after deducting the Regulation

Contribution referred to subparagraph a) or article 14 of Law Nº 26917 and any other tax applicable for government entities.

c) The shares that correspond to the Minimum Participation, according to

Subparagraph h) of Clause 3.1. 11.14 The guarantee constituted on each one of such assets shall be binding and, after

their registration and notarization or publication, as the case may be, shall constitute a valid and fully perfected guarantee.

The CONCESSIONAIRE acknowledges and agrees that any such guarantees or fund allocations shall not relieve it of its contractual obligations. The GRANTOR agrees and acknowledges that neither the Allowed Creditors nor other person acting on their behalf shall be responsible for ensuring compliance of the Contract by the CONCESSIONAIRE until where appropriate, the Allowed Creditors favorably exercise the rights mentioned in Clause 11.16.

11.15 For the purpose of the authorization of constitution of the guarantees referred to in the above Clause, the CONCESSIONAIRE shall deliver to the GRANTOR and the REGULATOR, no later than forty (40) Days before the deadline for the commencement of the Initial Periodic Maintenance established in Clause 6.12, a copy of the draft contracts (constitution of a mortgage of the concession right, security interests or other guarantees), other draft documents and/or contracts related to the financing operation and project of economic-financial model of financing, as well as a declaration of the possible Allowed Creditor, in terms substantially equal to those contained in ANNEX II of this Contract.

Once such documents have been delivered, the GRANTOR shall have maximum twenty (20) Days from the receipt of the request to authorize the constitution of guarantees. The REGULATOR shall have fifteen (15) Days from the date of receipt of the request to issue its technical opinion. For evaluation purposes, both the GRANTOR and the REGULATOR, by communicating the other party, may request additional information, within the first ten (10) Days of receipt of documents. After the request is made, the calculation of the term to issue an opinion both for the GRANTOR and the REGULATOR shall be suspended. Once the requested information is received it shall be resumed with the calculation of the remaining Days to complete the term for each one of them as appropriate. The request of additional information of the GRANTOR and/or REGULATOR shall only be made once.


78

Such information shall be sent simultaneously to the REGULATOR and the GRANTOR. If the time mentioned in the previous paragraphs has expired without any pronouncement of the GRANTOR, the authorization shall be understood as granted.

11.16 The Allowed Creditors may request the execution of the guarantees established in their favor. In the case of the assumption indicated in Subparagraph a) of Clause 11.13 above, this will be made as indicated in Article 25 of Legislative Decree Nº 1224 and in Clause 11.17 as applicable.

11.17 The procedure for the execution of the security interest, in accordance with the

provisions of Law Nº 28677, corresponding to the Minimum Participation, according to the provisions in Subparagraph c) of Clause 11.13 shall be made under the direction of the Allowed Creditor(s) and with the participation of the GRANTOR and shall necessarily be governed by the following rules:

a) The decision of the Allowed Creditor(s), consisting of exercising their right to

execute the security interest constituted in their favor shall be communicated in writing to the GRANTOR, with a copy to the REGULATOR and the CONCESSIONAIRE, in a reliable way, before exercising any actions or adopting any measures which might jeopardize the Concession, either directly or indirectly. Upon reception of such communication, the REGULATOR shall issue a prior opinion within a period of fifteen (15) Days. The GRANTOR shall have a maximum term of fifteen (15) Days of the receipt of the opinion of the REGULATOR, to communicate its statement to the Allowed Creditor.

b) From that time: (a) The GRANTOR shall not declare the termination of the

Contract and shall be obliged to immediately initiate the appropriate coordination with the Allowed Creditor(s) , in order to appoint the legal person that, under the same terms provided for in the Contract and with a fee to be agreed with the Allowed Creditor(s) will act as Controller and will be temporarily in charge of the Exploitation of the Concession for the time it takes to replace the Strategic Partner referred to in the following points; and (b) no act of the CONCESSIONAIRE may suspend the procedure of execution of the security interest, being prevented from complying with the obligations that led to the execution of that guarantee.

c) For this purpose, the Allowed Creditor(s) may propose to the GRANTOR, with a copy to the REGULATOR, qualified operators, who will act as auditors taking into account the parameters established in the Bidding Terms and Conditions. The operator that is elected shall be authorized to temporarily exploit the Concession as auditor. His appointment shall be notified in writing to the CONCESSIONAIRE.

d) From that moment, the CONCESSIONAIRE shall be obliged to coordinate its actions with the appointed auditor, so that the transfer is carried out as efficiently as possible and is perfected within a maximum period of sixty (60) Days.

e) The CONCESSIONAIRE shall be liable for any act or omission that prevents,

delays or hinders the transfer of the Concession at the hands of the Auditor


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as well as for the resulting damage that may be caused to the GRANTOR, the Allowed Creditors, Users and/or third parties.

f) Once the Concession is under the transitional Exploitation of the Controller,

the Allowed Creditor(s) shall coordinate with the GRANTOR, the full text of the call and the basis of the selection procedure of the new Strategic Partner, holder of the Minimum Participation, which must comply with the substantive guidelines contained in the Bidding Terms and Conditions, especially in relation to the requirements of experience in Exploitation, which shall be approved by the GRANTOR.

g) Once the text of the call and the basis of the procedure to be implemented for the selection have been submitted for consideration of the GRANTOR, it shall formulate its objections, taking into account for its approval, the development of the Contract so far and possible causes of financial issues that rose in order to try to prevent such situations in the text of the new call, if applicable.

h) These objections shall be contained in a pronouncement that shall be issued within ten (10) Days from the date on which the GRANTOR was informed with the text in question. If this time expires and there is no decision by the GRANTOR, the referred text will be considered approved and Allowed Creditor(s) may proceed accordingly with the selection procedure.

i) If there are objections of the GRANTOR, once the Allowed Creditor(s)

become aware of them, they will have a maximum period of ten (10) Days to correct or reject them and submit to the GRANTOR for the second time the text of the call and the basis of the selection procedure for the transfer of the Minimum Participation. Then, the GRANTOR shall give its agreement with such text within five (5) Days from the date on which it was informed with it. However, if this time expires and there is no approving decision, the aforementioned text shall be deemed approved. at a later date that

j) Once the text of the call and the basis of the selection procedure for the

transfer of the Minimum Participation have been approved, the Allowed Creditor(s) shall start the procedure established there within the following five (5) Days, to the time in which said Allowed Creditor(s) grant the award, which may not occur later than one hundred and eighty (180) days from the date the GRANTOR was informed about the decision to execute the security interest, except that under the circumstances, the process of such procedure demands a longer period, in which case the extension determined by the GRANTOR shall be applied.

k) After the contract has been awarded as set forth in the text of the Bidding

Terms and Conditions approved by the GRANTOR, and as stated in this Clause, such act shall be informed in writing to both the GRANTOR and the legal controller person. From that moment, the latter shall be obliged to initiate the appropriate coordination, so that the transfer of the Concession operation is carried out as efficiently as possible.

l) The definitive replacement of the Strategic Partner in favor of the Successful

Bidder shall be perfected within thirty (30) Days from the date on which the award of the private auction was granted, under sole responsibility of the latter. Such definitive replacement shall be proven by the respective


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certificates or deeds of transfer of shares or rights. A copy of these documents shall be delivered to the Allowed Creditors, the GRANTOR and the REGULATOR, and entries shall be made in the corresponding Public Registry.

m) In accordance with the procedure established above, the Successful Bidder

shall be acknowledged by the GRANTOR as a new Strategic Partner. For this purpose, such Strategic Partner shall entirely replace in the contractual position of the original Strategic Partner, being subject to the terms of the Concession Contract signed by the latter for the remaining term. Through this act, the Parties agree with the transfer of the contractual position of the Strategic Partner according to the terms in this Clause. Consequently, the new Strategic Partner shall have the same rights and obligations conferred by this Contract provided that it has complied with the Applicable Laws and Regulations.

n) Without prejudice to the aforementioned, Paragraphs 2 and 4 of Article 47 of

Law Nº 28677 shall be observed. CHAPTER XII: INSURANCE REGIME AND LIABILITY OF THE CONCESSIONAIRE

APPROVAL 12.1. The CONCESSIONAIRE undertakes to have the insurances during the term of

the Contract in accordance with the provisions of this CHAPTER, whose policy proposals shall be submitted to the REGULATOR for approval.

In no case shall the approval of the insurance policy by the REGULATOR imply a transfer and/or shared responsibility of the risk that the CONCESSIONAIRE has regarding its contracting. Failing to comply with the submission of the insurance policies shall result in the application of a penalty according to Table Nº 6 of ANNEX IX.

12.2. For the policy proposals referred to in Subparagraph e) of Clause 3.5, the REGULATOR has a period of thirty (30) Days for its approval from the time it is notified by the GRANTOR. Such situation is equally applicable to the cases in which the CONCESSIONAIRE must submit the list of insurance policies, according to the provisions set forth in Clause 12.4.

In case of an objection, the CONCESSIONAIRE shall have fifteen (15) Calendar Days to correct such objection. This term may be extended for one time by the REGULATOR upon request of the CONCESSIONAIRE. If no objection is made by the REGULATOR, and for the purposes that the Concession Assets are not deprived of insurance, the proposals of policies shall be understood as approved. The definitive policies shall be contracted and delivered to the GRANTOR with copy to the REGULATOR, within a term of thirty (30) Calendar Days of the approval of the aforementioned proposals of policies.


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CLASSES OF INSURANCE POLICIES 12.3. During the term of the Contract, the CONCESSIONAIRE shall take and maintain

in force the following insurance policies, which shall aim at covering the losses occurred in relation to the road infrastructure subject of the Concession.

During the term of the Concession, the following insurances shall be maintained:

a) Civil liability insurance. From the beginning of the Exploitation, the CONCESSIONAIRE shall be obliged to take out an insurance policy for Civil Liability (CL) to cover any damage, loss or injury that may occur to third party’s assets or third parties as a result of any action of the CONCESSIONAIRE, its contractors, subcontractors, its officers and/or dependents, in connection with the execution of this Contract. In such insurance the GRANTOR shall appear as additional insured. This insurance shall include at least the following coverage:

CL for activities related to the Contract, (Contractual CL).

CL for Construction.

CL for Load.

CL for Sudden, Unforeseen and Accidental Filtration, Pollution or Contamination.

Patronal CL including works at height and/or underground works. The employees and workers of subcontractors shall also be included within this insurance or under an independent policy.

Crossed CL.

CL of Motorized Vehicles and Mobile Equipment, that covers all own vehicles, leased vehicles, or vehicles under leasing used in connection with the Rehabilitation and Improvement and Initial Periodic Maintenance.

b) Insurance on assets in Construction.

The CONCESSIONAIRE is obliged to take out, during the execution of the Rehabilitation and Improvement, Initial Periodic Maintenance and Additional Works, an insurance against all risk of Construction, CAR (Construction All Risk) policy, that covers within the Basic Coverage ("A"), one hundred percent (100%) of the replacement value of the assets in Construction that are affected. In addition to the Basic Coverage ("A") the CAR Policy shall have other coverage such as design risks and any other coverage provided under a CAR policy up to an insured sum that is enough to deal with any incident that may occur during the execution of the Rehabilitation and Improvement, Initial Periodic Maintenance and Additional Works. In this case, the replacement of the assets shall be covered with a CAR Policy provided for in this section, and in no case may be covered with the Road Emergency Account.

The arranged policies shall have the CONCESSIONAIRE as sole beneficiary, which shall be obliged to immediately allocate the funds obtained in the reconstruction of road infrastructure in the shortest possible time.


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This insurance shall include a Clause in which it is established that the funds obtained from the compensation for any incident shall be intended necessarily to repair the damage caused by the incident.

The stated value of the insurance policy shall be equivalent to the replacement value of the total amount of the Rehabilitation and Improvement and/or Initial Periodic Maintenance in execution and shall conform to the nature of each asset. Under no circumstances shall the book value of each one of them be taken into account. The calculation of the amount corresponding to the Rehabilitation and Improvement and/or Initial Periodic Maintenance in execution shall be established based on the schedule of physical progress and its validity shall be the same as the period of execution of the Rehabilitation and Improvement and Initial Periodic Maintenance.

The GRANTOR shall appear as an additional insured of the policy. Once that the Rehabilitation and Improvement, Initial Periodic Maintenance and Additional Works have the appropriate acceptance in accordance with the procedure set out in Clauses 6.21 to 6.29, such assets shall start being covered by the policy referred to in the following Subparagraph.

c) Insurances on assets in Operation. From the start of the Exploitation, the CONCESSIONAIRE undertakes to take out at its own expense an Insurance on the Concession Assets that it is operating, which covers one hundred percent (100%) of the replacement value of the assets that are affected, including strikes, riots or social upheaval, as long as they do not represent a Road Emergency. Without prejudice to the foregoing, the CONCESSIONAIRE undertakes to allocate any compensation it obtains as a result of the indicated policy, to the replacement of the Assets that would have been lost.

Riots, strikes or social upheaval shall be covered by the Insurance on Concession Assets, as provided for in the first paragraph of this section.

d) Labor risks. From the beginning of the Rehabilitation and Improvement, the Initial Periodic Maintenance or the Additional Works, the CONCESSIONAIRE, as employer, is obliged to take out a supplemental workers compensation insurance policy according to the provisions of Law Nº 26790 and its regulations and any amending provision. Also, the CONCESSIONAIRE shall verify that the special services companies, contracting agents or subcontractors with which the CONCESSIONAIRE will employ or contract, also comply with the regulation indicated in the previous paragraph, or, failing that, shall directly take out such insurance on behalf of them.

The insured amounts and the protection foreseen shall correspond to the requirements contained in the mentioned law.

e) Other Policies.


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Without prejudice to the mandatory policies indicated in Subparagraphs a) to d) of this Clause, the CONCESSIONAIRE may, according to its own strategic vision of management and distribution of the risks or to comply with the provisions of the law of the Republic of Peru or for any other duly justified reason, take out any other insurance policy at its own cost, notifying about this action to the GRANTOR and REGULATOR.

The amount to be insured in each of the above policies shall be determined by the CONCESSIONAIRE, based on its estimate, in a sufficient level to cover the damages according to each type of policy. The CONCESSIONAIRE shall be responsible for the balance not covered by the arranged insurance, in case any claim on his part exceeds the sum insured, relieving the GRANTOR of liability.

COMMUNICATION

12.4. Policies issued pursuant to the provisions of the Contract shall contain a provision requiring the respective insurance company to notify the REGULATOR and the GRANTOR in writing for any failure to pay premiums incurred by the CONCESSIONAIRE and about any circumstances affecting the effect, validity or effectiveness of the policy, at least twenty (20) Days before the date on which the failure of the CONCESSIONAIRE may determine the expiry or loss of validity of the policy in whole or in part. The notification requirement shall also be applicable to the case of cessation, withdrawal, cancellation or non-renewal of any insurance that the CONCESSIONAIRE must keep under this Contract.

The respective policy shall also establish that the expiry or loss of validity of the policy shall only occur if the insurance company has previously complied with the obligation referred to in the preceding paragraph.

EFFECTIVENESS OF POLICIES 12.5. The CONCESSIONAIRE undertakes to submit to the REGULATOR annually,

before January 30 of each year, and throughout the term of the Concession, a list of insurance policies to be taken out and/or maintained by the CONCESSIONAIRE during each Calendar Year, indicating at least the coverage, insurance companies, reinsurers and claims made during the previous year, and a certificate issued by the authorized representative of the insurance company stating that the CONCESSIONAIRE has met during the past year with the terms of this Clause.

Without prejudice to the foregoing, during the course of the Contract and whenever it is required by the REGULATOR, the CONCESSIONAIRE shall submit strong evidence to the REGULATOR and the GRANTOR that all insurance policies remain in force. Failing to maintain the insurance policies in force shall result in the application of a penalty as established in Table Nº 6 of ANNEX IX.

RIGHT OF THE GRANTOR TO INSURE

12.6. If it is verified that the CONCESSIONAIRE has not complied with the obligation to maintain in force the policies outlined in Subparagraphs a) to d) of Clause 12.3 or the assumption foreseen in Clause 12.9, the GRANTOR shall be entitled, proceeding reasonably, to acquire such insurances itself, in which case all amounts paid by the GRANTOR in this regard shall be reimbursed by the


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CONCESSIONAIRE to the GRANTOR, with a surcharge of ten percent (10%) as penalty within thirty (30) Calendar Days following the date on which the GRANTOR has formally notified the exercise of the right covered by this CHAPTER.

12.7. In case of breach of the reimbursement obligation and the indicated surcharge, the GRANTOR shall immediately execute the Performance Bond of Concession Contract, without prejudice to the eventual actions that would result from such breach, including among them, the termination of the Contract in accordance with the provisions in Clause 16.4.

RESPONSIBILITY OF THE CONCESSIONAIRE

12.8. The arrangement of insurance policies by the CONCESSIONAIRE does not diminish its responsibility, the same that is attributable to causes arising subsequent to the Takeover gradually carried out by the partial delivery of assets; therefore, the CONCESSIONAIRE continues to be subject to the fulfillment of the obligations established in this Contract. Also during the term of the Concession, the CONCESSIONAIRE shall be responsible for the correct execution of the Rehabilitation and Improvement and Initial Periodic Maintenance and Additional Works if appropriate, without prejudice to the direction and control functions that correspond to the GRANTOR or the REGULATOR.

The GRANTOR shall not be subject to any liability for any loss, damage, claim or liability arising from or based on the use, operation, condition or state of the Rehabilitation and Improvement and Initial Periodic Maintenance in the Concession Area from (and including) the date on which the Takeover is carried out, gradually performed by the partial delivery of assets and until (and including) the date of Termination of the Concession, the CONCESSIONAIRE being bound to indemnify, defend and hold harmless the GRANTOR, except that such events (i) are caused by gross negligence or willful misconduct of the GRANTOR (or any worker, agent, or representative thereof) or (ii) that are solely and directly caused by any regulatory action taken by the REGULATOR.

Furthermore, and irrespective of the provisions of this Clause and the obligations established therein, the CONCESSIONAIRE shall pay all amounts due to any person up to the limit of his liability in accordance with the Applicable Laws and Regulations in the State of the Republic of Peru, in force at the time the damage occurs.

The CONCESSIONAIRE shall bear the costs of all and each one of the deductibles and/or coinsurances that has taken out in the required insurance policies.

OTHER RESPONSIBILITIES AND OBLIGATIONS OF THE CONCESSIONAIRE 12.9. The CONCESSIONAIRE shall take out all insurance policies required under this

Contract with Insurance and Reinsurance companies having been rated A or higher, whose assessment has been made by a national credit rating company duly authorized by the Superintendence of Securities (SMV) and that is registered in the Superintendence of Banking, Insurance and AFP (SBS). International reinsurers that cover the risks of the insurer hired by the CONCESSIONAIRE shall have a minimum rating of A- granted by an international credit rating company that rates the Republic of Peru at the time of hiring and subsequent renewals. Insurance policies and insurance contracts shall be written in Spanish


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language. Insurance certificates for each policy listed above shall contain the following:

a) A statement in which the GRANTOR appears as additional beneficiary, as appropriate.

b) A statement in which the Insurance Company has waived to the rights of subrogation with regard to the GRANTOR.

c) A statement of the insurance company through which it undertakes to notify the REGULATOR and the GRANTOR in writing of any failure to pay premiums incurred by the CONCESSIONAIRE and about any circumstances that affect the effect, validity or effectiveness of the policy, as provided in Clause 12.4.

OBLIGATION OF THE GRANTOR 12.10. If the GRANTOR receives any amount as reimbursement for damage to the road

infrastructure in compliance with the terms agreed in the policies covered by this Section, it will go exclusively to the CONCESSIONAIRE to repair such damage, so that it is enabled to normally continue exploiting the Subsections. To this end, the GRANTOR shall deliver the received amounts to the CONCESSIONAIRE within a period of one hundred and eighty (180) Days.

12.11. In case a Road Emergency occurs with damage to the assets in this operation,

the CONCESSIONAIRE shall be obliged to give prompt solution to the damage occurred, according to the mechanism shown in Clause 7.7, unless the damage results from causes attributable to the CONCESSIONAIRE, in which case provisions in Clause 7.7 shall not apply.

12.12. The regulation on the provision for Road Emergencies is in ANNEX XI. 12.13. Funds deposited in the Road Emergency account shall not form part nor shall be

deducted from the PRI, APIPM or AMPO to which the CONCESSIONAIRE in entitled to.

RISK ANALYSIS

12.14. The CONCESSIONAIRE shall contract the services of an internationally renowned specialized company, other than the insurance broker, agent or consultant of the CONCESSIONAIRE, to carry out a risk analysis, and therefore determine the probable maximum loss of all assets to be insured, and that may be caused by the incidents or events occurring and that will be covered by the policies mentioned in Clause 12.3¡Error! No se encuentra el origen de la referencia., except for the policy provided in section d) of such Clause 12.3. The probable maximum loss shall be the minimum amount of the insured sum for each required policy.

On the Date of Signing of the Contract, the CONCESSIONAIRE shall submit to the REGULATOR a list containing at least three (03) specialized companies. The REGULATOR has a period of five (05) Days to choose one of the specialized companies and inform the CONCESSIONAIRE about its decision. If such choice is not made within the mentioned deadline, the CONCESSIONAIRE may contract the company of its choice.


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Thirty-five (35) Days from the Date of Signing of the Contract, the CONCESSIONAIRE shall submit to the GRANTOR, with a copy to the REGULATOR, the risk analysis referred to in sections a) and c) of Clause 12.3. With relation to the insurance of section c) of Clause 12.3, the abovementioned risk analysis shall be updated after the Initial Inventory set out in Clause 1.11.56. The CONCESSIONAIRE shall submit to the GRANTOR, with a copy to the REGULATOR, the risk analysis corresponding to the insurance referred to in section b) of Clause 12.3, at least twenty (20) Days before the commencement of the execution of the Rehabilitation and Improvement, as well as the Initial Periodic Maintenance. The CONCESSIONAIRE shall submit to the GRANTOR, with a copy to the REGULATOR, the risk analysis related to the insurances indicated in sections a) and c) of Clause 12.3, corresponding to the assets that as a result of the acceptance of the Rehabilitation and Improvement as well as the acceptance of the Initial Periodic Maintenance, have become Concession Assets, within a period of twenty (20) Days from the completion of the execution of the Rehabilitation and Improvement as well as the Initial Periodic Maintenance. After the acceptance of the Rehabilitation and Improvement as well as the Initial Periodic Maintenance, the CONCESSIONAIRE shall submit to the GRANTOR, with a copy to the REGULATOR, within the first quarter of each Calendar year, a risk analysis updated to December 31 of the preceding Calendar Year, including the Additional Works executed and accepted.


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CHAPTER XIII: SOCIAL ENVIRONMENTAL CONSIDERATIONS SOCIAL ENVIRONMENTAL OBLIGATIONS OF THE CONCESSIONAIRE

13.1. The CONCESSIONAIRE declares to be aware of the Applicable Laws and

Regulations, including the international regulations referred to in the Second Transitional, Supplementary and Final Provision of the General Environmental Law, and the obligations established in this Contract on environmental issues, provided they are applicable to the activities covered by this Contract.

The CONCESSIONAIRE undertakes to comply with such laws as a fundamental component of its environmental management, implementing the necessary measures to ensure appropriate management in the Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte Sahuinto/Dv. Pisco – Huaytará – Ayacucho.

For this purpose, it shall comply with the Environmental Management Instruments approved by the Competent Environmental Authority, as well the ordinances established by the latter within the framework of the environmental legislation in force.

13.2. The CONCESSIONAIRE shall not be responsible for the mitigation or

environmental impacts that may have been generated within or outside the area of influence of the Concession, as well as in other areas used for the installation of quarries, deposits of excess material, use or operation of warehouses, offices, workshops, yard of machinery, camps, accesses and other ancillary areas, before the date of the Takeover, event when the contamination effects occur after such date.

In the case of contamination or environmental impacts that may be generated outside the area of influence of the Concession, from the date of the Takeover, the CONCESSIONAIRE shall only be liable when it is proven that the cause of the environmental damage is attributable to it, whether directly or indirectly. Within the area of influence of the Concession, the CONCESSIONAIRE shall be jointly liable with the subcontractors for the compliance with current environmental regulations and its obligations under this contract.

13.3. Noncompliance with the obligations on environmental issues not expressly covered in the Contract and derived from the Applicable Laws in force, by the CONCESSIONAIRE, shall be sanctioned by the Competent Environmental Authority.

13.4. The CONCESSIONAIRE shall perform the identification and assessment of the

environmental liabilities during the preparation of the Environmental Management Instrument to be determined by the Competent Environmental Authority.

ENVIRONMENTAL DOCUMENTATION OF THE CONTRACT

13.5. The implementation of the conditions and/or measures established in the

Environmental Management Instrument shall be the exclusive responsibility and at the expense of the CONCESSIONAIRE, which shall comply with all the environmental regulations in force.


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ENVIRONMENTAL MANAGEMENT

13.6. The CONCESSIONAIRE is obliged to formulate the Environmental Management Instrument, based on the Classification Resolution and Terms of reference approved by the Competent Environmental Authority established in Supreme Decree Nº 019-2009-MINAM, in the applicable articles, or regulation that replaces it.

13.7. The commencement of interventions of Rehabilitation and Improvement and the

Initial Periodic Maintenance are subject to the approval of the corresponding environmental document and the relevant environmental certification, established in article 03° of the Law of the National System of Environmental Impact Assessment or regulation that replaces it.

13.8. Within thirty (30) business days following the start of the project execution works,

the CONCESSIONAIRE shall notify the fact to the Competent Environmental Authority.

13.9. Reports on environmental monitoring and compliance with the obligations derived

from the Environmental Management Instrument shall be submitted by the CONCESSIONAIRE to the Competent Environmental Authority, within the deadlines indicted in clauses 13.18 to 13.20, in accordance with the content and conditions set forth in the Environmental Management Instruments approved by the latter, or it deems it convenient.

13.10. In the event the modification of one or more Environmental Management

Programs approved as part of the Environmental Management Instrument is required, the CONCESSIONAIRE shall submit them as a proposal to the REGULATOR, for approval of the GRANTOR, before the start of the corresponding activity.

13.11. Under Supreme Decree Nº 003 - 2011 - MINAM, if the concession project area is

affecting a Protected Natural Area or its Buffer Zone, the GRANTOR through the Directorate General of Concessions shall request the SERNANP the issuance of Compatibility previously to the granting of rights aimed at the habilitation of infrastructure in the Protected Natural Areas and/or their Buffer Zones and prior to the formulation of the corresponding Environmental Management Instrument.

SOCIAL ENVIRONMENTAL SPECIFICATIONS FOR THE EXECUTION OF THE REHABILITATION AND IMPROVEMENT, INITIAL PERIODIC MAINTENANCE AND EXPLOITATION 13.12. The Social Environmental specifications that shall be implemented by the

CONCESSIONAIRE includes measures of mitigation, compensation, risk prevention, accident control, environmental follow up and monitoring, as appropriate, for those activities and the Rehabilitation and Improvement and Initial Periodic Maintenance of the project that produce negative impacts on an environmental component and that cannot be reversed without the application of such measures, or when it is necessary to apply them to comply with the current legislation. Failing to submit the risk prevention plan, the accident control plan or contingency plan shall result in the application of a penalty according to Table Nº 7 of ANNEX IX.


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13.13. The measures established form part of the corresponding studies and should be considered within the criteria, procedures and actions necessary to implement for the development of an adequate and timely social environmental management of the Contract.

Failing to comply with the measures set forth in these specifications and the instructions provided by the REGULATOR, through the logbooks, other than those arising from the environmental legislation, shall result in the application of the penalty for the CONCESSIONAIRE, as established in Table Nº 7 of ANNEX IX of this Contract.

13.14. For the treatment of the aspects of Cultural Heritage, the following specifications

shall be considered: a) Applicable environmental regulations

The General Law on Cultural Heritage of the Nation, Law Nº 28296, dated July 22, 2004, which recognizes as cultural property the archaeological sites, setting forth administrative sanctions in case of gross negligence or willful misconduct, in conservation of the cultural heritage property of the Nation and the amendment of Article 30, established by Legislative Decree Nº 1003.

b) For obtaining the Certificate of Absence of Archaeological Remains (CIRA),

if appropriate, the provisions of the Regulation on Archaeological Interventions approved through Supreme Decree Nº 003-2014-MC and other Applicable Laws and Regulations shall be taken into account.

Exceptions to the application for the CIRA are regulated and applied according to Article 57º of the Regulation on Archaeological Interventions approved through Supreme Decree Nº 003-2014-MC.

Procedures for archaeological interventions are regulated according to the Regulation on Archaeological Interventions approved through Supreme Decree Nº 003-2014-MC, which are applicable to this project. The Archaeological Monitoring Plan shall be considered for projects executed on existing infrastructure, considering the application for the CIRA is not required, according to the Regulation on Archaeological Interventions approved through Supreme Decree Nº 003-2014-MC.

c) Obtaining the corresponding CIRA shall be the responsibility of the CONCESSIONAIRE for the case of the Rehabilitation and Improvement and Initial Periodic Maintenance that may be outside the Right of Way approved by the Ministry of Transportation and Communications. To this end, the requirements and procedures set forth in Article 56º and 57º of the Regulation on Archaeological Interventions approved through Supreme Decree Nº 003-2014-MC shall be complied with.

13.15. Before starting the execution of the Rehabilitation and Improvement and/or Initial

Periodic Maintenance, the CONCESSIONAIRE shall perform several activities to train his workers in issues related, among others, to the following:

a) Safe management. b) Procedures in case of accidents in camps, asphalt and concrete plants,

exploitation in quarries and deposits of excess material. c) Procedures in case of accidents at the work fronts.


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TREATMENT OF OVERRUN BY ENVIRONMENTAL MEASURES NOT COVERED BY THE CONTRACT 13.16. If during the term of the Concession, the GRANTOR determines the need to

implement environmental mitigation and/or compensation measures additional to those provided in this Contract, they shall be considered as Additional Works and, therefore, shall be governed by the procedures set in Clauses 6.30 and following of the Contract.

Failing to comply with the environmental obligations provided in Clauses 13.6 to 13.9 of this Contract, other than those arising from the environmental legislation shall result in the application of penalties, in accordance with the provisions in Table Nº 7 of ANNEX IX of this Contract.

13.17. Continuous improvement The CONCESSIONAIRE shall implement an internationally renowned environmental management system and that may be subject to auditing and certification by an entity other than the CONCESSIONAIRE. The deadline for the implementation and certification is two (02) years after the commencement of the Exploitation.

ENVIRONMENTAL REPORTS DURING THE EXECUTION OF THE REHABILITATION AND IMPROVEMENT, INITIAL PERIODIC MAINTENANCE AND EXPLOITATION 13.18. Within the first fifteen (15) Days of each month, the CONCESSIONAIRE shall

submit to DGASA with a copy to the REGULATOR, an environmental report on the compliance with the respective environmental components included in the Environmental Management Instrument and the Social Environmental Considerations of the Concession Contract during the execution of the Rehabilitation, Improvement and Initial Periodic Maintenance of the Concession.

13.19. During the period of Exploitation of the Concession, the environmental reports

shall be delivered to DGASA with a copy to the REGULATOR, the first fifteen (15) days of each quarter, informing about the compliance with the respective environmental components included in the Environmental Management Instrument and the Social Environmental Considerations of the Concession Contract.

13.20. In these reports, the CONCESSIONAIRE shall provide information on the

activities performed, to account for the measures defined in the Environmental Management Instrument; pointing out the environmental problems once the Social Environmental Specifications and the Environmental Management Programs have been applied, and propose additional measures necessary to mitigate and/or correct them.

13.21. During the first five (5) calendar years of the Operation, the reports shall be

submitted to the DGASA on a quarterly basis. From the Sixth calendar year of the operation, and up to completion of the term of the Concession, the environmental reports shall be submitted every six months by the CONCESSIONAIRE to the DGASA within the first fifteen (15) calendar days of each semester with a copy to OSITRAN.


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Failing to comply with the report delivery deadlines shall result in the application of a penalty according to Table Nº 7 of ANNEX IX. PENALTIES 13.22. Failing to comply with the contractual environmental obligations provided in this

Contract and ANNEXES thereof shall result in the application of penalties, according to Table Nº 7 of ANNEX IX.

13.23. In case the Competent Environmental Authority approves a regulation on

infractions and sanctions, these shall be taken into account by the CONCESSIONAIRE for the execution of the project.

CHAPTER XIV: RELATIONS WITH PARTNERS, THIRD PARTIES AND PERSONNEL

ASSIGNMENT OF TRANSFER OF THE CONCESSION

14.1. The CONCESSIONAIRE may not transfer its right to the Concession or assign

its contractual position without the prior written consent of the GRANTOR, which shall take into consideration the technical opinion previously issued by the REGULATOR. For purposes of the authorization, the CONCESSIONAIRE shall inform about its intention to transfer the Concession or assign its contractual position, by attaching the following:

a) Preparatory contract or letter of intention of transfer or assignment, duly

signed by the assignor, according to the procedure and with the corporate majorities required by the Bylaws.

b) Documentation that proves the required legal capacity of the assignee. c) Documentation that proves the financial and technical capacity of the

assignee, taking into account the provisions of the Bidding Terms and Conditions and the Concession Contract.

d) Agreement by which the third party agrees to assume any damage and pay

any other sum due and payable by the CONCESSIONAIRE. e) Agreement by which the Strategic Partner is replaced by one of the

shareholders of the assignee in the contractual position occupied by the former in the Concession Contract. Such assignee shall comply with the operation requirements indicated for shortlisting, as indicated in the Bidding Terms and Conditions.

f) Conformity of the Allowed Creditors regarding the proposed transfer or

assignment agreement. The CONCESSIONAIRE shall submit all the documents mentioned in this Clause both to the GRANTOR and to the REGULATOR. Within thirty (30) Days from the submission by the CONCESSIONAIRE, the REGULATOR shall issue its prior opinion. In turn, the GRANTOR shall decide on the operation within forty (40) Days of receipt of the opinion of the REGULATOR. The consent of the GRANTOR does not relieve the CONCESSIONAIRE of responsibility for the transfer of its right to the Concession or assignment of its contractual position up


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to a maximum period of one (1) year from the date of approval of the transfer or assignment. This means that during this period the CONCESSIONAIRE shall be jointly liable with the new CONCESSIONAIRE for acts committed prior to the transfer or assignment. The negative decision or absence of pronouncement implies the rejection of the operation.

CLAUSES IN CONTRACTS

14.2. In all contracts, agreements or covenants that the CONCESSIONAIRE enters

into with partners, third parties and personnel, clauses comprising the following aspects shall be included:

a) The resolution of the corresponding contracts by the Termination of the

Concession. b) That the term of effectiveness does not exceed the Concession Term. c) The waiver to file actions of civil responsibility against the GRANTOR, the

REGULATOR and its officers. The inclusion of these Clauses shall not be applicable to contracts referred to the Allowed Guaranteed Indebtedness, except for the guarantee foreseen in subparagraph a) of Clause 11.13, which shall be subject to the validity of the Concession Contract. Nonetheless, the CONCESSIONAIRE shall hold the GRANTOR, the REGULATOR and its officers harmless for any action of civil responsibility against them, derived from the execution of these contracts. In no case the CONCESSIONAIRE is exempted from any responsibility before the GRANTOR, for acts derived from the execution of contracts signed with third parties that may have any incidence on the Concession.

RELATIONS OF THE PERSONNEL 14.3. Employment contracts of domestic or foreign staff of the CONCESSIONAIRE, the

implementation of these contracts and the resolution thereof are subject to the rules governing labor relations of workers in the private sector. Also, the special labor regimes shall be applicable in the appropriate cases.

14.4. The CONCESSIONAIRE shall strictly comply with labor regulations relating to

formal obligations of the employer (payroll books, payment vouchers and other), payment and retention of pension contributions, as well as contractual and legal obligations related to occupational safety and health.

14.5. The CONCESSIONAIRE shall have a staff team that before any emergency

situation guarantees the adequate provision of the Service twenty-four (24) hours a day.

14.6. If the Termination of the Concession occurs, the CONCESSIONAIRE is solely

responsible for the payment of all employee benefits, such as wages, working conditions and other conventional or unilateral benefits owed to its workers up to the date when the Termination of the Concession took place. The GRANTOR shall not be responsible, in any case, for those debts.

In the event that the GRANTOR is judicially ordered to pay any labor debt, which had accrued while the Concession is valid, it shall have the right of recourse against the CONCESSIONAIRE.


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14.7. The CONCESSIONAIRE shall freely determine the number of staff required to contract for the Exploitation of road infrastructure in the Subsection, including the operation of the toll units and weighing system. However, the CONCESSIONAIRE shall give priority in hiring to workers who were operating in the Subsection, in which case such workers shall have been previously settled by the GRANTOR or the corresponding party.

RELATIONS WITH THE STRATEGIC PARTNER 14.8. The Strategic Partner, on the Date of Signing of the Contract, shall commit to the

following:

a) Adjust its conduct in the General Meetings of the CONCESSIONAIRE to facilitate with its vote the agreements and decisions of the highest body of the partnership in favor of issues related to the full execution of the Contract.

b) Not to prevent with its acts or omissions the CONCESSIONAIRE from normally carrying out its activities, especially those involving the execution of the Contract.

c) Assume its obligations, responsibilities and guarantees that correspond according to this Contract and other related covenants.

d) Oppose to any motion submitted by a shareholder or partner of the CONCESSIONAIRE that proposes a social capital increase in relation to which the Strategic Partner is not in the capacity to exercise its right of preferential subscription that allows it, at least, to maintain the Minimum Participation in the CONCESSIONAIRE.

CONTRACTS OF EXECUTION OF THE REHABILITATION AND IMPROVEMENT AND INITIAL PERIODIC MAINTENANCE

14.9. At the start date of the execution of the Rehabilitation and Improvement and Initial Periodic Maintenance, the CONCESSIONAIRE shall have complied with the signing, with one or more companies, according to what is stated in the Bidding Terms and Conditions, one or more contracts with the Constructor(s) under the terms and conditions set forth in the Bidding Terms and Conditions. Under such contract(s) with the Constructor(s), the Constructor(s) shall jointly assume with the CONCESSIONAIRE the responsibility before the GRANTOR for the execution of the Rehabilitation and Improvement and Initial Periodic Maintenance, regarding the participation percentage of each one of them in the execution of the Rehabilitation and Improvement and Initial Periodic Maintenance.

The contract with the Constructor(s) shall not give them any right that may be invoked or is subject to assert directly before the GRANTOR for any cause or reason and under any circumstances, since the contractual relationship is between the CONCESSIONAIRE and the Constructor(s), not having the latter any link with the GRANTOR.

For any changes in the contracts signed by the CONCESSIONAIRE with the Constructor(s) with respect to the technical requirements of the Bidding Terms and Conditions, or in respect of the shareholders of the Constructor, who have demonstrated compliance with the requirements during the stage of the bid, or if


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new contracts of Execution of Rehabilitation and Improvement and/or Initial Periodic Maintenance are entered into, observance of the following shall be obligatory: a) Contractual modifications shall be made known to the GRANTOR and the REGULATOR; b) modifications involving changes of Constructor(s), as well as the signing of new Construction contracts shall require prior approval of the GRANTOR, which shall require the prior opinion of the REGULATOR for such purpose; c) that in case of change of Constructor, the technical requirements set forth in the Bidding Terms and Conditions shall be complied with, so that during the term of the Contract such requirements are complied with at all times. The GRANTOR may only oppose the change of Constructor(s) referred to above, if it is verified that the proposed Constructor, does not meet the minimum technical conditions laid down in the Bidding Terms and Conditions. The GRANTOR shall give its opinion within thirty (30) Days of the filing of the request of the CONCESSIONAIRE. If the GRANTOR makes no decision within the established deadline, it shall be understood that the proposal has been accepted. The request of change of Constructor(s) shall not imply in any case the extension of the deadline for the execution of the Rehabilitation and Improvement and Initial Periodic Maintenance, and the general expenses incurred during that period shall be assumed by the CONCESSIONAIRE.

CHAPTER XV: ADMINISTRATIVE COMPETENCES COMMON PROVISIONS 15.1. The GRANTOR and the REGULATOR shall comply with their functions relating

to this Contract, in strict compliance with the Applicable Laws and Regulations and within their respective areas of competence, for which the CONCESSIONAIRE will provide the necessary facilities. The exercise of these functions, shall in no case be subject to authorizations, permits or any expression of will of the CONCESSIONAIRE. The CONCESSIONAIRE shall provide full cooperation to facilitate compliance with these functions; otherwise, the provisions of the Regulation on Infractions and Sanctions of OSITRAN, approved by the Steering Council Resolution Nº 023-2003-CD-OSITRAN, or the regulation that replaces it shall be applicable.

PRIOR OPINIONS 15.2. In the cases covered by this Contract in which the exercise of the functions to be

fulfilled by the GRANTOR or the REGULATOR require a prior opinion by any of the aforementioned entities, and no different deadlines, subjects or procedures have been expressly established for these purposes in the relevant Clauses, the following default rules shall be observed:

a) In cases in which one of the entities is responsible for issuing an opinion, the

deadline for the other entity to issue its opinion will be half the term plus one Day which the competent authority has to make a decision as provided in this Contract.

b) The deadline to issue an opinion is thirty (30) Days, unless there are other specific provisions in the Contract. This period starts from the day after the opinion request is received by the appropriate entity. If the same application is submitted on different dates, the period shall run from the notification of the last request.


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c) If more information is required for issuing an opinion, both the REGULATOR and the GRANTOR may choose to suspend the deadline while the CONCESSIONAIRE sends the requested information. The request for information shall be made within ten (10) Days of the receipt of the opinion request. This procedure may be repeated until the delivery of the requested information to the CONCESSIONAIRE.

d) If an opinion is not issued within the deadlines established in the Contract, including this Clause, or the delivery of information by the GRANTOR, the REGULATOR or other entity has not been complied with, such opinion may be avoided in order to comply with the pronouncement within the deadlines provided by Contract, unless the same is specifically provided for in the Applicable Laws and Regulations as a condition for performing an act.

e) The requests for technical opinions on renegotiation and/or renewal of the term of the Contract formulated to the REGULATOR shall be made according to the general regulations of the Supervisory Board of Investment in Public Transportation Infrastructure – OSITRAN.

15.3. The CONCESSIONAIRE shall comply with all the information requirements and

procedures established in this Contract or which may be established by the GRANTOR and REGULATOR, in the matters within its competence. The CONCESSIONAIRE shall submit periodic reports, statistics and other data regarding its activities and operations in the forms and deadlines established by the Concession Contract or the GRANTOR and REGULATOR in the respective requirement. The CONCESSIONAIRE shall facilitate the review of its documents, files and other data required by the REGULATOR, in order to monitor and enforce the terms of this Contract. Failing to comply with the delivery of information by the CONCESSIONAIRE is subject to the provisions of the Regulation on Infractions and Sanctions of OSITRAN.

COMPETENCES AND POWERS OF THE REGULATOR 15.4. The REGULATOR has administrative competence to exercise all the powers

conferred by Law Nº 27332 and Law Nº 26917, as well as their amending, regulating and supplementing provisions.

SUPERVISION FUNCTION 15.5. The REGULATOR is competent to monitor the CONCESSIONAIRE in the

performance of legal, contractual, technical or administrative obligations, in the aspects of its sphere of competence, under Law Nº 27332 and Nº 26917 and regulations issued on the subject. The CONCESSIONAIRE shall proceed to comply with the provisions issued by the REGULATOR.

The costs of the monitoring activity shall be borne by the CONCESSIONAIRE, who will pay the REGULATOR the amounts indicated in Clause 10.3, and in Clause 15.12, in the opportunities indicated in such Clauses.

If the CONCESSIONAIRE fails to pay the amounts indicated in those Clauses, the REGULATOR may execute the Performance Bond of the Concession Contract up to the indicated amount.


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15.6. The REGULATOR shall appoint a supervisor for the Rehabilitation and

Improvement and Initial Periodic Maintenance, the same who will perform the activities assigned by the former. The ownership of the function is maintained in the REGULATOR.

SANCTIONING FUNCTION 15.7. The REGULATOR has competence to impose sanctions on the

CONCESSIONAIRE in case of breach of its obligations under Law Nº 27332 and Nº 26917 and the regulations issued on the subject. The CONCESSIONAIRE shall proceed to the enforcement of sanctions imposed by the REGULATOR according to the Regulatory Rules. The CONCESSIONAIRE shall not be exempted from liability even in cases where noncompliance results from contracts entered into with third parties on its behalf. The application of sanctions does not release the CONCESSIONAIRE from the effective compliance with its obligations.

The administrative sanctions imposed among other administrative authorities, by the Tax Administration, the Ministry of Labor and Employment Promotion, arising from the execution of this Contract be shall applied to the CONCESSIONAIRE regardless of contractual penalties established herein and notwithstanding the obligation to respond for damages resulting from the breach.

CONTRACTUAL PENALTIES

15.8. The REGULATOR has competence to impose on the CONCESSIONAIRE the penalties set forth in ANNEX IX of this Contract, in case of breach of the obligations agreed on the CONCESSIONAIRE. The CONCESSIONAIRE shall not be exempted from liability even in cases where noncompliance results from contracts entered into with third parties on its behalf. The application of penalties does not release the CONCESSIONAIRE from the effective compliance with its obligations. The amount of penalties shall be paid by the CONCESSIONAIRE to the Management Trust within ten (10) Days from the day following the notification received by the REGULATOR.

The deadline for the payment of the penalties referred to in this Clause shall be suspended before the challenge of the penalty by the CONCESSIONAIRE, restarting the calculation of such term if its imposition is confirmed by the REGULATOR.

15.9. The CONCESSIONAIRE may contest the penalty, in which case it shall submit, within a period of ten (10) Days from the day following the date of notification of the same, the challenge in writing to the REGULATOR with the respective support.

The REGULATOR shall have a maximum period of fifteen (15) Days to issue a duly substantiated decision. In case the deadline indicated above has expired, and the REGULATOR has not issued any statement, the filed challenge shall be understood as denied. The decision of the REGULATOR shall be considered final and shall not be subject to any claim by the CONCESSIONAIRE.

15.10. If the CONCESSIONAIRE fails to pay such penalties within the indicated deadline, the REGULATOR may execute the Performance Bond of the Concession Contract, the Performance Bond of Execution of Rehabilitation and


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Improvement or the Performance Bond of Execution of Initial Periodic Maintenance, as appropriate, up to the amount of the penalty imposed, and the CONCESSIONAIRE shall comply with the provisions of Clause 11.11.

15.11. Payment of the applicable penalties may not be considered an affectation to the financial flow of the Concession and the breakdown of economic and financial balance may not be invoked either.

CONTRIBUTION FOR REGULATION

15.12. The CONCESSIONAIRE is obliged to directly pay to the REGULATOR the contribution for regulation referred to in Article 14 of Law Nº 26917, or rule that amends or replaces it, under the terms and amounts referred to in such legal provisions as well as the regulatory provisions derived from these laws.

CHAPTER XVI: TERMINATION OF THE CONCESSION

TERMINATION OF THE CONTRACT 16.1. This Concession shall expire when any of the following grounds is verified:

a) Expiration of the Concession Term. b) Mutual agreement. c) Termination of the Contract for breach of the CONCESSIONAIRE. d) Termination of the Contract for breach of the GRANTOR. e) Unilateral decision of the GRANTOR. f) Force Majeure or Act of God. g) Other specific grounds established in this Contract. Whatever the grounds for termination are, except for clause indicated in Clause 16.2 of the Contract, the REGULATOR shall reliably inform such circumstance to the Allowed Creditors, prior to the termination of the Contract; also, within a period of thirty (30) Days, based on the progress in Rehabilitation and Improvement, Initial Periodic Maintenance and/or Maintenance and Operation, it shall make the calculation of the outstanding commitments of the GRANTOR to the CONCESSIONAIRE, the same that will be sent to the GRANTOR.

TERM EXPIRATION 16.2. The Contract shall end at the expiration of the term established in Clause 4.1 or

any extension granted according to CHAPTER IV of the Contract.

La Termination of the Concession for expiration of the agreed term shall not comprise compensation for expenses in Rehabilitation and Improvement, Initial Periodic Maintenance and facilities in the land areas within the Concession Area, as well as for Concession Assets, or any compensatory amount for eventual damages that the Termination of the Concession may generate for either Party.

TERMINATION BY MUTUAL AGREEMENT

16.3. The Contract shall terminate at any time by written agreement between the

CONCESSIONAIRE and the GRANTOR, prior opinion of the REGULATOR and of the Allowed Creditors.


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If the termination of the Contract occurs by mutual agreement between the Parties, it shall contain the mechanism of settlement of the Concession. The agreement shall consider the time elapsed since the signing of the Contract, the progress amounts of the Rehabilitation and Improvement and/or Initial Periodic Maintenance executed, the amounts paid by the GRANTOR for concepts of PRI, APIPM or AMPO, as appropriate, the value of the Concession Assets and circumstances existing at the date on which the Parties make that decision, as criteria to determine the mechanism of settlement. No compensatory amount shall be considered for damages caused by the Termination of the Concession to the Parties.

TERMINATION FOR BREACH OF THE CONCESSIONAIRE 16.4. The Contract shall terminate in advance if the CONCESSIONAIRE incurs in

serious breach of its contractual obligations. Without prejudice to the penalties and the application of the appropriate sanctions, the cases considered as grounds for serious breach of the obligations of the CONCESSIONAIRE shall be those expressly stated in the Contract, within which are the following: a) Breach of the CONCESSIONAIRE of the obligation to integrate its initial

social capital, within the deadline and according to the provisions of the second and third paragraph of Subparagraph b) of Clause 3.5 of the Contract.

b) Non-concurrence to the Takeover within the deadline and in the foreseen for said purpose.

c) The serious alteration of the environment, the Historic Heritage and/or the natural resources, as result of the infringement of the recommendations of the Environmental Management Instrument, for causes attributable to the CONCESSIONAIRE.

d) The commission of any act or omission that constitutes willful default of the CONCESSIONAIRE that results in the commission of a public crime to the detriment of the User, the GRANTOR and/or REGULATOR, where provided a res judicata judgment.

e) The transfer of rights of the CONCESSIONAIRE, except as provided in article 64° of the Regulation of Legislative Decree Nº 1224 and the assignment of its contractual position, without prior written authorization of the GRANTOR and without observing the provisions in this Contract or the Applicable Laws and Regulations.

f) The initiation, at the request of the CONCESSIONAIRE, of a corporate, administrative or judicial process for its dissolution or settlement.

g) The initiation, at the request of the CONCESSIONAIRE, of a process of merger, division or transformation of companies or other corporate reorganization, without the duly authorization from the GRANTOR.

h) Failure of the CONCESSIONAIRE to replace the Guarantees outlined in Clauses 11.2 and 11.6 in case they have been executed by the non-renewal or default attributable to the CONCESSIONAIRE, and failure to maintain in force the insurance policies outlined in CHAPTER XII: INSURANCE REGIME AND LIABILITY OF THE CONCESSIONAIRE, except for the provisions of Clause 12.6, provided that the GRANTOR has not exercised the right mentioned in Clause 12.6.

i) The disposal of the Concession Assets in a way different to that foreseen in the Contract, by the CONCESSIONAIRE, without prior written authorization of the GRANTOR.

j) The issuance of a firm or judicial administrative order, accepted or enforceable, for reasons attributable to the CONCESSIONAIRE that at the


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discretion of the REGULATOR, affects the business or the Concession Assets or CONCESSIONAIRE Assets or through a lien, encumbrance or sequestration; and if any of these measures is in effect for more than sixty (60) Calendar Days or within such longer period as is fixed in writing by the REGULATOR, which shall be granted when there are reasonable causes. The declaration of dissolution, liquidation, bankruptcy or appointment of the auditor of the CONCESSIONAIRE according to the provisions of the legislation on the subject. In these cases, the resolution of the Contract will occur when the GRANTOR becomes aware and submits a notification to this effect, prior opinion of the REGULATOR, provided the insolvency, dissolution, liquidation, bankruptcy or otherwise provided in this Clause would not have been remedied, according to the law within sixty (60) Days of notification, or within such longer period as established by the REGULATOR in writing, which shall be granted when there are reasonable causes, unless it is proven that the declaration of dissolution, liquidation , bankruptcy or appointment of an auditor has been fraudulent.

k) Any modification of the construction contracts, if applicable, or the signing of new construction contracts, without observing provisions in Section vi) of Subparagraph f) of Clause 3.5.

l) The application of contractual penalties that would have been made effective or would have been consented during the term of the Contract, which amount reaches ten percent (10%) of the budget contained in the Final Engineering Studies and Environmental Management Instrument for the Rehabilitation and Improvement or ten percent (10%) of the budget contained in the Technical Files for the Initial Periodic Maintenance; except in the case to overcome the percentage indicated in Clause 6.10 for delay in the commencement of the Rehabilitation and Improvement and/or Initial Periodic Maintenance or at the termination of the execution thereof. In these cases, the GRANTOR may, if considered convenient to guarantee the continuity in the provision of services of the Concession, not invoke the expiration of the same, and reach an agreement with the CONCESSIONAIRE in relation to a new limit of penalties.

m) Noncompliance in the submission of the Performance Bond of Execution of Rehabilitation and Improvement and Performance Bond of Execution of Initial Periodic Maintenance, when thirty (30) Days have elapsed from the term indicated in Subparagraph h) of Clause 6.12 and in Subparagraph h) of Clause 6.13, without prejudice to the corresponding penalties.

n) Noncompliance of the rules for the participation of the Strategic Partner, set forth in Section i) of Subparagraph f) of Clause 3.5 of the Contract.

o) The collection of a Rate for amounts higher than those authorized, verified and penalized according to Table Nº 5 of ANNEX IX, up to three (3) times by the REGULATOR within a period of twelve (12) months.

p) Falsehood in the declaration indicated in Subparagraph g) or Subparagraph j) of Clause 3.1.

q) Noncompliance in the accreditation of the financial closure, according to Appendix 1 of ANNEX XI.

If the REGULATOR certifies any of the cases of noncompliance indicated above and where applicable, having previously applied the procedure for the rectification foreseen in Clause 16.20 and the GRANTOR opts for the termination of the Contract, the REGULATOR shall inform this decision to the CONCESSIONAIRE in writing, at least ninety (90) Calendar Days in advance of the date of anticipated termination foreseen.


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16.5. In the cases established in subparagraphs of the preceding Clause, for the calculation of the amount to compensate to the CONCESSIONAIRE, if appropriate, provisions of Clause 16.14 to Clause 16.18 of the Contract shall apply.

16.6. If the termination of the Contract is produced due to breach of the

CONCESSIONAIRE, the treatment of guarantees shall be made as follows: a) In any case, the GRANTOR shall execute one hundred percent (100%) of

the Performance Bond of the Concession Contract. b) Additionally, in case of verifying that the ground is related to the execution

of the Rehabilitation and Improvement and/or Initial Periodic Maintenance, the GRANTOR shall execute one hundred percent (100%) of the amount of the Performance Bond of Execution of Rehabilitation and Improvement and/or Performance Bond of Execution of Initial Periodic Maintenance.

TERMINATION FOR BREACH OF THE GRANTOR 16.7. The CONCESSIONAIRE may terminate the Contract in advance in case the

GRANTOR incurs in serious breach of its contractual obligations. 16.8. Serious breach of the obligations of the GRANTOR shall occur in the following

cases:

a) Breach of the GRANTOR in the compliance with the procedure for the restoring of the financial economic balance established in Clauses 10.4 and following.

b) Breach of the GRANTOR in the delivery of the land area for the

commencement or continuation of the Rehabilitation and Improvement and/or Initial Periodic Maintenance within the deadlines foreseen in Clause 5.10.

c) Breach of payment of the PRI, APIPM and/or AMPO as provided in the

Contract. In case the CONCESSIONAIRE opts for the termination of the Contract, it shall inform in writing to the GRANTOR and to the REGULATOR with an anticipation of at least ninety (90) Calendar Days of the date of the advanced termination foreseen.

16.9. For the case of termination of the Contract for breach of the GRANTOR in the case established in Subparagraphs a), b) and c) of the preceding Clause, the calculation of the amount corresponding to the valuation shall proceed according to the provisions set forth in Clauses 16.14 to 16.18 of the Contract, as appropriate.

The concepts indicated in this Clause are the single payments to be recognized in favor of the CONCESSIONAIRE.

CAPACITY OF THE GRANTOR TO UNILATERALLY TERMINATE THE CONTRACT


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16.10. The GRANTOR has the power to unilaterally terminate the Contract, for well-founded reasons of public interest, which must be individualized, justified and developed into a formalized communication made to the CONCESSIONAIRE at least six (6) months before the period provided for the termination thereof. In the same term it shall notify this decision to the Allowed Creditors.

The referred communication shall also be signed by the body of the State of the Republic of Peru with competence to address such issue of public interest.

16.11. In this case, provisions of Clauses 16.19 a) or 16.19 b) shall apply, as appropriate. TERMINATION DUE TO FORCE MAJEURE OR ACT OF GOD

16.12. The CONCESSIONAIRE shall have the option to terminate the Contract by

events of force majeure or acts of God, provided it is one or several of the events mentioned in Subparagraph a) of Clause 17.1, provided the maximum period of suspension has expired, which must have produced a true and actual damage, duly founded and proven, caused by an insurmountable event beyond the reasonable control of the CONCESSIONAIRE, which, despite all efforts that can be done to prevent or mitigate its effects, cannot prevent the establishment of a noncompliance situation as a direct and necessary consequence of that event. For the exercise of the power provided in this chapter, the CONCESSIONAIRE shall observe the following procedure:

a) After the expiration of the deadline established in Clause 17.4, the

CONCESSIONAIRE shall communicate, through an official report, to the GRANTOR and the REGULATOR that, because of the occurrence of some of the circumstances described above, it has chosen to terminate the Contract. Such report shall contain the following: - A founded description of the ground invoked and the economic or legal

effects thereof. - A proposal of the procedure to follow for the termination of the Contract.

b) Such proposal shall be delivered to the GRANTOR, the REGULATOR and

the Allowed Creditors, which shall have a period of twenty (20) Days to formulate objections.

c) In case discrepancy in relation to the procedure proposed by the

CONCESSIONAIRE, these shall be submitted to the knowledge of the arbitrator established in CHAPTER XVIII of this Contract.

d) In case the CONCESSIONAIRE exercises the option established herein, it

shall receive an amount according to the provisions made in CHAPTER XVI. In case of Termination of the Concession for act of God or force majeure provided in subparagraph a) of Clause 17.1, the CONCESSIONAIRE shall have the right to receive the amounts resulting from the application of the procedure provided for in Clauses 16.14 to 16.18 of this Contract.

Such sums may come from the compensation derived from the insurances taken out by the CONCESSIONAIRE, only when reconstruction, replacement or repair of the damaged assets is materially impossible. If the compensation amount of


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insurances is not sufficient to cover the amounts resulting from the application of the procedure provided for in Clauses 16.14 to 16.18 of this Contract, GRANTOR shall pay the balance until such difference is covered.

Likewise, if after applying the compensation amount of the insurances taken out by the CONCESSIONAIRE to the reconstruction, replacement or repair of the damaged assets there was an excess, it shall be transferred to the GRANTOR.

RETURN OF THE PERFORMANCE BOND 16.13. In case the termination of the Contract is produced by agreement between the

Parties, for breach by the GRANTOR, for unilateral decision of the GRANTOR or for Force Majeure or Act of God, the GRANTOR shall return to the CONCESSIONAIRE the Performance Bond(s) in force within six (6) months from the Termination of the Concession.

PAYMENT OF THE COMMITMENTS OF PAYMENT OF THE GRANTOR TO THE CONCESSIONAIRE 16.14. Once the GRANTOR receives the calculation of the outstanding commitments of

payment in favor of the CONCESSIONAIRE, sent by the REGULATOR, as indicated in Clause 16.1 it shall approve them promptly to ensure they are paid and/or considered in the corresponding Law of General Budget.

16.15. If the expiration occurs before the commencement of the Rehabilitation and

Improvement, the CONCESSIONAIRE shall be paid the outstanding AMPO, proportional to the fraction of the year elapsed since the start of the Concession until the Termination date.

16.16. If the Termination occurs during the execution of the Rehabilitation and

Improvement and/or Initial Periodic Maintenance, the following shall be done:

a) The CONCESSIONAIRE shall be paid the outstanding AMPO, proportional to the fraction of the year elapsed since the Date of Signing of the Contract or the last payment of the AMPO until the Expiration date, as appropriate.

b) To pay the Rehabilitation and Improvement, the outstanding Financial Milestone shall be paid, if appropriate, or the progress or the Financial Milestone under construction not completed due to the Termination.

c) To pay the Initial Periodic Maintenance, it shall be valued taking as reference the approved CPIPM. Payment is made according to section 3a) of Appendix 2, Management Trust of ANNEX XI.

The value of the Initial Periodic Maintenance is determined based on the approved CPIPM plus the progress reports not considered in any CPIPM. The schedule of payments is maintained during the corresponding term.

16.17. If the Termination occurs after the Rehabilitation and Improvement and Initial

Periodic Maintenance are accepted until the end of the Concession.

a) The CONCESSIONAIRE shall be paid the outstanding AMPO, proportional to the fraction of the year elapsed since the payment of the last AMPO until the expiration date.


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b) The CONCESSIONAIRE shall be paid the outstanding APIPM according to section 3a) of Appendix 2, Management Trust of this contract.

16.18. Such obligations shall be paid by the GRANTOR with resources of the

Management Trust while it has availability and then budgeted taking into account the provisions of the annual budget Laws, as well as Law Nº 28411 – General Law of the National Budget System.

EFFECTS OF THE TERMINATION 16.19. The effects of the Termination of the Concession are, among others, the

following:

a) La Termination of the Concession produces the obligation of the CONCESSIONAIRE to return the land areas comprised in the Concession Area and to deliver the Concession Assets to the GRANTOR, according to the terms of CHAPTER V of this Contract.

Sixty (60) Calendar Days before the termination of the Contract, the formulation of the Final inventory of assets shall start, with intervention of the REGULATOR. It shall be completed ten (10) Days before the date of termination of the Contract.

In case of expiration by mutual agreement, the final inventory shall be part of this agreement as ANNEX of the Contract to be signed for such purpose.

Sixty (60) Calendar Days before the expiration of the deadline for correction in cases of termination for default, the formulation of the Final Inventory of assets shall start, with the intervention of the REGULATOR. It shall be completed ten (10) Days before the correction period is completed.

In case the correction occurs before the above deadline, the inventory shall be automatically suspended. If it had already been completed it shall have no effect.

The Final Inventory of Assets shall have the approval of the GRANTOR prior opinion of the REGULATOR.

b) Upon Termination of the Concession the activity of the CONCESSIONAIRE ceases and its right to exploit the road infrastructure is extinguished. This right is reassumed by the GRANTOR, except in case the REGULATOR has appointed an auditor and while its performance lasts, without prejudice to the recognition of the rights corresponding to the Allowed Creditors as set out in Clause 11.16.

Likewise, all contracts referred to in Clause 14.2, are extinguished, except for those which the GRANTOR has expressly decided to keep in force and assumed the contractual position of the CONCESSIONAIRE.

c) After the Termination of the Concession, the GRANTOR or the new CONCESSIONAIRE that is appoints shall be in charge of all Subsections, and the GRANTOR shall be responsible of making the final liquidation according to the terms of this Section and the Technical File.

PROCEDURE FOR THE CORRECTION IN CASE OF BREACH BY THE CONCESSIONAIRE


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16.20. In case of serious breach by the CONCESSIONAIRE foreseen in Clause 16.4 or any other obligation that does not have an express procedure of correction regulated in the Contract, the REGULATOR shall grant a deadline to the CONCESSIONAIRE of up to sixty (60) Calendar Days, starting from the date of reception of the requirement, to correct said situation of noncompliance, after which the REGULATOR shall issue its opinion within fifteen (15) Calendar Days. In case the termination grounds are noncompliance by the CONCESSIONAIRE this right shall only be granted if the cases mentioned in subparagraphs a), h), l), m) and q) of Clause 16.4 are verified.

According to the circumstances of each case, the REGULATOR, at its discretion, may grant a longer deadline than the one indicated above.

PROCEDURE FOR THE RESCUE IN CASE OF TERMINATION OF THE CONTRACT

16.21. In case any of the Parties claims the termination of the Concession Contract for any reason, or the GRANTOR unilaterally decides to terminate the Contract, the GRANTOR shall take the necessary measures in order to ensure the continuity of the Service. In case of a temporary impossibility to elect a new CONCESSIONAIRE, and in order to avoid stoppage of service, the REGULATOR will choose a specialized company, under the following conditions:

a) The REGULATOR shall appoint a third specialized party, who will be in

charge of the Exploitation of the Concession and shall comply with all the obligations of the Contract, until it is replaced by a new Administration.

b) The exploitation of the Concession by the specialized company may not be

greater than one (01) calendar year. c) The REGULATOR shall determine the procedure for the election and hiring

of the specialized third party until the replacement of the CONCESSIONAIRE.

d) The costs and expenses incurred by the REGULATOR to carry out the

process of selection and hiring of the specialized company shall be borne by the Party which noncompliance would have given origin to the termination of the Contract. In case it cannot be determined, the costs and expenses shall be borne by the GRANTOR.

The GRANTOR shall determine the procedure for the replacement of the new CONCESSIONAIRE.

CHAPTER XVII: SUSPENSION OF THE OBLIGATIONS FORESEEN IN THIS CONTRACT

17.1 Failure to comply with the obligations by any of the Parties referred to in this Contract, shall not be regarded as cause of noncompliance attributable to any of them as long as and provided that such failure is caused by any of the following grounds and prevents the execution of the Rehabilitation and Improvement, Initial Periodic Maintenance or during the Exploitation:

a) Force majeure or act of God, understood as events, conditions or circumstances not attributable to the Parties, of extraordinary, unforeseeable and irresistible nature, which prevent any of them from meeting the obligations under their responsibility or cause partial, delayed or defective


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compliance. The event shall be beyond the reasonable control of the Party invoking the ground, which, despite all reasonable efforts to prevent or mitigate its effects cannot prevent the establishment of a noncompliance situation. Events include, among others, the following situations:

i. Any act of external, internal or civil war (declared or undeclared), invasion,

armed conflict, blockade, revolution, riot, insurrection, civil commotion or acts of terrorism.

ii. General strikes or labor strikes, protests, violence acts of violence or force made by community, social or political organizations, or large-scale public demonstrations directly affecting the CONCESSIONAIRE through no fault of their own that are not attributable to it and go beyond its reasonable control.

iii. The eventual confiscation, requisition, or total or partial destruction of the infrastructure of the Concession and the impossibility of recovery, caused by order of any public authority, for reasons not attributable to the CONCESSIONAIRE, seriously affecting the execution of the Contract preventing the CONCESSIONAIRE from complying with the obligations under its responsibility.

iv. Discovery of archaeological remains that are of such magnitude that prevent the CONCESSIONAIRE from definitively meeting the obligations under its responsibility.

b) Agreement between the parties, resulting from circumstances other than those referred to in the previous Subparagraph, in which case it shall be necessary to have the prior opinion of the REGULATOR.

c) Other cases expressly foreseen in this Contract.


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PROCEDURE FOR THE DECLARATION OF SUSPENSION

17.2 Except for the ground mentioned in Subparagraph b) of Clause 17.1, if one of the Parties cannot fulfill the obligations imposed by this Contract due to any of the events specified in that clause, such Party shall notify the other Party and the REGULATOR, in writing, within seven (7) Days from the occurrence of the event, giving the reasons of the breach, details of such an event, the obligation or condition affected, the estimated period of total or partial restriction of its activities and the degree of expected impact, the mitigation measures adopted, the proposal of insurance regime (which may include measures such as the endorsement or transfer in favor of the GRANTOR of the insurance policies that had been taken out by the CONCESSIONAIRE), of contractual guarantees and of other obligations whose compliance is not directly affected by the event. Additionally, the Party that is affected by the event shall keep the other Party informed of the development thereof.

Within fifteen (15) Days from the notification of the circumstance under which the temporary suspension of the obligation(s) or suspension of Concession was invoked, the REGULATOR shall issue and notify its technical opinion to the Parties. In case the CONCESSIONAIRE has formulated the communication stated in the preceding paragraph, the deadline for the GRANTOR to declare the suspension shall be fifteen (15) Days from the receipt of the technical opinion of the REGULATOR. In case the GRANTOR has formulated the communication stated in the preceding paragraph, the deadline for the GRANTOR to declare the suspension shall be fifteen (15) Days from the receipt of the technical opinion of the REGULATOR and the opinion of the CONCESSIONAIRE. In all cases, the GRANTOR shall declare the suspension of the obligation(s) of the Concession, in accordance with the Applicable Laws and Regulations. If the obligation(s) or the Concession is(are) affected by an event of force majeure or act of God, it will be automatically suspended from the occurrence of the event of force majeure or act of God and throughout the event.

EFFECTS OF DECLARATION OF SUSPENSION

17.3 The duty of a Party to fulfill its obligations here imposed will be temporarily suspended during the period in which such Party is unable to comply with them, by any of the grounds specified in Clause 17.1, but only as long as such impossibility exists.

The aforementioned is without prejudice to the obligation of the CONCESSIONAIRE to restore the Passage as far as possible, once the ground which gave rise to the suspension ceases, and in the shortest possible time, in accordance with the provisions of ANNEX I.

The Party affected by an event of force majeure, shall immediately notify the other Party and the REGULATOR when such event has ceased and does not prevent it from continuing to meet its obligations, and shall thereafter reassume the fulfillment of the suspended obligations of the Contract. The force majeure or act of God shall not release the Parties of the fulfillment of the obligations that are not suspended by such events, nor relieve the CONCESSIONAIRE of the application of penalties for infringements duly notified by the REGULATOR before the declaration of suspension.


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17.4 In case the suspension exceeds more than one hundred and eighty (180) Calendar Days from the respective declaration, the Party affected by such suspension may invoke the Termination of the Contract.

17.5 Noncompliance with obligations produced as a consequence of the assumptions

cases indicated in Clause 17.1, shall not be punished with the penalties indicated in this Contract, according to the terms and conditions foreseen. In case the REGULATOR declares the request of suspension of the Concession inadmissible, the penalties corresponding to the CONCESSIONAIRE may be applied retroactively.

MITIGATION 17.6 The Party that has notified an act of God or event of force majeure shall make

reasonable efforts to mitigate the effects of such events within the compliance with its obligations.

CHAPTER XVIII: RESOLUTION OF DISPUTES APPLICABLE LAW 18.1 The Contract shall be governed by and construed in accordance with the

Applicable Laws and Regulations. Therefore, it states that the content, execution, conflicts and other consequences arising from it, shall be governed by that law, which the CONCESSIONAIRE declares being aware of.

SCOPE OF APPLICATION

18.2 This CHAPTER regulates the resolution of disputes that may arise between the Parties during the Concession and those related to the termination of the Contract and the Termination of the Concession, with the exception of those disputes arising from administrative acts issued by the REGULATOR in the exercise of its functions, regarding the provisions of Law Nº 27332, Law Nº 26917, Legislative Decree Nº 1224 and their respective Regulations.

In accordance with Article 62 of the Political Constitution of Peru, it is recognized that disputes arising from the contractual relationship shall be settled by direct negotiation and by arbitration, according to the protection mechanisms provided for in the Contract.

Notwithstanding the provisions of the preceding paragraphs, the Parties acknowledge that the challenge of the decisions of the REGULATOR (issued within the framework of its normative, regulatory, supervising, auditing, sanctioning functions or dispute settlement function), or other public bodies in the exercise of its administrative powers conferred by express provision, shall be conducted according to contentious administrative proceedings. In cases different than those established in the paragraph above, the obligation of the arbitrators to allow the participation of the REGULATOR, set forth in Article 23° of Legislative Decree Nº 1224, is for arbitration proceedings that address decisions and matters related to the competence of the REGULATOR. In these cases, the REGULATOR shall act under the principle of regulatory autonomy set forth in Law Nº 27332 and its creation law.


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CRITERIA FOR INTERPRETATION 18.3 In case of divergence in the interpretation of this Contract, the following order of

priority to solve this situation shall be followed:

a) The Contract and its amendments; b) Circulars referred to in the Bidding Terms and Conditions; and c) Bidding Terms and Conditions.

18.4 The Contract is signed only in Spanish language. If the event of any difference

between the Contract and any translation thereof, the text of Contract in Spanish shall prevail. Translations of this Contract shall not be considered for purposes of its interpretation.

The terms “ANNEX”, “Appendix” “Clause”, “CHAPTER”, “Section” and “Subparagraph” are understood to refer to this Concession Contract, unless that from the context it is unmistakably deduced and without doubt that they refer to another document.

18.5 The deadlines established shall be calculated in days, months or years, as appropriate.

The headings contained in the Contract are for identification purposes only and shall not be considered as part of the Contract, to limit or expand its content or to determine rights and obligations of the Parties.

18.6 Terms in the singular shall include the same terms in the plural and vice versa. Terms in masculine include the feminine and vice versa.

18.7 The use of disjunction "or" in an enumeration shall be understood as comprising

in exclusive manner any of the elements of such enumeration. 18.8 The use of conjunction “y” in an enumeration shall be understood as comprising

all the elements of such enumeration or list. 18.9 All the rates, revenue, costs, expenses and similar the CONCESSIONAIRE is

entitled to or is responsible of for the provision of the Services shall be collected or paid in the currency determined under the Applicable Laws and Regulations and the terms of Contract.

WAIVER TO DIPLOMATIC CLAIMS 18.10 The CONCESSIONAIRE and its partners, shareholders or participation holders

expressly, unconditionally and irrevocably waive to any diplomatic claim for controversies or conflicts that may arise from the Contract.

DIRECT NEGOTIATION 18.11 The Parties declare that it is their will that all conflicts or uncertainties with legal

significance on matters of available character that may arise regarding the interpretation, execution, compliance, and any aspect relating to the existence, validity or effectiveness of the Contract or Termination of the Concession, with the exception of the administrative acts issued by the REGULATOR in the exercise of its functions referred to in Clause 18.2, shall be settled by direct negotiation between the Parties.


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The deadline for direct negotiation in the event of national arbitration shall be forty-five (45) Days from the date on which one Party notifies the other in writing, unless the Parties have submitted the dispute to the procedure and other applicable provisions in case of the Amiable Compositeur provided for in Title VIII of Supreme Decree Nº 410-2015-EF, Regulations of Legislative Decree Nº 1224. Any of the Parties in the settlement process or in disagreement may terminate in advance or may even state that it renounces to make use of the direct negotiation. The request to initiate direct negotiation shall include a comprehensive description of the dispute and its appropriate foundation, and be accompanied by all relevant evidence.

It should be noted that, in accordance with the provisions of section 68.3 of article 68 of Supreme Decree Nº 410-2015-EF, Regulation of Legislative Decree Nº 1224, the disputes that may be submitted to the Amiable Compositeur proceeding shall only be those disputes that may be submitted to arbitration, in accordance with the provisions of article 2 of Legislative Decree Nº 1071, which Regulates Arbitration. Therefore, submission to the Amiable Compositeur proceeding may not be possible for the decisions of the REGULATOR (issued within the framework of its normative, regulatory, supervising, auditing, sanctioning functions or dispute settlement function), or other entities that are issued in the exercise of its administrative powers conferred by express provision, whose claim path is the administrative complaint. Submission to the Amiable Compositeur proceeding shall not be possible either for disputes subject to Law Nº 28933: Law that establishes the coordination and response system of the State in international investment disputes. The Amiable Compositeur shall propose a formula for solution of disputes, which, if accepted partially or totally by the Parties, will produce the legal effects of a transaction.

On the other hand, in the case of international arbitration, the period of negotiation or direct negotiation shall not be less than six (6) months. This period shall be calculated from the date on which the party invoking the Clause notifies its request to initiate direct negotiation to the Ministry of Economy and Finance in its capacity as Coordinator of the Coordination and Response System of the State in International Investment Disputes under the provisions of Law Nº 28933 and its regulations approved by Supreme Decree Nº 125-2008-EF and amendments. The request to initiate direct negotiation shall include a comprehensive description of the dispute and its appropriate foundation, and be accompanied by all relevant evidence.

The deadlines to which the preceding paragraphs refer to may be extended by joint decision of the Parties, which agreement shall be in writing, provided that there are real possibilities that, if having this additional time, the conflict will be resolved through direct negotiation.

If the Parties, within the term of direct negotiation, do not resolve the conflict or uncertainty raised, they shall define it as a conflict or uncertainty of technical or non-technical nature, as appropriate. When the Parties reach no agreement on the nature of the dispute, both Parties shall support their position in a written communication that will deliver to their counterpart. In it, they shall explain the reasons why they consider that the dispute is of a technical or non-technical nature.


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Technical conflicts or uncertainties (each one, a Technical Dispute) shall be resolved according to the procedure set forth in Subparagraph a) of Clause 18.12. Conflicts or uncertainties that are not technical (each one a Non- Technical Dispute) shall be resolved according to the procedure provided for in Subparagraph b) of Clause 18.12. If the Parties fail to agree within the term of direct negotiation whether the conflict or dispute arisen is a Technical Dispute or Non-Technical Dispute, or if the conflict has components of Technical Dispute and Non-Technical Dispute, then such conflict or uncertainty shall be considered a Non-Technical Dispute and shall be settled according to the respective procedure under Subparagraph b) of Clause 18.12. Without prejudice to this Clause, in the direct negotiation stage, at the request of any of the parties, disputes may be submitted to the Dispute Resolution Board, which issues a binding and enforceable decision, without prejudice to the power to resort to arbitration, unless agreed otherwise between the parties. In case of arbitration, the decision made is considered a precedent.

The proceeding indicated in the preceding paragraph is not applicable in case of disputes that are subject to the application of dispute resolution mechanisms and proceedings referred to in Law Nº 28933, Law that establishes the Coordination and Response System of the State in International Investment Disputes, or those provided for in the international treaties that obligate the Peruvian Government. The Dispute Resolution Board may be formed at any moment after the signing of the contract, in order to additionally perform functions to deal with queries and issue recommendations regarding subjects and/or matters requested by the Parties of this Contract. The Dispute Resolution Board is made up of three (03) experts appointed by the parties directly or by delegation to a Center of Institution managing alternative mechanisms for conflict resolution. The members of the Dispute Resolution Board carry out their activities in an impartial and independent manner, and may be nationals of a country different to that of the Parties.

ARBITRATION

18.12 Modalities of arbitration proceedings:

a) Arbitration of Conscience.- Each and every one of the Technical Disputes that cannot be resolved directly by the Parties within the term of direct negotiation shall be submitted to arbitration of conscience, pursuant to Section 3 of Article 57 of Legislative Decree Nº 1071, in which the arbitrators shall decide according to their skills and to the best of their knowledge. Arbitrators may be foreign or domestic experts, but in all cases, must have extensive experience in the field of the respective Technical Dispute, and shall have no conflict of interest with any of the Parties at the time of and after their appointment as such. The Arbitral Tribunal may request the Parties the information it deems necessary to resolve the Technical Dispute it is aware of, and as a result may present to the Parties a conciliation proposal, which may or may not be accepted by them. The Arbitral Tribunal may present all the evidence and


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request to the Parties or third Parties the evidence it deems necessary to resolve the claims raised. The Arbitral Tribunal shall prepare a draft decision to notify the Parties within thirty (30) Days after its installation, having the Parties a term of five (5) Days to prepare and submit to the Court their comments on that preliminary decision. The Arbitral Tribunal shall issue its final decision on the Technical Dispute raised within ten (10) Days following the receipt of the comments from the Parties, its preliminary decision or the expiration of the deadline to submit those comments, whichever comes first. The procedure for the resolution of a Technical Dispute shall be carried out in Lima, Peru. Exceptionally, and for the nature of the specific case, the Arbitral Tribunal will move to another location just in order to present evidence as an assessment, an ocular inspection or any other form of evidence that is necessary to present in another location, for a period not longer than ten (10) Days. The members of the Tribunal shall keep absolute reserve and maintain confidentiality on all information they are aware of due to their involvement in the resolution of a Technical Dispute.

The dispute shall be settled through national arbitration, being of application the Regulations of the Arbitration Center of the Chamber of Commerce of Lima, in all matters not provided in this Contract.

b) Arbitration of Law.- Non-Technical Disputes shall be settled by arbitration of law, proceeding in which the arbitrators must resolve in accordance with the applicable Peruvian law. The arbitration of law may be local or international, according to the following: i) When the Non-Technical Disputes have an involved amount that exceeds

Thirty Million Dollars (US$ 30'000,000) or its equivalent in national currency, the Parties shall endeavor to resolve the dispute by direct negotiation within the deadline set forth in Clause 18.11 in the case of international arbitration, and may be extended by joint decision of the Parties under the established terms.

ii) If the Parties do not reach an agreement within the deadline of direct

negotiation referred to in the preceding paragraph, the raised disputes shall be settled by international arbitration of law, administered by the International Centre for Settlement of Investment Disputes (ICSID) being the regulations and rules of ICSID applicable to the Arbitration proceedings under the Convention on the Settlement of Investment Disputes between States and Nationals of other States, approved by Peru by Legislative Resolution Nº 26210 to which rules the Parties submit unconditionally. Alternatively, the Parties may agree to submit the dispute to another jurisdiction different from the ICSID if deemed convenient.

iii) For purposes of processing international arbitration proceedings, in accordance with the arbitration Rules of ICSID, the GRANTOR on behalf of the State of the Republic of Peru declares that the CONCESSIONAIRE shall be considered as "National of Another Contracting State" for being under foreign control as provided in subparagraph b) of section 2 of article 25 of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, and the CONCESSIONAIRE agrees to be considered as such.


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iv) The arbitration shall take place in the city of Washington DC, USA, and shall be conducted in Spanish language, without prejudice that this decision depends on practical aspects such as the selection of the law firm, the availability of arbitrators, experts and witnesses to be known once the arbitration has been initiated.

v) If for any reason the ICSID declines to assume the arbitration initiated under this Clause, the Parties in advance agree to submit, under the same terms outlined above, the Non-Technical Disputes that: (a) have an amount involved that exceeds Thirty Million Dollars (US$ 30'000,000) or its equivalent in national currency, or (b) the Parties do not agree on the amount of the disputed issue, to the UNCITRAL Arbitration Regulation (acronym in English) or CNUDMI (acronym in Spanish). In that case, the arbitration shall be held in Lima, Peru, in Spanish language, and the Peruvian Law shall apply.

vi) Non-Technical Disputes in which the amount involved is equal to or less than Thirty Million Dollars (US$ 30'000,000), or its equivalent in national currency and those disputes of pure law that are not quantifiable in money, shall be settled by arbitration of law, through a proceeding to be followed in accordance with the Regulations of the Arbitration Center of the Chamber of Commerce of Lima, to which regulations the Parties submit unconditionally. The Parties may submit the disputes to the rules or procedures of other institution other than the Chamber of Commerce of Lima; for this purpose, an express agreement in writing shall be required. The place of arbitration shall be the city of Lima, capital of the Republic of Peru; the official language to be used shall be Spanish; and the applicable law, the Peruvian law.

COMMON PROCEDURAL RULES 18.13 Both for Arbitration of Consciousness referred to in Subparagraph a) of Clause

18.12 and for the Arbitration of Law referred to in Subparagraph b) of Clause 18.12, whether in its international or national mode, the following general provisions shall be equally applied:

a) The Arbitral Tribunal shall be made up of three (3) members, and shall

preferably elect one (01) professional with experience of at least five (05) years on the controversial subject or a lawyer with experience in regulation or concessions, according to nature of the dispute. The indicated requirement is not applicable in case of disputes that are subject to the application of dispute resolution mechanisms and proceedings referred to in Law Nº 28933, Law that establishes the Coordination and Response System of the State in International Investment Disputes, or those provided for in the international treaties that obligate the Peruvian Government. Each Party shall appoint an arbitrator within sixty (60) Days from the request and the third arbitrator shall be appointed by agreement between the two arbitrators appointed by the Parties, who in turn shall act as President of the Arbitral Tribunal. If one of the Parties fails to appoint its Arbitrator or if the two arbitrators appointed by the Parties fail to reach an agreement on the appointment of the third arbitrator within ten (10) Days following the formal request for arbitration by one of the Parties or at the date of appointment of the second arbitrator, the second and/or third arbitrator shall be appointed upon the request of either Party, by the Chamber of Commerce of Lima, in the


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case of Arbitration of Consciousness, the Arbitration of national law, and exceptionally shall act as appointing authority, in the case of Arbitration promoted under the UNCITRAL (CNUDMI) rules; or by ICSID in the case of arbitration of international law.

b) Notwithstanding the administrative acts referred to in Clause 18.2, which are

exempted from this section, the Arbitral Tribunal may replace, at its discretion, any difference or gap existing in the legislation or in the Contract, by applying the general principles of law and the Agreements, Conventions and/or Treaties to which the Republic of Peru is a signatory.

c) The Parties agree that the award issued by the Arbitral Tribunal shall be final

and binding. In this regard, the Parties shall consider it as final judgment with authority of res judicata. Accordingly, the Parties waive appeals for reconsideration, appeal, or any other means contesting the arbitration decision declaring that it shall be binding, of definitive compliance and immediate execution, except in proceedings provided for in Section 5 of Chapter IV of the Convention on the Settlement of Investment Disputes between States and Nationals of other States and in the grounds specifically provided in article 63 of Legislative Decree Nº 1071 and the ICSID Convention of Arbitration Rules, where applicable.

d) During the development of the arbitration, the Parties shall continue to comply

with its contractual obligations, provided it is possible, including those that are the subject of arbitration. If the arbitration matter is the compliance of obligations guaranteed by the Performance Bond of Execution of Rehabilitation and Improvement, Performance Bond of Execution of Initial Periodic Maintenance, Performance Bond of the Concession Contract and/or Performance Bond of Execution of Additional Works, if applicable, the corresponding deadline shall be suspended and such guarantees may not be executed for the reason that originated the arbitration and shall be maintained in force during the arbitration proceedings.

e) The Arbitral Tribunal shall have the obligation to allow the participation of the

REGULATOR in those arbitration proceedings that discuss decisions or issues related to its competence. In that event, the REGULATOR may use procedural defense mechanisms recognized in the Applicable Laws and Regulations without prejudice to its acting under the principle of regulatory autonomy established in Law Nº 27332 and its creation law, except in cases of disputes that are subject to the application of dispute resolution mechanisms and proceedings referred to in Law Nº 28933, Law that establishes the Coordination and Response System of the State in International Investment Disputes, or those provided for in the international treaties that obligate the Peruvian Government.

All expenses resulting from the resolution of a Technical or Non-Technical Dispute, including the fees of the arbitrators participating in the resolution of a dispute, shall be covered by the losing Party. The same rule applies if the respondent or counterclaim Party acknowledges the claim of the plaintiff or counterclaimant. Also, the claimant or counterclaimant who desists from the claim shall bear the costs. If the proceedings end without a decision on the merits of the claim by reason of settlement or conciliation, such expenses shall be covered in equal parts by the plaintiff and the defendant. Also, in case the award partially


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favors the positions of the Parties, the Arbitral Tribunal shall decide the distribution of these expenditures.

The provisions of this Clause exclude the costs and expenses such as advisory fees, internal costs or other that are individually attributable to a Party.

CHAPTER XIX: MODIFICATIONS TO THE CONTRACT

19.1 Any request for amendment, addition or modification to this Contract by either

Party shall be submitted to the other Party, with a copy to the REGULATOR, with the appropriate technical, economic and financial support and with the agreement of the Allowed Creditors as established by the acts and contracts of Allowed Guaranteed Indebtedness, if applicable, as provided for in the Regulation of Legislative Decree Nº 1224, approved by Supreme Decree Nº 410-2015-EF and the Applicable Laws and Regulations that replace it.

The agreement of modification shall be mandatory for the Parties only if it is written and signed by the duly authorized representatives of the Parties. For purposes of the provisions of the preceding paragraph it must be noted that the modification of any of the terms of this Contract requires the prior opinion of the REGULATOR and the Ministry of Economy and Finance, within their remit, which will issue their opinion on the joint proposal by the Parties. Also, the opinion of the competent public entities shall be required, according to the conditions required in Legislative Decree Nº 1224, its Regulation approved by Supreme Decree Nº 410-2015-EF and the Applicable Laws and Regulations that modify or replace them.

The request made to that effect by the CONCESSIONAIRE or the GRANTOR shall respect the nature of the Concession, the competence conditions of the promotion process and maintain the economic and financial balance of the benefits provided by the Parties.

In accordance with Article 22 of Legislative Decree Nº 1224 and article 53° of the Regulation of Legislative Decree Nº 1224, the Parties may amend this Contract, subject to agreement in writing, for duly founded cause and when necessary in the public interest, maintaining the competence conditions of the promotion process and the economic and financial balance of the benefits provided by the Parties, trying not to alter risk allocation and the nature of the project.

19.2 Notwithstanding the provisions of this CHAPTER, to process contractual

modifications, the provisions of Articles 53° to 57° of Supreme Decree Nº 410-2015-EF, Regulation of Legislative Decree Nº 1224 and the Applicable Laws and Regulations that modify or replace them shall apply to this Contract.


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CHAPTER XX: DOMICILES

DETERMINATION 20.1 Unless expressly agreed to the contrary of what is recorded in the Contract, all

notices, summons, requests, demands and other communications related to the Contract shall be in writing and shall be deemed validly made when they have the respective acknowledgment of receipt or when they are sent by courier, by telex or fax, upon verification of receipt, to the following addresses:

If addressed to the GRANTOR: Name: Ministry of Transportation and Communications. Address: Jirón Zorritos Nº 1203, Lima 1. Attention: General Director of Transport Concessions If addressed to the CONCESSIONAIRE: Name: Address: Attention: If addressed to the REGULATOR: Name: Supervisory Board of Investment in Public Transportation

Infrastructure – OSITRAN Address: Av. República de Panamá 3659 Urb. El Palomar – San Isidro Attention: Director of OSITRAN

CHANGES OF DOMICILE 20.2 Any change of address shall be notified in writing to the other Party of the Contract

and to the REGULATOR. This new domicile shall be determined in compliance with the requirements of the preceding Clause.

Signed in Lima, in four (4) original documents, one for the GRANTOR, another for the REGULATOR, one for PROINVERSIÓN and the fourth one for the CONCESSIONAIRE, on .................... ......., 201__.


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ANNEX I

PROCEDURES FOR THE EXPLOITATION AND CONTROL OF THE CONCESSIONAIRE’S MANAGEMENT OF THE LONGITUDINAL DE LA SIERRA

HIGHWAY SECTION 4: HUANCAYO-IZCUCHACA-MAYOCC-AYACUCHO/AYACUCHO-ANDAHUAYLAS-PTE SAHUINTO/DV. PISCO –

HUAYTARÁ - AYACUCHO


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INDEX

SECTION 1: ROAD CONSERVATION 1. INTRODUCTION

2. CONSERVATION BY SERVICE LEVEL

3. GENERAL PROCEDURES

Conservation Plans Service Level Assessment Program Noncompliance and Penalties Communications

4. CONSERVATION MANAGEMENT ASSESSMENT FOR THE ROAD

General Road Conservation Management Assessment Program Continuous Assessments Semi-Annual Assessments Annual Assessments

5. CALCULATION OF SERVICE LEVELS General Individual Service Levels Global Service Level of a Subsection Global Service Level of the Contract

SECTION 2: CONSERVATION OF ADDITIONAL WORKS 6. CONSERVATION MANAGEMENT ASSESSMENT FOR ADDITIONAL WORKS

Procedures Noncompliance and Penalties

SECTION 3: EXPLOITATION 7. ASSESSMENT OF THE EXPLOITATION MANAGEMENT OF THE

CONCESSIONAIRE Condition Parameter to Use Procedures Service Level and Response Time Noncompliance and Penalties

8. GENERAL CONDITIONS FOR ROUTINE ROAD CONSERVATION

SECTION 4: OTHER PROVISIONS 9. EMERGENCIES AND ACCIDENTS

Deadlines for Emergency and Accident Service Noncompliance and Penalties

10. EXCEPTIONAL OR SPECIAL SITUATIONS Conservation in Critical Points Conservation in unpaved Subsections Congestion in Subsections Other Situations


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APPENDICES

Appendix 1: Road subsections of the Longitudinal de la Sierra Highway Section 4:

Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte Sahuinto/Dv. Pisco – Huaytará – Ayacucho

Appendix 2: Condition Parameters and Service Levels required for the management of the CONCESSIONAIRE of the Longitudinal de la Sierra Highway Section 4: (Individual Service Levels and response times)

Appendix 3: Communication Formats Appendix 4: Formats for the Calculation of the Service Level Appendix 5: Format for the Calculation of the Global Service Levels (Individual

Subsections and the entire Concession) Appendix 6: Global Service Levels Required (by Subsection and for the Concession) Appendix 7: Manual for Defect Survey Appendix 8: Terms of Reference: Preparation of the Technical and Legal Diagnosis,

Plan of Physical and Legal Restructuring and preparation of Individual Property Files

Appendix 9: Condition parameters and Service Levels required in the Subsections that the GRANTOR shall deliver to the CONCESSIONAIRE where no interventions of Rehabilitation and Improvement or Initial Periodic Maintenance shall be executed

Appendix 10: Technical information for the installation of ducts and chambers Appendix 11: Toll Systems for the standardized operation Appendix 12: Delivery of bridges comprised in the San Clemente – Ayacucho

Subsection


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SECTION 1

ROAD CONSERVATION 1. INTRODUCTION

1.1 This ANNEX I is an integral part of the Concession Contract of the Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte Sahuinto/Dv. Pisco – Huaytará - Ayacucho and Appendix 1 defines Subsections.

1.2 The terms used have the same meaning and scope as in the main text of the Contract, according to the definitions listed in its Item 1.11.

1.3 This ANNEX aims at establishing additional contractual obligations for the execution of Conservation tasks as set out in the General Technical Specifications for Road Conservation (Directorial Resolution Nº 05-2014-MTC /March 27, 2014), and the control of the provision of services provided by the CONCESSIONAIRE.

2. CONSERVATION BY SERVICE LEVEL

2.1 The status of the Concession Assets and road infrastructure shall be expressed through condition parameters, which will refer to several aspects: pavement condition, condition of drains, signal status, passage quality, etc. The acceptable limits for measuring condition parameters, are given by the "Service Levels" established in this ANNEX.

2.2 The CONCESSIONAIRE is obliged to schedule and timely perform the Conservation tasks that allow that at any time the measurement of the condition parameters is equal to or above the minimum thresholds (or below maximum thresholds) set by the Service Levels defined in this ANNEX.

2.3 The CONCESSIONAIRE shall have available at all times the structure, organization and resources (physical, technical and administrative), so as to program and run throughout the period of the Concession, the tasks of Periodic and Routine Conservation and Road Emergencies that are necessary so that the measurement of the condition parameters is at all times equal to or above the minimum thresholds (or below maximum thresholds) set by the Service Levels defined in this ANNEX.

2.4 To the CONCESSIONAIRE, this means to detect by itself those condition parameters whose measurement is eventually close to the permissible limits established by the appropriate Service Levels and to take the necessary measures for their timely correction, in order to be always within the Service Levels defined in this ANNEX I.

2.5 Service Levels may be related to particular aspects of the state of the rolling surface, the state of drains, the state of the security elements, etc. In this case they are called Individual Service Levels. Moreover, both for each Subsection and the Concession as a whole it is possible to establish Service Levels that comprise all aspects; these are called Global Service Levels.

2.6 During the Concession term, the CONCESSIONAIRE shall permanently comply with the Individual Service Levels set forth in Appendix 2 of this ANNEX and with the Global Service Levels established for each Subsection in Appendix 6 of this ANNEX.


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2.7 The REGULATOR directly or through its designee, shall carry out the tasks for the monitoring of compliance with the Service Levels, namely: (a) verify that the condition parameters are kept equal to or above the minimum thresholds (or below maximum thresholds) established by the Service Levels defined in Appendix 2 of this ANNEX I, and (b) verify that Global Service Levels are kept within the values defined for each Subsection and for the Concession in Appendix 6 of this ANNEX.

2.8 Compliance with Individual Service Levels shall be continuously and unexpectedly checked, while compliance with Global Service Levels shall be checked regularly, as indicated in Paragraph 5.4 to 5.7 of this ANNEX.

3. GENERAL PROCEDURES

Conservation Programs 3.1 As stated in CHAPTER VII of the Contract, the CONCESSIONAIRE shall submit

for approval of the REGULATOR a "Conservation program” for the relevant period, describing the tasks planned and the corresponding designs and specifications.

3.2 The Conservation program shall be properly justified in its technical aspects,

indicating the state analysis on which it is based, the indicators considered and the policies applied for decision making.

3.3 Conservation programs to be submitted by the CONCESSIONAIRE to the

REGULATOR and the GRANTOR shall include the policies and schedule of the operations to perform, with their corresponding measurements and technical justification, all in accordance with the Technical Studies and the provisions of the Agreement. The program shall ensure uninterrupted transit during its execution.

3.4 The first Conservation program in the Subsections shall be submitted to the

REGULATOR within the first sixty (60) Calendar Days from the reception of the road that will be delivered by the GRANTOR.

The following Conservation programs shall be submitted to the REGULATOR, within the first fifteen (15) Calendar Days of December of the year before the execution of the Conservation. Likewise, in the case of last Year Concession, the Conservation program shall include the activities to be held until the expiration date of the Concession. For purposes of the Periodic Conservation, the CONCESSIONAIRE shall submit the respective Technical File to the REGULATOR and the GRANTOR, after the favorable opinion of the REGULATOR of the Engineering, the GRANTOR shall revise the complete file (Engineering and Budget) and shall approve the mentioned File.

3.5 After the first referential Conservation program and up to the Termination of the Concession, the CONCESSIONAIRE shall submit during the first seven (7) Days of each month, a report describing the Conservation activities carried out in the previous month, indicating the variations with respect to the provisions of the annual Conservation program and its justification.

3.6 Failing to comply with the annual submission of the Conservation program and

monthly reports under the mentioned terms, conditions and deadlines, shall result in the application of a penalty according to Table Nº 4 del ANNEX IX.

3.7 This program may be subject to periodic adjustments and evaluations either at the

request of the Parties or ex officio by the REGULATOR.


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3.8 Notwithstanding the foregoing, three (3) years before the estimated date of the

termination of the Concession, the GRANTOR and the REGULATOR may make the necessary revisions across the entire road infrastructure of the Subsections, to determine in coordination with the CONCESSIONAIRE, the activities that the CONCESSIONAIRE shall perform for the road to be in optimal conditions of use and Exploitation, and that therefore the Subsections, meet for a period of at least three (03) years following the reversal of goods, the Service Levels required in ANNEX I. Service Level Assessment Program

3.9 The CONCESSIONAIRE shall implement a "Service Level Assessment Program"

to measure the results of its interventions. The determination of the scope of this program shall be coordinated with the REGULATOR.

3.10 The CONCESSIONAIRE shall perform the task in such manner as it considers appropriate. As a guide, the working procedure proposed in Sections 4 and 5 of this ANNEX.

3.11 For surveying tasks of the "Service Level Assessment Program", the CONCESSIONAIRE shall make use of its own personnel and equipment.

3.12 The REGULATOR may request the CONCESSIONAIRE all information on the "Service Level Assessment Program", which must be submitted within thirty (30) Calendar Days of receipt of the request.

3.13 The content of the reports of the "Service Level Assessment Program" performed

by the CONCESSIONAIRE shall be the sole responsibility of the same and shall not represent the opinion of the REGULATOR.

Noncompliance and Penalties

3.14 As set forth below in Item 4 of Section 1 of this ANNEX, the detection of poor condition parameters shall result in the REGULATOR (or whoever it may determine) to send a "Notice of detection of poor condition parameter" to the CONCESSIONAIRE indicating the defect found, the kilometer markers between which it is located and the deadline for rectification. Failing to correct the defect in time or form shall be considered a breach and will give rise to a penalty as provided in Table Nº 4 of ANNEX IX of the Concession Contract.

3.15 For its part, the verification of the failure to maintain a global service level shall

result in the application of a penalty according to Table Nº 4 of ANNEX IX and eventually, in the termination of the Contract as indicated in the Concession Contract.

Communications

3.16 The “Notices of detection of poor condition parameter” as well as the “Notices of Noncompliance” or other communications to be issued by the REGULATOR, shall be submitted to the CONCESSIONAIRE in writing and at its office. Communications shall be deemed received from 8 am of the first Day following the issuance of the same.


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3.17 Appendix 4 of this ANNEX includes the formats of communication notes to use between the CONCESSIONAIRE, the REGULATOR and/or its representative in the event that poor condition parameters are detected.

4. CONSERVATION MANAGEMENT ASSESSMENT FOR THE ROAD 4.1 The CONCESSIONAIRE shall use the kilometric referencing established by the

GRANTOR in the entire road granted. Road Conservation Management Assessment Program.

4.2 To ensure that the Service Levels provided by the CONCESSIONAIRE are always within the permissible values, the REGULATOR (or its designee) shall implement a Concession Management Assessment Program or any other mechanism enabling it to verify compliance with the Individual and Global Service Levels and to identify eventual defects in the way. Assessments to be carried out are: Continuous Assessments, Semi-annual Assessments and Annual Assessments.

4.3 The specific objectives of the Road Conservation Management Assessment

Program or another one are: (a) verify compliance with the Individual Service Levels; (b) verify compliance with the global service level provided by the CONCESSIONAIRE; and (c) identify the existence of eventual defects in the Road.

4.4 For the Road Conservation Management Assessment Program, the survey

methodologies indicated in Appendix 7 of this ANNEX.

Continuous Assessments 4.5 The REGULATOR shall perform Continuous Assessments of all Subsections of

the road, in order to identify localized defects and to verify compliance with the Individual Service Levels. The regulator may also supervise the work conditions or practices of the CONCESSIONAIRE so that they are not unsafe for Users, and may supervise the construction procedures in order to verify compliance with the Technical Files and contractual obligations.

4.6 The REGULATOR shall perform Continuous Assessments at the time and places it deems appropriate, without prior notice to the CONCESSIONAIRE. It may also use the information provided by Users of road infrastructure or by the GRANTOR to detect poor condition parameters.

4.7 If during any Continuous Assessment poor condition parameters are detected in

any evaluated Subsection, The REGULATOR shall issue a “Notice of poor condition parameter” for each section with defects (indicated by the kilometer markers between which it is located).

4.8 Upon receipt of the “Notice of poor condition parameter”, the CONCESSIONAIRE

shall carry out the work to raise again the quality of the road to the required Service Levels, having for that purpose the deadlines indicated in Appendix 2 of this ANNEX.

4.9 In the case of defects caused by natural disasters or accidents, which in the opinion

of the REGULATOR are particularly serious, the REGULATOR may extend the deadlines for correction set forth in Appendix 2 of this ANNEX.


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4.10 When the CONCESSIONAIRE completely repairs the defects listed in the “Notice of poor condition parameter”, it shall communicate in writing or by fax to the REGULATOR informing about the completion of the repair.

4.11 If the REGULATOR or its designee finds that no repairs have been made in the

defects listed in the “Notice of poor condition parameter” within the established deadlines, the REGULATOR shall issue a “Notice of Noncompliance”, applying the corresponding penalties and setting new deadlines to achieve the required Service Levels. The new deadlines will not determine the suspension of the corresponding penalties as set forth in Table Nº 4 of ANNEX IX, until the defects indicated in the corresponding “Notice of Noncompliance” are remedied.

4.12 Conservation of semi-paved or paved detours shall be subject to continuous

assessment only, so those elements will not be considered in the semi-annual or annual assessments. If necessary, the criterion of exceptional or special situation in Section 4 of this ANNEX will be used to develop criteria to be applied to the assessment of Conservation of detours.

Semi-annual Assessments

4.13 The fifth and eleventh month of each Concession Year, the REGULATOR shall

perform a semi-annual assessment to determine the global service level provided by the CONCESSIONAIRE during the current semester for the different Subsections of the Concession.

4.14 The assessment shall be based on a sample of the Subsections of the Concession.

The sample selection shall be made according to the following procedure: a) The Concession shall be subdivided into the Subsections set forth in Appendix

1 of this ANNEX.

b) Each Subsection shall be subdivided into sections of a length equal to one (1) kilometer, thus establishing a total number of sections. (If the total length of the Subsection is not whole, a special section corresponding to the remaining kilometer fraction shall be defined. At least one section shall be defined in each Subsection).

c) The sample size to assess is defined as ten percent (10%) of the total number of sections of each Subsection, chosen at random (it shall be rounded to the next highest whole number). At least one section will be chosen in each Subsection. If a discrete element partially appears in a section, like a bridge, it shall be fully included in that section.

4.15 The REGULATOR shall inform the CONCESSIONAIRE of the dates of a semi-

annual assessment at least fifteen (15) Calendar Days in advance, so that the latter appoints the technical staff that will witness the assessment.

4.16 A report shall be made based on the assessment in three (3) identical copies,

detailing defects and location thereof, and any observations that the REGULATOR (or its representative) may make, as well as considerations that the technical supervisor of the CONCESSIONAIRE deems appropriate. Each of the Parties, the REGULATOR and the CONCESSIONAIRE shall retain a version of this report. The absence of the technical personnel designated by the CONCESSIONAIRE and/or lack of releases in the report shall be considered as an agreement with the results of the assessment made.


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4.17 Regardless of the content of the report, the defects detected on a semi-annual assessment shall be communicated by the REGULATOR to the CONCESSIONAIRE by the procedure of “Notice of poor condition parameter” established for continuous assessments.

4.18 Subsequent to the completion of a semi-annual assessment, the calculation of the

Global Service Level provided by the CONCESSIONAIRE in each Subsection and in the Contract in general shall be made. To this end the evaluation methodology set out in Section 5 of this ANNEX shall be followed.

4.19 Failing to maintain the global service level of a Subsection shall result in the

application of a penalty according to Table Nº 4 of ANNEX IX of the Contract. Failing to comply with the global service level of the Concession shall also result in the application of the penalties indicated in the Contract. Annual Assessments

4.20 Coincidentally with the semi-annual assessment of the eleventh (11) month of each Concession Year, or whenever substantial changes in roughness are deemed to have occurred, the REGULATOR shall make an assessment of it.

4.21 The methodology for roughness measurement is set out in Appendix 7 of this

ANNEX. 4.22 If an annual assessment finds that roughness is higher than allowed in this ANNEX,

the REGULATOR shall issue a “Notice of poor condition parameter”, setting forth the deadline for its correction, according to the deadlines required in Appendix 2 of this ANNEX I.

5. CALCULATION OF SERVICE LEVELS

5.1 During periods in which the Rehabilitation and Improvement and/or initial periodic

maintenance is being carried out in the Subsections by the CONCESSIONAIRE, Service Levels shall not be evaluated nor shall be considered for calculating the Global Service Levels of the Contract. The assessment indicated in Appendix 2B of ANNEX I shall start from the acceptance of the intervened Subsections. The assessment of Service Levels in the Sub Sections where the GRANTOR is intervening shall be made after the reception of the Subsection by the CONCESSIONAIRE. Individual Service Levels

5.2 Appendix 2 of this ANNEX indicates the permissible Service Levels for: rolling surface, berms, drains, bridges and viaducts, Concession area, road safety (vertical and overhead signaling, vertical signaling and elements of entrainment and defense), traffic congestion, congestion in toll units.

5.3 The individual Service Levels shall be assessed according to the values and procedures indicated in Appendices 2 and 7 of this ANNEX I.

Global Service Level of a Subsection

5.4 The calculation of the Global Service Level of a Subsection presented by the CONCESSIONAIRE shall be made in accordance with the evaluation methodology detailed below:


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a) The Concession shall be subdivided into the Subsections set forth in Appendix 1 of this ANNEX I.

b) Each Subsection shall be subdivided into sections of a length equal to one (1) kilometer, thus establishing a total number of sections. If the total length of the Subsection is not whole, a special section corresponding to the remaining kilometer fraction shall be defined. At least one section shall be defined in each Subsection.

c) The sample size to assess is defined as ten percent (10%) of the total number

of sections of each Subsection, chosen at random (it shall be rounded to the next highest whole number).

d) Each selected section is subdivided into ten (10) segments to be evaluated. If

a discrete element partially appears in a section, like a bridge, it shall be deemed fully included.

e) Compliance with Individual Service Levels is analyzed in each segment

(except roughness) for the following items: rolling surface, berm, drains, bridges and viaducts, Concession Area and road safety (Appendix 4 of this ANNEX I shows references for the format of the survey sheets).

f) The number of segments that fail to meet Service Levels for each of the items

(rolling surface, berm, etc.) is quantified in each section. g) To obtain the degree of compliance of each section, a weighting factor is

introduced for each item (rolling surface, berm, etc.) that will multiply the number of segments with deficiencies:

ELEMENT TO ASSESS Weighting Coefficient

Rolling surface 100

Berms 40

Drains, bridges and viaducts 80

Concession Area 40

Road safety 80


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h) The Global Service Level of a Subsection is calculated according to the procedure outlined in the following table:

Aspect

Nº of segments with deficiency of the sample taken from the

Subsection

Weighting Coefficient

Percentage of noncompliance by

aspect

(a) (b) (c)=(a)*(b)/10*Subsection Length in km *10%

Rolling surface

Berm

Drains, bridges and viaducts

Concession Area

Road Safety

Degree of noncompliance of the Subsection (d)=average (c) Global Service Level of the Subsection (e)=100%-(d)

5.5 Permissible values of the Global Service Level for each of the Subsections

according to the Concession Year are as indicated in Appendix 6 of this ANNEX.

Global Service Level of the Concession 5.6 The Global Service Level of the Concession shall be calculated as the average of

the Global Service Levels of each of the Subsections of the Contract, weighted by its length and rounding it up to the corresponding whole.

5.7 Permissible values of the Global Service Level of the Concession for each Year

are indicated in Appendix 6 of this ANNEX I.


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SECTION 2

CONSERVATION OF ADDITIONAL WORKS 6. CONSERVATION MANAGEMENT ASSESSMENT FOR ADDITIONAL WORKS

Procedures 6.1 Additional Works are those defined in Clause 1.11.66.

6.2 Upon the construction of the Additional Works, the phase of Conservation thereof

shall start, up to the termination of the Concession. 6.3 Since these are works of different nature, characteristics and service life, the

assessment of their Conservation management shall be made only by the process of Continuous assessments. To this end, the REGULATOR, together with the opinion of the GRANTOR shall determine the Service Levels or indicators for good state of conservation. The CONCESSIONAIRE shall determine the extent of Conservation works required in each period.

6.4 According to the provisions of the preceding paragraph, the CONCESSIONAIRE

shall be responsible for scheduling and executing the Conservation of the Additional Works.

6.5 As a general rule, the Conservation of the Additional Works will seek to maintain,

at all times, its functionality and integrity, or the original purpose for which they were executed.

6.6 Policies or practices of Conservation of the Additional Works that produce defects

that compromise their functionality, integrity, durability, usefulness or aesthetic, or affecting such characteristics of the Road or property of others shall not be acceptable.

6.7 The REGULATOR, or its designee, shall conduct the assessments of the

Additional Works it deems appropriate, and in the case of finding defects, shall notify the CONCESSIONAIRE of the need for the Conservation of the elements selected and within the deadlines established in the communication.

6.8 If necessary, the criterion of exceptional or special situation in Section 4, paragraph

10 of this ANNEX will be used to develop criteria to be applied to the assessment of Conservation of Additional Works.


6.9 In the event of default of the CONCESSIONAIRE to proceed in time and form

according to the communications of the REGULATOR regarding the correction of defects of the Conservation of the Additional Works, a penalty according to the provisions in Table Nº 4 of ANNEX IX of the Concession Contract shall be applied.


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SECTION 3

EXPLOITATION

7. ASSESSMENT OF THE EXPLOITATION MANAGEMENT OF THE CONCESSIONAIRE

Conditions Parameter to be Used

7.1 Congestion in toll units and weighing stations will be measured by the “queuing

time” (TEC), which means in the field as the average waiting time per vehicle, weighted by the number of vehicles serviced. The TEC shall always be measured separately for each direction of traffic.

7.2 As a method for measuring the “license plates method” is applicable where: (a) a

team records the number of the license plate of vehicles and the time they stop in queue; (b) the other team records the number of the license plate of vehicles and the time they leave after paying the toll; and (c) then the data is processed in cabinet.

7.3 The measurement time shall be at least three (3) hours, so as to cover the peak

hours of the month in which the measurement is made, in every direction and in every season. To determine this, the first measurement of TEC shall be made on the basis of traffic information of the MTC. After the first Concession Year, the source of information for TEC measurements shall be made on the basis of traffic information collected by the CONCESSIONAIRE. For the purposes of determining TEC it shall be taken into account that both Toll Units and Weighing Stations will operate 24 hours a day and toll will be paid by all vehicles. In terms of weighing, it shall be done in order to prevent deterioration of the road, and SUTRAN shall be entitled to fine excess in authorized weights and/or when the unloading of excess weight, or re-stowage is made /by the carrier). This will be done for all freight cars and passenger buses which have shown eventual overload on the weighing system in motion to install.

Procedures

7.4 The CONCESSIONAIRE shall conduct its own measurements of congestion in

order to carry out the timely corrective operation measures required.

7.5 The CONCESSIONAIRE shall carry out at least an annual measure of TEC and shall report its findings to the REGULATOR before seven (7) Calendar Days of completion.

7.6 The REGULATOR, or its designee, shall evaluate at least annually the TEC in

every direction and in every season.

7.7 The TEC value shall also be calculated when the characteristics of the Toll Units and Weighing Stations are modified, or in the event that new ones are established in the Concession. Service Level and Response Time

7.8 The maximum acceptable TEC is three (3) minutes. 7.9 When any congestion measurement has determined a TEC above three (3)

minutes, a second measurement will be made no later than thirty (30) Days after


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the first one. The second measurement shall cover at least three (3) hours during the peak hours of the week when the measurement is made. If the second measurement also determines a TEC above three (3) minutes, the CONCESSIONAIRE shall modify the service system in such season, for which it will have a deadline of five (5) Days. Otherwise the first measurement shall be considered as corresponding to a particular phenomenon without the need for any intervention.

7.10 If the amendment of the service system involves the Construction or installation of

new lanes for the station, the CONCESSIONAIRE shall have a period of up to six (6) months to complete the specified works. This period starts from the moment a measurement above three (3) minutes was made.

7.11 If, at any time, an isolated congestion measurement of a TEC above five (5)

minutes is recorded, a penalty shall be applied according to Table Nº 5 of ANNEX IX of the Contract.

7.12 Notwithstanding the foregoing, the REGULATOR may carry out any additional

measures required in order to determine the causes of the increase of the TEC. If they conclude that this increase is due to circumstances not attributable to the CONCESSIONAIRE, it shall not be required to modify the Service System, or execute the Construction of new lanes, and thus shall not be liable to the application of penalties.


7.13 Failing to comply with the modification of the Service System or Construction or

installation of new lanes within the deadlines indicated, shall result in the application of a penalty according to Table Nº 5 of ANNEX IX of the Contract.

8. GENERAL CONDITIONS FOR ROUTINE, PERIODIC ROAD CONSERVATION

AND ROAD EMERGENCY

Routine Road Conservation 8.1 The CONCESSIONAIRE shall carry out permanently and from the Takeover until

the Termination of the Concession, the following Routine Conservation activities along the whole road:

a) Cleaning and repair of driveways and berms respecting the Concession

Area. b) Cleaning of ditches. c) Cleaning and Maintenance of sewers. d) Conservation of bridges and works of art by following the applicable

procedures and standards in force. e) Cleaning, replacement, Conservation, location and relocation of the

appropriate horizontal and vertical signaling, in accordance with the applicable regulations.

f) Cleaning, replacement and Conservation of guardrails, ensuring that they meet the technical requirements of the current regulations to allow them to meet their objectives (height, required location, Conservation of the center of gravity, etc.).

g) Painting and repainting of pavement markings and signs to provide the necessary road safety according to the area (whether urban or not). This


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painting shall be done as many times as necessary in order to maintain the permissible limits specified in the Contract.

h) Repotting, arrangement and Conservation of green areas and other landscape, ornamental and environmental components of the Road.

i) Excess cutting of each of the construction stages shall be disposed in specially equipped dumps and indicated in the Environmental Management Instrument.

j) Reshaping, erosion control, leveling and cleaning of the side slopes both in cut and fill and their stabilization.

k) Control and management of sediments. l) Removal and clearing of the road from landslides of magnitude equal to

or lower than 200m3 per event. m) Repair, treatment of cracks, patching and sealing.

The purpose of these actions is to ensure the Service Levels required in this ANNEX, in order to provide an optimal service to the user. Periodic Road Conservation

8.2 The CONCESSIONAIRE shall perform, when required, the Periodic Road

Conservation along the entire road and which basically comprises, among others, the following tasks: a) Placement of reinforcing layers or relaying in asphalt pavements. b) Resetting affirmed elements and the reshaping of the existing platform on

unpaved roads. c) Coating of unpaved roads with bituminous treatment. d) Repair of different physical elements of the road. e) Socioenvironmental activities. f) Care and monitoring of the road.

The purpose of these conservation actions is to ensure the Service Levels required in this ANNEX, in order to provide an optimal service to the User.

8.3 Landslide

a) Sliding down of masses of earth and rock blocking the free transit of vehicles on the highway.

b) For purposes of this contract, Landslides with a magnitude equal to or lower

than 200m3 shall be dealt with by the CONCESSIONAIRE within the Routine Maintenance activities.

c) Landslides of magnitude greater than 200 m3 per event shall be covered as

indicated in Clause 7.7.

8.4 In addition, the CONCESSIONAIRE shall ensure that in the Subsection:

a) Advertising panels are placed only when the current regulations are complied with, and existing panels that do not meet these standards shall be removed. For this purpose, the CONCESSIONAIRE shall identify and notify the GRANTOR of the existence of these panels, so that the GRANTOR takes the necessary steps to remove such panels. When authorization for the installation of an advertising panel is requested, the CONCESSIONAIRE shall express its technical opinion on the


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characteristics and location of the panel, since it is responsible for the safety of road users.

b) No accumulation of clearing and waste is allowed within the Concession Area and that the appropriate cleaning is made.

c) No temporary constructions or installation of public services is made within the Concession Area, unless they have been authorized by the GRANTOR. If the execution of this type of constructions or facilities is verified, it shall exercise the corresponding possessory defense and communicate the fact to the GRANTOR for the appropriate purposes.

8.5 In the case of urban areas on which the road crosses, the provisions in the

paragraphs regarding Routine Conservation shall be taken into account as applicable. If it be the case, and alternatively, the CONCESSIONAIRE in coordination with local governments shall adopt other measures which to provide road safety to the area, preventing pedestrians or motor vehicles from crossing the road. In the latter case, the GRANTOR is obliged to intercede with local governments to achieve this goal.

The limitation of urban areas not comprised in the studies or files made by the CONCESSIONAIRE, shall be determined with the delivery of the corresponding Subsection by the GRANTOR to the CONCESSIONAIRE.

8.6 The CONCESSIONAIRE shall carry out the Construction and/or installation of the necessary road safety elements, to ensure the service level of road safety assessment. This information shall be used to fill the form to calculate the service level of road safety assessment, referred to in Appendix 5 of ANNEX I of the Contract.


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SECTION 4

OTHER PROVISIONS 9. EMERGENCY AND ACCIDENT SERVICES

Emergency and Accident Service 9.1 As part of the Concession, a real-time communication system shall be

implemented based on telephone communication with a telephone exchange. The CONCESSIONAIRE is obliged to provide immediate service twenty-four (24) hours a day to any call received in such telephone exchange by the communication system.

9.2 Similarly, it is the obligation of the CONCESSIONAIRE to provide immediate

service twenty-four (24) hours a day to any calls entering its offices through the normal telephone system.

9.3 It is also the obligation of the CONCESSIONAIRE to respond in the first instance

to any emergency or accident directly reported in its offices. Where applicable, the response in the first instance shall consist of at least the following: (a) report to the police authorities of the area where the emergency or accident occurred; (b) dispatch of a minimum provision of assistance vehicles (ambulance or trailer); (c) dispatch of a representative of the CONCESSIONAIRE to be present on-site; and (d) inform the complainant of the actions taken by sending a copy to the REGULATOR, the probable time of emergency or accident response and the type of assistance to be provided by the CONCESSIONAIRE. These actions shall be initiated within five (5) minutes of receipt of the complaint.

9.4 In the event an emergency or accident occurs, the CONCESSIONAIRE is also

required to provide service in a second instance. Depending on the case, service in second instance shall consist of: (a) movement of people or vehicles involved in accidents within the limits of its liability under the Contract; (b) transport of staff and equipment necessary to meet the requirements of providing full and safe passage; (c) coordinate with the relevant authorities (Police, Fire Brigade, Civil Defense, Provías Nacional, Ministry of Environment - National System of Protected Natural Areas (SERNANP)) the support to be provided by their staff and equipment for the restoration of passage and the mitigation of the effects of an emergency or accident.

Deadlines for Emergency and Accident Service

9.5 In the case of movement of people and vehicles, the CONCESSIONAIRE shall

comply with its obligations under the Contract within sixty (60) minutes from the time the emergency or accident was reported.

9.6 In the case of the restoration of passage, as a general rule, the

CONCESSIONAIRE shall provide partial passage within a period of six (6) hours from the moment the incident was reported. Similarly, it will provide full passage within twenty-four (24) hours of the complaint of the emergency or accident. Noncompliance and Penalties

9.7 Provided there are no elements to release the CONCESSIONAIRE of its

responsibility to comply with the previous deadlines, its noncompliance may result


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in a penalty. Each breach will be penalized as established by the REGULATOR according to the regulations in force on the matter.

10. EXCEPTIONAL OR SPECIAL SITUATIONS

Conservation in unpaved parts

10.1 It is considered that the existence of unpaved parts (which are not part of the Concession) are temporary during the Operation of the Concession while the Rehabilitation and Improvement and/or Initial Periodic Maintenance referred to in ANNEX 9 of the Bidding Terms and Conditions are implemented.

10.2 In these situations, the CONCESSIONAIRE is required to conserve the Road

from the time of delivery by the GRANTOR in the following minimum service conditions:

- Passage: No road closures are allowed for more than 6 hours. - Average travel speed: for light vehicles the average speed (of lengths not

shorter than 5 km) shall not be less than 20 km/h and for heavy vehicles it shall not be less than 10 km/h.

Congestion in temporary subsections

10.3 The required interventions under the responsibility of the

CONCESSIONAIRE shall be carried out, if the Service Levels of mobility and accessibility are affected. In that sense it shall not be admitted that any Subsection (i.e. less than 5 km) has a lower service level according to the Road Capacity Manual.

Other Situations

10.4 In the case of situations not covered by this ANNEX I, the REGULATOR shall

set the Service Levels and the measurement methodology to be used in the assessment of the management of the CONCESSIONAIRE.

10.5 In the particular case of the assessment of the Obligatory Services to be

provided by the CONCESSIONAIRE which have not been specifically included in other procedures described in this ANNEX I, the procedure of Continuous assessment shall be adopted.


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Appendix 1

Subsections of the Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte

Sahuinto/Dv. Pisco – Huaytará - Ayacucho


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Subsections of the Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte Sahuinto/Dv. Pisco –

Huaytará - Ayacucho

SUBSECTION

DESCRIPTION ROUTE LENGTH

km START (SIG)

END (SIG)

1 Dv. Huancayo – Pte.

Chanchas PE-3S 3.834 126.528 130.362

2 Pte. Chanchas -

Huayucachi PE-3S 2.820 130.362 133.182

3 Huayucachi - Imperial PE-3S 26.567 133.182 159.749

4 Imperial - Izcuchaca PE-3S 31.219 159.749 190.968

5 Izcuchaca - Mayocc PE-3S 116.863 190.968 307.831

6 Mayocc - Huanta PE-3S 32.756 307.831 340.587

7 Huanta - Ayacucho (Emp PE-28A)

PE-3S 42.253 340.587 382.840

8 Ayacucho (Emp PE-28A) - Km. O+000 (Ayacucho)

PE-3S 7.628 382.840 390.468

9 Km. O+000 (Ayacucho) - Abra Tocto

PE-3S 50.000 390.468 440.468

10 Abra Tocto - Ocros PE-3S 48.800 440.468 489.268

11 Ocros - Chincheros PE-3S 55.200 489.268 544.468

12 Chincheros - Santa María de Chicmo

PE-3S 66.022 544.468 610.490

13 Santa María de Chicmo - Andahuaylas (Emp PE-30B)

PE-3S 20.340 610.490 630.830

14 Andahuaylas (Emp PE-30B) - Dv. Kishuara (Emp PE-3SE)

PE-3S 54.307 630.830 685.137

15 Dv. Kishuara (Emp PE-3SE) - Dv. Sahuinto (Emp PE-3S)

PE-3S 62.711 0.000 62.711

16 Dv. Sahuinto (Emp PE-3S) - Puente Sahuinto

PE-3S 13.739 737.699 751.438

17 San Clemente (Emp. PE-1S) - Puente Choclococha

PE-28A 163.810 0.000 163.810

18 Puente Choclococha - Ayacucho (Emp. PE-28A)

PE-28A 172.066 163.810 335.876

Total 970.935


136

Appendix 2

Condition Parameters and Service Levels required for the management

control of the CONCESSIONAIRE of the Longitudinal de la Sierra Highway Section 4

(Individual Service Levels and response times)


137

Service Levels for: Rolling surface

Parameter Measure Initial Periodic Maintenance


Reception Conservation Reception Conservation

Width of the rolling surface

Maximum percentage of width reduction

The existing wide will be accepted.

Remains Geometric design manual

0%

Reduction of the structural package

Maximum percentage of reduction of the thickness of each layer

Not considered

Not considered 0% 0%

Holes Maximum percentage of area with holes

0% 0% 0% 0%

Cracks

Maximum percentage of area with cracks larger than 5 mm

0% 0% 0% 0%

Maximum percentage of area with cracks between 2.5 and 5 mm

0% 5% 0% 5%

Patches

Maximum percentage of patches in poor condition (medium or high levels of severity)

0% 0% 0% 0%

Rutting Maximum percentage of area with rutting higher than 12 mm

0% 0% 0% 0%

Subsidence Maximum percentage of area with subsidence greater than 25 mm

0% 0% 0% 0%

Exudation

Maximum percentage of area with exudation (combined both levels of severity, medium and high)

0% 0% 0% 0%

Existence of loose material

Maximum percentage of area with loose material

0% 0% 0% 0%

Existence of obstacles

Maximum number of obstacles

0% 0% 0% 0%

Peelings Maximum percentage of area with peelings

1% 1% 0% 0%

Detachment of edges

Maximum percentage with detachment of edges

0% 0% 0% 0%

Longitudinal cracks in the middle of the driveway and on the edges

Maximum percentage of longitudinal cracks

0% 0% 0% 0%

Roughness

Maximum moving average roughness with a 100-m interval, reconciled with the IRI survey standard

2.5 IRI 3.5 IRI 2.00 IRI 3.5 IRI


138

Response Deadlines for Noncompliance in: Rolling surface

Parameter Maximum correction deadline

(days)

Reduction of the width of the rolling surface 14

Reduction of the structural package 14

Holes 2

Cracks 7

Patches 2

Rutting 14

Subsidence 7

Exudation 7

Existence of loose material 1

Existence of obstacles 1

Roughness for reception of works 30

Roughness during the conservation period 30

Peelings 7

Longitudinal cracks 7

Detachment of edges 7

Service Levels for: Berm

Parameters Measure

Initial Periodic Maintenance



Width of berm Maximum percentage of width reduction

The existing wide will be accepted.

Remains 0% 10%


0% 0% 0% 0%

Cracks


0% 0% 0% 0%

Maximum percentage of area with cracks between 2 and 5 mm

0% 5% 0% 5%

Patches

Maximum percentage of patches in poor condition (medium or high levels of severity)

0% 0% 0% 0%

Subsidence Maximum percentage of area

5% 5% 0% 2%


139

Service Levels for: Berm

Parameters Measure




with subsidence greater than 50 mm

Exudation

Maximum percentage of area with exudation (combined both levels of severity, medium and high)

2% 2% 0% 0%



10% 10% 0% 5%



0% 0% 0% 0%

Gap between the driveway and the berm

Maximum height (driveway - berm) of the gap

20 mm 20 mm 0 mm 15 mm

Maximum percentage of the length with gap higher than 0 mm and lower than 15 mm

10% 10% 0% 10%

Detachment of berm edges

Maximum percentage of detachment

5% 5% 0% 0%

Response Deadlines for Noncompliance in: Berm


(days)


Holes 2

Patches in poor condition 7

Crocodile crack 7

Subsidence 7

Exudation of medium and high level 7



Gap between the driveway and the berm 7

Detachment of berm edges 7


140

Service Levels for: Speed bumps (Concrete)

Parameters Measure




Reduction of the width of the rolling surface


0% 0% 0% 0%

Cracks

Maximum percentage of area with cracks having openings larger than 5 mm

0% 0% 0% 0%

Maximum percentage of area with cracks having openings between 2 and 5 mm

0% 10% 0% 10%



0% 0% 0% 0%

Gaps between joints

Maximum gap height 10 mm 10 mm 0 mm 10 mm

Response Deadlines for Noncompliance in:

Speed bumps (Concrete)


(days)


Cracks 7


Gaps between joints 14


141

Service Levels for: Walls (Concrete)

Parameters Measure




Cracks Maximum percentage of area with cracks having openings larger than 5 mm

0% 0% 0% 0%

Cracks Existence of obstacles


0% 0% 0% 0%


0% 0% 0% 0%

Gaps between joints

Maximum gap height 10 mm 10 mm 0 mm 10 mm

Excess of wear in lines or marks

Maximum percentage deterioration

20% 20% 20% 20%

Cleaning of drains

Presence of vegetation 0% 0% 0% 0%

Response Deadlines for Noncompliance in: Walls (Concrete)


(days)

Cracks 7


Gaps between joints 14

Excess of wear in lines or marks 14

Cleaning of drains 14


142

Service Levels for: Drainage (Sewers, Ditches, Crown Ditches, Drains, Heads and Spillways)

Parameters Measure




Obstructions to the free runoff of the design hydraulic flow in sewers, ditches, crown ditches, pontoon bridges, drains heads and spillways

Vegetation, sedimentation, clogging and other elements that block or alter the free runoff of the design flow.

0% 0% 0% 0%

Structural failures

Undercuts, settlements, loss of geometry, failures that affect the structural or hydraulic capacity

0% 0% 0% 0%

Response Deadlines for Noncompliance in: Drainage (Sewers, Ditches, Crown Ditches and Drains)


(days)

Obstructions to the free hydraulic runoff 3

Structural failures 14


143

Service Levels for: Horizontal Signaling

Parameters Measure Initial Periodic Maintenance



Incorrect geometry of the lines

Minimum Line Width

In demarcation of axis line and border line 10 cm (*)




In demarcation of border lines with bump or indications for speed reduction 15 cm




Length of the dotted axis lines

4.5 m +/- 2% 4.5 m +/- 2% 4.5 m +/- 2% 4.5 m +/- 2%

Length of the spaces between the dotted axis lines

7.5 m +/- 2% 7.5 m +/- 2% 7.5 m +/- 2% 7.5 m +/- 2%

Maximum deflection of the axis line alignment with respect to the path axis

Me. Emáx = 10 cm

Me. Emáx = 10 cm

Me. Emáx = 10 cm

Me. Emáx = 10 cm

Maximum deflection of the axis dotted lines (white) with respect to the line that joins its ends

Me. Emáx = 2 cm

Me. Emáx = 2 cm

Me. Emáx = 2 cm

Me. Emáx = 2 cm

Maximum and minimum deflection of the continuous axis line (yellow) with respect to the dotted axis lines (white)

17 cm < MaMe < 20 cm




Maximum and minimum deflection of the continuous axis line (yellow) with respect to the path axis





Discoloration or dirt in lines or marks

Chromaticity coordinates "x" and "y" (45/0 geometry and angle of view pattern of 2°)

Chromaticity coordinates within the CIE diagram defined by the 4 points contained in the table




Poor night-time visibility of lines or marks

Minimum Reflectivity Coefficient

Yellow 150 mcd/lux/m2





144

Service Levels for: Horizontal Signaling




Angle of view of 1.05° and incidence of -86.5° (at 15m from observation)

White 200 mcd/lux/m2














Maximum percentage deterioration

20% 20% 20% 20%

Incorrect geometry of reflective studs

Distance between studs on the axis (tangent)

24 m 24 m 24 m 24 m

Distance between studs on the axis (in curves)

As established in the standard




Damage to the reflective studs

Displacement from its original position

3 mm 3 mm Not Admitted Not Admitted

Total or partial damage to the reflective area or the body

Not Admitted Not Admitted Not Admitted Not Admitted

Loss or uselessness of the reflective studs

Maximum percentage of lost or useless reflective studs

Not Admitted 20% Not Admitted 20%

(*) Manual of Vehicle Traffic Control Devices for streets

and roads


145

Service Levels for: Vertical Signaling




Missing elements

Individual missing elements


Discoloration of the signal plates


Chromaticity coordinates within the CIE diagram defined by the 4 points contained in the corresponding table (*)




Poor night-time visibility of the signal plates

Minimum Reflectivity Coefficient (angle of view of 0.2° and incidence of - 4°)

Yellow: 100 Cd/lux/m2




White: 140 Cd/lux/m2




Red: 30 Cd/lux/m2

Red: 30 Cd/lux/m2

Red: 30 Cd/lux/m2

Red: 30 Cd/lux/m2

Green: 30 Cd/lux/m2

Green: 30 Cd/lux/m2

Green: 30 Cd/lux/m2

Green: 30 Cd/lux/m2

Blue: 10 Cd/lux/m2

Blue: 10 Cd/lux/m2

Blue: 10 Cd/lux/m2

Blue: 10 Cd/lux/m2

Orange: 60 Cd/lux/m2




Damage to the message of the signal plates

Messages dirty with dust or damaged with stickers or paint, etc.


Perforations of maximum 1 cm in diameter that do not affect the message


Any fold with a length shorter than 7.5 cm.


Oxidation on the plate faces


Damage to the fixing elements of the signal plates

Loose or incorrectly adjusted panels


Total or partial lack of bolts


Deterioration or absence of stabilizing structures


Damage to the signal supports

Cracks, fractures or visible frames in case of concrete supports; Oxidation or deformation in the



146

Service Levels for: Vertical Signaling




case of metallic supports

Deficiencies in painting


Surrounding vegetation that prevents visibility


Damage to kilometer posts

Cracks, fractures or visible frames (in case of concrete posts)






Service Levels for: Guidance and Defense Elements




Missing elements Any individual missing element

Not Admitted

Not Admitted Not Admitted Not Admitted

Deficiency in the placement of metal defenses

Location, alignment and height

Shall respond to the provisions of EG-2000-MTC (**)




Deterioration and cleaning of metal defenses

Folds of damage Not Admitted


Absence or misalignment of fixing bolts

Not Admitted


Oxidation of side surfaces

Not Admitted


Dirt, paint or posters Not Admitted


Absence of reflective paint or sheet in the “L” washers with a coefficient of reflectivity of 40 cd/lux/m2 within a minimum area of 60 cm2

Not Admitted



147

Service Levels for: Guidance and Defense Elements




Deficiency in the placement of railing parapets

Location, alignment and height





Deterioration and cleaning of railing parapets

Cracks, fractures or visible frames

Not Admitted



Not Admitted


Absence of reflective paint or sheet with a coefficient of reflectivity of 40 cd/lux/m2 within a minimum area of 50 cm2, every 2 m

Not Admitted



Not Admitted


Deficiency in the placement of curve delineators

Location, alignment, separation and height

Shall respond to the provisions of the approved Manual (*)




Deterioration and cleaning of curve delineators

Cracks, fractures or visible frames (in the case of concrete delineators)

Not Admitted



Not Admitted


Absence of reflective paint or sheet on both sides with a coefficient of reflectivity of 40 cd/lux/m2 within a minimum area of 70 cm2

Not Admitted



Not Admitted


(*) Manual of Vehicle Traffic Control Devices for Streets and Roads (**) General Technical Specifications for Road Construction


148

Response Deadlines for Noncompliance in: Road Safety


(days)

Horizontal Signaling

Incorrect geometry of the lines 7

Discoloration or dirt in lines or marks 7

Poor night-time visibility of lines or marks 7

Poor day-time visibility of lines or marks 7

Excess of wear in lines or marks 7 Incorrect geometry of reflective studs 7

Damage to the reflective studs 7

Loss or uselessness of the reflective studs 7

Vertical and Overhead Signaling

Missing elements 3

Discoloration of the signal plates 7

Poor night-time visibility of the signal plates 7

Damage to the message of the signal plates 7

Damage to the fixing elements of the signal plates 7

Damage to the signal supports 7

Damage to kilometer posts 7

Guidance and Defense Elements

Missing elements 3

Deficiency in the placement of metal defenses 7

Deterioration and cleaning of metal defenses 7

Deficiency in the placement of railing parapets 7

Deterioration and cleaning of railing parapets 7

Deficiency in the placement of curve delineators 7

Deterioration and cleaning of curve delineators 7


149

Service Levels for: Right of Way and/or Concession Area




Excess of vegetation height (*)

Maximum vegetation height

In Berms and Ditches no admitted, up to 15 cm in the road safety area and up to 50 cm in areas of visibility




Obstacles Obstacles in the first 6 m measured from the Edge of the berm

Not admitted within the road safety area




Erosion and sediments

Erosions on slopes, foreslopes and in the right of way and/or concession area in general

Not admitted within the integral strip




Standing water (*) Standing water in the right of way


Clearing and Scaling of Slopes

Removal of Blocks and Unloading of unstable sectors


Waste

Waste of any nature or elements alien to the path (dead animals, accident debris, abandoned cars and loads, branches and leaves, debris or remains of construction or materials used in maintenance)


Advertising

Unauthorized notices or advertising in any element of the Right of Way and/or Concession Area


(*) This defect is not considered in sections located in the jungle.


150

Response Deadlines for Noncompliance in: Right of Way and/or Concession Area


(days)

Excess of vegetation height (*) 7

Obstacles 7

Erosion 7

Standing water 7

Clearing and Scaling of Slopes 7

Waste 7

Advertising 7

Service Levels for: Bridges




Dirt or foreign elements

According to the manual for the survey of defects indicated in Appendix Nº 07

None of the defects is admitted




Damage to overlay None of the defects is admitted




Deficiencies in extreme or intermediate joints





Damage to concrete elements





Damage to support systems





Damage to metal elements





Damage to seismic systems





Damage to suspension systems





Damage to masonry elements





Obstructions to the free hydraulic runoff






151

Service Levels for: Bridges




Undermining of foundations





Damage to access embankment and coating





Damage to rockfill or protection gabions





Damage to railings and parapets





Damage to sidewalks





Damage to the coating of the metal structure






Bridges


(days)

Dirt or foreign elements 7

Damage to overlay 7

Deficiencies in extreme or intermediate joints 7

Damage to concrete elements 7

Damage to support systems 10

Damage to metal elements 7

Damage to seismic systems 10

Damage to suspension systems 10

Damage to masonry elements 10

Obstructions to the free hydraulic runoff 7

Undermining of foundations 7

Damage to access embankment and coatings 7

Damage to rockfill or protection gabions 7

Damage to railings and parapets 7

Damage to sidewalks 7


152

Service Levels for: Rolling surface

Parameter Measure Service Level

Surface friction Coefficient of friction Not lower than 0.40


Rolling surface

Parameter Maximum correction deadline (days)

Surface friction 30

Service Levels for

Tunnels

Parameter Measure Service Level

SERVICE LEVELS FOR DRIVEWAY AND BERMS IN TUNNELS

Reduction of the width of the rolling surface Maximum percentage of width reduction 0.00%

Reduction of the structural package existing at the takeover of the contract


0.00%

Holes Maximum percentage of area with holes 0.00%

Cracks

Maximum percentage of area with cracks with high level of severity

0.00%

Maximum percentage of area with cracks with medium level of severity not sealed

1.00%

Patches Maximum percentage of patches in poor condition (medium or high levels of severity)

0.00%

Rutting Maximum percentage of area with rutting higher than 12 mm.

0.00%

Subsidence Maximum percentage of area with subsidence greater than 25 mm.

0.00%

Exudation Maximum percentage of area with exudation (combined both levels of severity, medium and high)

0.00%

0.00%

Existence of loose material Maximum percentage of area with loose material

0.00%

Existence of obstacles Maximum number of obstacles 0.00%

Roughness for reception of Works Maximum sliding average roughness with an interval of 1 km (asphalt concrete)

2.0 IRI

Roughness during the conservation period Maximum sliding average roughness with an interval of 1 km (asphalt concrete)

3.5 IRI

Gap between the driveway and the berm Maximum height (driveway - berm) of the gap

0.00 mm


153

SERVICE LEVELS FOR: TUNNEL COATING AND DRAINAGE

Cracks in concrete Maximum percentage of area with cracks 0.00%


0.00%

Drainage Maximum blocked percentage 0.00%


Loose material or risk elements for circulation on the board

0.00%

Obstruction in drains 0.00%

Stains or damage to concrete 0.00%

Foreign matter in joints 0.00%

Bird nests or insect colonies 0.00%

Vegetation in cracks 0.00%

Damage to overlay

Reduction of overlay thickness above 10% 0.00%

Holes of any size or nature 0.00%

Unsealed cracks (other than cracks by setting refraction)

0.00%

Patches in poor condition 0.00%

Rutting greater than 12 mm. 0.00%

Subsidence greater than 12 mm. 0.00%

Exudations (medium and/or high level) 0.00%


Separation greater than indicated in the design parameters

0.00%

Non-tight or unsealed joints 0.00%

Different altimetry above 0.5 cm between the edges or between the edges and the filler

0.00%

Breakage or chipping at the edges 0.00%


Flaking or detachment 0.00%

Exposed frames or surface rust or cracks along the location of the frame

0.00%

Surface lesions greater than 0.5 cm deep. 0.00%

Cracks thicker than 0.3 mm, unsealed 0.00%


Fissures or cracks 0.00%

Corrosion 0.00%

Cracks or deformations 0.00%

Loss of connecting elements 0.00%

Damage to welds 0.00%

Flaking, bubbles or cracks in the protection paint

0.00%

Damage to protection galvanization 0.00%


Broken, missing, loose or misaligned elements

0.00%

Paint impairment 0.00%

Damage to sidewalks

Gaps 0.00%

Dirt 0.00%

Loose, missing or broken tiles 0.00%

Stains or damage by passage of water in joints of curbs and sidewalks

0.00%


154

RESPONSE DEADLINES FOR NONCOMPLIANCE IN DRIVEWAY AND BERMS IN TUNNELS

Parameter Maximum correction

deadline (days)


15


15

Holes 3

Cracks 7

Patches 3

Rutting 30

Subsidence 7

Exudation 14



Roughness for reception of Works 30

Roughness during the conservation period 30

Gap between the driveway and the berm 7

RESPONSE DEADLINES FOR NONCOMPLIANCE IN: TUNNEL COATING AND DRAINAGE

Cracks in concrete 7


Drainage 1

Dirt or elements 7

Damage to overlay 7

Deficiencies in extreme or intermediate joints 7

Damage to concrete elements 7

Damage to metal elements 7

Damage to railings and parapets 7

Damage to sidewalks 7


155

Service Levels for: Tunnels

Horizontal Signaling

PARAMETER MEASURE SERVICE LEVEL


Minimum line width

In demarcation of axis lines and border line: 10 cm. (*)

In demarcation of lines with bump or indicators for speed reduction: 15 cm.

Length of the dotted axis lines 4.5 m +/- 2%


7.5 m +/- 2%


Me Emax = 10 cm.


Me Emax = 2 cm.






Chromaticity coordinates “X” and “Y” (45/0 geometry and angle of view pattern of 2” )



Minimum Reflectivity Coefficient:

Angle of view of 1.5° and incidence of - 86.5°

Yellow 150 mcd / lux / m2

White 200 mcd / lux / m2

Angle of view of 1.5° and incidence of - 88.76°

Yellow 80 mcd / lux / m2

White 100 mcd / lux / m2


Maximum percentage deterioration 20%


Distance between studs on the axis (tangent)

24 m.

In curves As established in the standard


Displacement from its original position Not admitted

Total or partial damage to the reflective area or the body.

Not admitted



During the first 3 years following each of the interventions: 10%

During the rest of each period between Works 20%

(*) Manual of Vehicle Traffic Control Devices for Streets and Roads


156

Service Levels for: Tunnels

Vertical Signaling


Missing elements Individual missing elements Not admitted


Chromaticity coordinates “X” and “Y” (45/0 geometry and angle of view pattern of 2” )



Minimum Reflectivity Coefficient (angle of view of 02° and incidence of - 4°)

Yellow 100 cd / lux / m2

White 140 cd / lux / m2

Orange 60 cd / lux / m2

Red 30 cd / lux / m2

Green 30 cd / lux / m3

Blue 10 cd / lux / m4



Not admitted


Not admitted


Not admitted

Oxidation on the plate faces Not admitted


Loose or incorrectly adjusted panels Not admitted

Total or partial lack of bolts Not admitted


Not admitted


Cracks, fractures or visible frames in case of concrete supports; Oxidation or deformation in the case of metallic supports

Not admitted

Deficiencies in painting Not admitted


Not admitted



Not admitted



Not admitted



157

RESPONSE DEADLINES FOR NONCOMPLIANCE WITH ROAD SAFETY

PARAMETER MAXIMUM CORRECTION DEADLINE (days)

HORIZONTAL SIGNALING

Incorrect geometry of the lines 7

Discoloration or dirt in lines or marks 7

Poor night-time visibility of lines or marks 7

Poor day-time visibility of lines or marks 7

Excess of wear in lines or marks 7

Incorrect geometry of reflective studs 7

Damage to the reflective studs 7

Loss or uselessness of the reflective studs 7

VERTICAL SIGNALING AND AREA

Missing elements 3

Discoloration of the signal plates 7

Poor night-time visibility of the signal plates 7

Damage to the message of the signal plates 7

Damage to the fixing elements of the signal plates 7

Damage to the signal supports 7

Damage to kilometer posts 7


158

Appendix 3

Communication Formats


159

Detection of poor condition parameter (Note from the Supervisor Engineer to the OSITRAN Coordinator)

Place Date PCI Detection Nº Mr. Coordinator: According to the provisions of ANNEX I of the Concession Contract, we hereby inform that the following defects have been found in the Concession of the Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte Sahuinto/Dv. Pisco – Huaytará - Ayacucho. Route: Subsection:

Item Defect not admitted From Km

To Km Total Km. Term (days)

Sincerely,

SIGNATURE Supervisor Engineer


160

Notice of detection of poor condition parameter (Note from OSITRAN to the CONCESSIONAIRE)

Place Date PC Notice Nº Ref: PCI Detection Nº Messrs., (name of the CONCESSIONAIRE): According to the provisions of ANNEX I of the Concession Contract, we hereby inform that the repairs of the defects indicated in the table below shall be carried out. Route: Subsection:


To Km Total Km. Term (days)

Sincerely,

SIGNATURE OSITRAN Representative


161

Notice of resolution of poor condition parameter (Note by the CONCESSIONAIRE)

Place Date PCI Notice Nº Messrs. OSITRAN: According to the instructions of the Notice of detection of poor condition parameter Nº _____________ we hereby inform that all tasks necessary to remedy the defects have been carried out as detailed below: Route: Subsection:


To Km Total Km.

Sincerely,

Signature CONCESSIONAIRE Representative


162

Detection of noncompliance (Note from the Supervisor Engineer to the OSITRAN Coordinator)

Place Date INS Detection Nº: Mr. Coordinator: According to the provisions of ANNEX I of the Concession Contract, we hereby inform that the execution deadlines for correcting the defects established in the Notice of poor condition parameter Nº ____________ have not been complied with, and a penalty for noncompliance shall be applied from said date and until the defects for the following cases are remedied. Route: Subsection:


To Km Total Km. New term

(days)

Furthermore, according to the provisions of ANNEX I of the Contract, we hereby inform that the execution deadlines for correcting the defects established in the Notice of poor condition parameter Nº ____________have been complied with, and therefore a penalty for noncompliance is not applicable for the following cases: Route: Subsection:



(days)

The reasons why a penalty is not applicable in each of these cases are as the following: (specify)



163

Notice of noncompliance (Note from OSITRAN to the CONCESSIONAIRE)

Place Date Notice of Noncompliance Nº: Messrs., (name of the CONCESSIONAIRE): According to the provisions of ANNEX I of the Concession Contract, we hereby inform that the execution deadlines for correcting the defects established in the Notice of poor condition parameter Nº ____________ have not been complied with, and a penalty for noncompliance shall be applied from said date and until the defects for the following cases are remedied. Route: Subsection:



(days)

Furthermore, according to the provisions of ANNEX I of the Concession Contract, we hereby inform that the execution deadlines for correcting the defects established in the Notice of Noncompliance Nº ____________have been complied with, and therefore a penalty for noncompliance is not applicable for the following cases: Route: Subsection:



(days)

The reasons why a penalty is not applicable in each of these cases are as the following: (specify)


OSITRAN Representative (name)


164

Appendix 4

Formats for the Calculation of the Service Level


165


166


167


168


169


170


171

Appendix 5

Format for the Calculation of the Global Service Levels (Individual Subsections and the entire Concession)


172

FORMAT FOR THE CALCULATION OF THE GLOBAL SERVICE LEVEL BY SUBSECTION AND GLOBAL SERVICE LEVEL OF THE CONCESSION

Legend S: Rolling surface B: Berms D: Drains, bridges and viaducts AC: Concession Area SV: Road Safety

Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte Sahuinto/Dv. Pisco – Huaytará - Ayacucho

Hectometers failed in the sample Weight by type %

Subsection

Route From To Start End Length

Km.

Sample

Total Hm with failures

Percentage 100 40 80 40

80

S B D AC

SV S B D AC

SV S B D AC

SV

1

2

3

4

5

6


173

Appendix 6

Global Service Levels Required (by Individual Subsections and the entire Concession)


174

Global Service Levels required in the Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte Sahuinto/Dv.

Pisco – Huaytará - Ayacucho

Subsection Route Town Minimum global service values by Subsection at the end of each year (%)

From To 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

1 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 2 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 3 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

4 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

5 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

6 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

7 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

8 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

9 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

10 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

11 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

12 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

13 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

14 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

15 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

16 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

17 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

18 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95 95

Concession Contract of the Longitudinal de la Sierra Highway – Section 4

175

Appendix 7

Manual for Service Level Survey


176

MANUAL FOR SERVICE LEVEL SURVEY

CONTENTS

A. INTRODUCTION

B. ASSESSMENT OF INDIVIDUAL SERVICE LEVELS

a. Determination of Service Levels in rolling surface and berms.

b. Determination of Service Levels in drains.

c. Determination of Service Levels in bridges and viaducts.

C. ROUGHNESS MEASUREMENT

D. PARAMETERS OF STRUCTURAL CONDITION BY DEFLECTOMETRY


177

A. INTRODUCTION

This “Manual for Service Level Survey” illustrates and complements some of the criteria and procedures proposed in the “Procedures for the Exploitation and Control of the CONCESSIONAIRE’s Management of the Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte Sahuinto/Dv. Pisco – Huaytará – Ayacucho”.

The purpose of this document, in addition to establish supplementary contract terms, is to provide field guidelines to assist personnel responsible for Conservation supervision in fulfilling their tasks. This document only summarizes the control criteria and procedures that require more accurate definitions to measure or determine Service Levels. Graphic examples are provided to represent the seriousness or magnitude of a defect.

The Manual includes clarifications for supervision of the compliance of Individual Service Levels related to rolling surface, Berms and Drains. Conducted on these terms, the supervision activities shall allow to identify appropriately and report localized defects on a single conceptual base, to take appropriate actions according to the mechanisms established in the Contract, and require their correction.

With regard to Road Safety, Public Strip and Bridges and Viaducts, the required Service Levels are mostly cases or situations to be avoided, which are noticed by direct observation. The current Manual does not include any graphical information to exemplify situations to be avoided, on the understanding that the condition parameters selected are usually identifiable within the normal engineering practice.

This Manual also includes references to the procedures to measure roughness, a parameter that, due to its meaning and direct relationship with service quality, deserves special consideration. It is recalled that the methodology chosen is established to measure roughness at least once a year

B. ASSESSMENT OF INDIVIDUAL SERVICE LEVELS

In order to supervise the compliance with the Service Levels established in the “Procedures for the Exploitation and for the Control of the CONCESSIONAIRE's Management of the Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte Sahuinto/Dv. Pisco – Huaytará - Ayacucho, permanent assessments will be conducted at the times and locations that the REGULATOR may deem convenient, without the need of prior notice to the CONCESSIONAIRE. In order to measure or determine the Service Levels reached by the CONCESSIONAIRE through its Conservation management policy, the REGULATOR will use the guidelines included in this Manual.

The individual Service Levels considered for the selected methodology are related to the following components:

Rolling surface

Berms

Drains

Road Safety (vertical and overhead signaling, horizontal signaling and retaining and defense elements)

Public strip

Bridges, works of art and Viaducts


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This Manual includes only supplementary guidelines to determine the Service Levels reached by the CONCESSIONAIRE for rolling surface, berms and draining.

Regarding the components of road safety, public strip and bridges and viaducts, field assessments shall be resolved based on the provisions of the “Procedures for the Exploitation and Control of the CONCESSIONAIRE's Management of the Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte Sahuinto/Dv. Pisco – Huaytará – Ayacucho”, by direct observation of the defects found.

a) Determination of defects in rolling surface and berms.

The following tables provide definitions, procedures and methodologies to measure individual Service Levels for rolling surface and berms.


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180


181


182


183


184


185


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Existence of loose material: Loose material” comprises aggregates, residual materials of tasks or executed works, eroded or settled materials deposited on the road. Existence of obstacles: Obstacle is any element that threatens the security of movement of vehicles. b) Determination of defects in drains. The following figures indicate the cases to avoid regarding conservation of drain structures.

SEWERS

PARAMETER SITUATION TO AVOID EXAMPLES

Obstructions to Free Runoff

Vegetation

Clogging

Structural Failures

Undermining

Settlements


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c) Determination of defects in bridges and viaducts.

The following table indicates the cases to avoid regarding Conservation of bridges and viaducts.

PARAMETER SITUATION TO AVOID OR DEFECT



Obstruction in drains

Stains or damage to concrete at the drain outlet

Foreign matter in joints

Bird nests or insect colonies

Vegetation in cracks

Damage to overlay (the measure to be chosen shall be the

one corresponding to the concrete overlay or asphalt concrete)

Reduction of overlay thickness above 10%

Holes of any size or nature


Patches in poor condition

Rutting greater than 12 mm.

Subsidence greater than 12 mm.

Exudations (medium and/or high level)



Non-tight or unsealed joints


Breakage or chipping at the edges


Flaking or detachment


Surface lesions greater than 0.5 cm deep.

Cracks thicker than 0.3 mm, unsealed

Damage to support systems

Dirt

Signs of corrosion or oxidation

Signs of crushing

Deterioration or displacement

Obstacles to the free movement of the structure within the design parameters


Fissures or cracks

Corrosion

Cracks or deformations

Loss of connecting elements

Damage to welds

Flaking, bubbles or cracks in the protection paint

Damage to protection galvanization

Damage to seismic systems Missing elements

Loss of functionality of any component

Damage to suspension systems

Main cables or hangers with broken wires, protuberances or oxidations

Braces, clamps or bolts in poor condition

Supports of main cables in towers with dirt or rust

Anchorage chambers for main cables with moisture, dirt or rust

Damage to masonry elements

Unsealed cracks

Displacements, warps, misalignment

Damage to mortar or building blocks


That may affect the structure stability

That block the prompt water inflow and outflow in a length upstream and downstream not shorter than the length of the bridge

Undermining of foundations Bed levels below the upper face of pile blocks or heads, unless planned or authorized in this way by the Supervision.


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PARAMETER SITUATION TO AVOID OR DEFECT


Cracking, subsidence or missing elements

Undermining in the coating foundation beams


Undercuts

Settlements that compromise the purpose of the protection

Missing elements

Damage to railings and parapets Broken, missing, loose or misaligned elements

Paint impairment

Damage to sidewalks

Gaps

Dirt

Loose, missing or broken tiles


C. ROUGHNESS MEASUREMENT

In November of each Concession Year and whenever it is considered that there have been substantial changes in the roughness, the CONCESSIONAIRE shall make an assessment of the road roughness.

According to ASTM, roughness is "deviations from the road surface with respect to a flat surface that affect the vehicle dynamics, the quality of circulation, dynamic loads and drains" (ASTM Specification E 867 - 82 A).

The International Roughness Index (IRI) is the standard scale in which roughness of pavements shall be measured.

The CONCESSIONAIRE and the REGULATOR may measure roughness using measurement equipment and methods compatible with the measurement methods class1 or 2 established in the World Bank Technical Paper Nº 46 or those set forth in Standard ASTM E950. Regardless of the equipment used by the CONCESSIONAIRE and the REGULATOR, such equipment shall be calibrated, always prior to use, in the same sector and the calibration of equipment and details thereof shall be available to the other party. For evaluation of the service level, the Maximum Sliding Average Roughness shall be used, with an interval of 1 km. The roughness of each of the Subsections of the Concession shall be measured at intervals not exceeding 100 meters. For each interval the average roughness value of the intervals located in a range of 1 km of the considered interval is calculated, and the resulting value is assigned to this interval. This value shall be called sliding average roughness in this interval. Repeating the above procedure for each one of the intervals of the Subsection, yields the sliding average roughness on all intervals of the Subsection.


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D. PARAMETERS OF STRUCTURAL CONDITION BY DEFLECTOMETRY

Service Level

1. The CONCESSIONAIRE shall carry out the structural control of the road, by Deflectometry, in a period not exceeding two (2) years and/or whenever substantial changes are noticed on the platform, according to the provisions of the General Specifications for Construction of Highways EG-2013, and the Manual for Highway Testing EM-2000 approved by Directorial Resolution Nº 028-2001-MTC/17, or otherwise the updated version.

2. The CONCESSIONAIRE shall make the deflection measurement in the following cases:

To perform the follow up of the evolution of the deflection with supervision purposes.

For the return of the highway at the end of the Concession Contract and/or in case the same is terminated.

In all cases when making an intervention, the CONCESSIONAIRE shall submit to the Supervision staff, the design parameters used (Equivalent axle number, design period, IMDA and growth rate used).

3. To determine the status of the structural condition of the pavement, the CONCESSIONAIRE shall obtain the allowable deflection according to the equivalent axles found based on transit updated in the year of commissioning of the road (Completion of the Works by the GRANTOR and/or the Rehabilitation and Improvement and Initial Periodic Maintenance of the CONCESSIONAIRE) and for the analysis period required for the design of interventions in the pavement.

4. The CONCESSIONAIRE shall make the follow up and control of the structural condition of the pavement based on the characteristic deflection and permissible deflection that will be determined as follows:

Characteristic Deflection

Dc= Dp+T*(standard dev.) Dc= Characteristic deflection Dp= Average deflection T = Coefficient that represents the percentage of the total area of probability of

presenting deflections higher than the characteristic deflection, T= 1.645.

Permissible Deflection

Da= (1.15/N18)1/4

Da= Permissible Deflection N18 = total number of axles equivalent to 18 kips (8.2 Tn) (in millions)

All controls shall comply with the following: “Characteristic deflection is less than permissible deflection” (Dc<Da).

In case equipment with characteristics superior to the Benkelman beam (Deflectometer of impact, Deflectometer of sinusoidal vibration load, etc.) is applied, the measures taken shall be correlated in relation to the devices indicated in the regulations specified above


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Appendix 8

Terms of Reference for the Preparation of the Technical and Legal Diagnosis, Plan of Physical and Legal

Restructuring and preparation of Individual Property Files

1. AREA REQUIRING THE SERVICE Right of Way Management Unit of the Special National Transport Infrastructure Project - PROVÍAS NACIONAL.

2. CONTRACTING DENOMINATION Technical and legal service for the release of areas, preparation of individual files of technical and legal diagnosis, preparation of individual files for purposes of valuation, physical restructuring and registration of the property affected by the Longitudinal de la Sierra Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Puente Sahuinto/Dv. Pisco - Huaytará – Ayacucho, improvement and rehabilitation of the Izcuchaca – Mayoc sector.

3. SCOPE AND DESCRIPTION OF THE SERVICE

3.1 Activities

The CONCESSIONAIRE shall hire a Consultant specialized in the process of release of areas for road projects, preparation of the technical and legal diagnosis, preparation of the individual files with purposes of valuation for the process of restructuring and/or registration of the areas affected by the road works. To this end, it shall have a team of professionals with proven experience in the preparation of technical and legal diagnosis, in order to develop the process or physical and legal restructuring of the affected areas, required to carry out the infrastructure project. This procedure shall end with the registration of the areas affected in favor of Provías Nacional.

. 3.2. Activities regarding the diagnosis, physical and legal restructuring and

registration.

3.2.1 Review, evaluate and analyze the literal and graphic documents existing in the archives of PROVÍAS NACIONAL and the Ministry of Transport and Communications, referred to the Final Engineering Studies and other documents required for the service.

In this regard, coordination shall be made with the project manager and the experts from the Right of Way Management Unit, regarding the scope of the required information, existing in the central archives of PROVÍAS NACIONAL and/or the Ministry of Transport and Communications- MTC.

3.2.2 Request, manage and gather information at the Superior Court of Justice,

3.2.3 Gather information before the Registry of Property, regarding the Registry

and Cadastral background of the affected properties, taking into account


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the exhaustive review of volumes, records, electronic entries and titles physically and digitally filed (SIR and SARP).

3.2.4 Make field works for the identification and/or verification of those affected

and for the collection of information and/or documents, by virtue of the interviews with the owners of the affected property that are evidence of the registry ownership of each one of the owners and/or possessors of the property identified as affected. A copy of the identity card shall be requested for each affected individual, and for each of the possessors, the documents evidencing the ownership, as set forth in article 4.3 of Legislative Decree Nº 1192.

3.2.5 Perform the physical survey of the existing infrastructure over the entire

right of way of the mentioned road work, such as houses, existing highway, roads, canals, ditches, wells, limit of rural properties, determination of the road axis and other elements relevant to the adequate technical and legal analysis.

Perform the physical survey of the affected area and the matrix perimeter of the property, in order to determine the concordance or discrepancy of the registration and the physical reality, taking into account the provisions of Guideline Nº 001-2008-SNCP/CNC dated August 28, 2008, approved by resolution Nº 003-2008-SNCP/CNC. It shall be carried out in coordination with the experts of Right of Way Management Unit. Such physical survey shall be made with measurement equipment that allows obtaining accuracy in horizontal position no greater than 10 cm. Prior to the physical survey of the affected areas, a preliminary publication of the list of affected people shall be made, as well as the drawing containing the road axis, the limit of right of way and the affected properties, in the places most frequented by the population: Health Centers, markets, churches, community centers, squares, and the like. The physical survey of the matrix property shall be made with intervention of the possessor or its representative, and/or neighbors. For this purpose, the Contractor shall previously notify the owner of the property and neighbors; if the possessor or its representative is not present, the delimitation of the property shall be made before the authority of the sector. To evidence the physical survey, a Certificate of Realization of the Technical Work shall be prepared and signed at least by the owner or possessor of the property, its representative or the authority of the sector and the professional responsible for the cadastral survey that participates in the event.

Onsite landmarks shall be made (according to the regulations established by IGN) for the geodesic control points that shall be used for the execution of the physical survey activities detailed in the preceding paragraphs. Position values of the geodesic control point shall be certified by the National Geographic Institute. The graphic representation of the physical survey shall additionally contain the geometric scope of the right of way represented in a closed polygon (polyline, it shall not contain elements called “arcs”), according to the details specified in the Ministerial Resolution (all articles) that approves the right of way. It shall also contain the track axis of the driveways, the axis of the


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median (if applicable) and the limit of the construction area. It shall also contain the graphic representation of the control points used and monumented for the execution of the survey activities, and stations and any other elements required shall also be included. Any graphic representation shall be referred to Datum WGS 84 in UTM coordinates, using for this purpose elements of the National Geodetic Network and its equivalent in Datum PSAD56, indicating and detailing the procedure used to obtain the equivalence of Datum PSAD 56.

3.2.6 Perform the technical and legal study and analysis based on the

documentation, drawings and descriptive memories, gathered from the affected owners, public and private entities, etc., which shall be complemented with the verification and the physical survey made in the field, in which the technical and legal situation of the properties will be determined and the actions of release and restructuring according to Law, Law Nº 30230, Legislative Decree Nº 1192 and other complementary and related regulations. This document shall be submitted in physical and digital format (Word or Excel, as appropriate) as follows:

General Report of the Technical and legal Analysis: For all the properties affected by the mentioned right of way; containing the results of the Technical and Legal Diagnosis, detailing the general data of the project, identification and characteristics of the area of study, the methodology used in the study, the activities performed for the preparation of the report, a brief description of the property ownership in the area of study and recommendations for the physical and legal restructuring and registration of the areas comprised in the Right of Way according to the regulations in force. It shall include:

3.2.6.1 Technical Report of Physical Survey: it shall detail the

methodology and the procedures used, enclosing in digital format the files that support the elements used for said purpose (raw data, post-processed data, technical record of equipment used, technical record of the geodesic control points used and the Permanent Tracking Station, certificates of calibration (if applicable), copy of the field notebook and others, as well as the printed and digital drawings of the physical survey (as indicated in item 5.2.5) on a conventional scale and duly formatted for their adequate reading and analysis, photographs and other elements that are deemed convenient (Word file, DWG and SHP drawings).

3.2.6.2 One (01) summary table of all the property affected by the road

work: Comprises the property identified and coded (according to the guideline issued by PROVIAS NACIONAL) along the road project with the total of the affected areas both of owners and possessors, describing data such as: item, code of affectation (according to the format provided by Provías Nacional), surnames and names and/or corporate name of owners or possessors, Identification Card, marital status, geographical location of the property, cadastral unit, stations, side, type and use of property, total area, affectation area, legal condition (owner or possessor), status of property (registered, not registered), registry data (volume, record and/or electronic entry), property ownership background


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(registration, detachment or accumulation, etc.), liens and encumbrances, duplication of entries, nature of holder (state, private). Such table shall contain remarks, conclusions and recommendations related to the actions of acquisition, physical and legal restructuring and the registration of the areas affected by the road work, as appropriate, which shall be delivered in physical and digital format (Excel spreadsheet).

3.2.6.3 Six (06) tables containing the following information: i) Holders

of properties duly registered in the public registry, ii) Owners not registered in the Public Registry, but with documentation that supports their right, iii) Possessors who have some document that supports their condition, or without it, iv) Properties with duplicate registry and/or judicial proceeding v) Properties with lien or encumbrance or mortgage, vi) State properties registered and not registered; said tables shall have observations that support their classification and shall be delivered in physical and digital format (Excel spreadsheet).

3.2.6.4 Drawing of Mosaic of Matrix Properties: It shall contain the

perimeters of farms, ranches, rural communities, etc., registered and not registered, that are overlaid and involved in the area of the road project. Such drawing shall also include the properties affected by the right of way, indicating individually the source of information.

3.2.6.5 Drawing containing the Mosaic of Properties: It shall contain

scanned and vectorized information of the cadastral and/or topographical sheets of the area of influence of the project, requested in item 5.2 (its submission shall only be in digital forma).

3.2.6.6 Key Drawing of Affected Properties: It shall contain the affected

properties, detailed according to their legal condition (registered and not registered, etc.), possessors and other areas that comprise all the right of way of the road work. It shall also identify the affected properties owned by the State and the private sector.

3.2.6.7 Thematic Drawing of the area occupied by the right of way of

the road work: it includes the mapping information (zoning, archaeological areas, mining concessions, natural protected areas, marginal strips, etc.) gathered from the different consulted entities, including the stations, the road axis, right of way.

The drawings requested in the previous paragraphs shall be prepared and submitted in the UTM projection system, Datum WGS84; additionally, said drawings shall be submitted in the UTM projection system, with Datum PSAD56, indicating the procedure used to obtain the equivalence of the Datum PSAD 56, according to the corresponding geographical area. Such drawings shall be conditioned to a conventional scale and must be submitted printed in color and in digital format (DWG format 2010 version SHP and PDF). The scale of printing shall be conventional and appropriate for visual analysis.


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In case of DWG files, the names of Layer of layers of information shall be accompanied by their corresponding description, in the same DWG format, to facilitate analysis.

3.2.6.8 Files of Technical and Legal Diagnosis: Corresponding to the

properties (registered, not registered and possessors) affected by the road work, which shall be submitted individually. Such files shall have the following characteristics:

a. Technical and Legal Diagnosis Record

Code of affected property. Data of the Holders of the Property (owners and/or

possessors), National Identification Card number, marital status, detail of documents supporting the ownership or possession of the property (property title, possession certificates, etc.), Legal Condition, home address and telephone number of the affected people (if any).

Geographical location of the property, cadastral unit, block, lot, etc.

Sections, progressive and side of affectation of property. Data of the property (property registered, property not

registered, property in process of registration, etc.), method of acquisition of the property, ownership condition (owner, possessor), registration date, Legal ownership document, technical data of the property (registered area and perimeter).

Property type (rural, urban, etc.), Zoning (approval resolution) and use of the affected area (agricultural, forestry, housing, natural pastures, etc.).

Physical characteristics of the affected property (indicate if it has water, electricity, sewerage, telephone, water resource mode, etc.), and indicate the graphic area of the total property and the affected area.

Results of the collection of relevant information from the public and private entities for the physical and legal diagnosis study.

Technical analysis of the affected property (general characteristics of the affected property, determination of the registration information, analysis of the cadastral basis, analysis of the zoning type, graphic or physical overlay (the occurrence of a physical overlay is impossible, in my opinion, the correct term is controversy) of the affected property, results of the evaluation of the registry, cadastral information and field work, etc.).

Legal analysis of the affected property, based on the information gathered from public institutions and the information verified and collected on field to determine its legal condition (owner and/or possessor, intestate successions, tenants at sufferance, supporting documents, ownership background, description of the registration, legal proceedings, mortgages, duplicity of registrations, legal identity, affidavit of property tax appraisal, etc.

Submission of the physical and legal Restructuring Plan, with conclusions and recommendations oriented to the physical and legal restructuring actions, the acquisition and registration of the affected areas in favor of (detail the planned strategies).

Terms and costs of the restructuring mechanisms that will be applied in each case.

General Remarks: Shall indicate, among others, the geographical information used (PETT, COFOPRI, SUNARP, etc.), indicating its update date and technical details such as Datum, Geographic Zone, survey methodology, etc.

Photographic registry in color.


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b. Individual Drawings of Diagnosis for each affected property Drawings shall contain at least one table of technical data of the area and perimeter, indicating in a legend the overlaps and corresponding areas, also showing the right of way, track axis and progressive, as well as toponymy of the sector.

Individual Drawings for each affected property shall be submitted printed in color and in digital format (DWG format version 2010 and PDF) in UTM Datum WGS84 projection system and only in digital version (DWG format version 2010 and PDF) for the drawing with UTM Datum PSAD56 projection system, indicating the procedure used to obtain the equivalence of the Datum PSAD 56. In case of DWG files, the names of Layer of layers of information shall be accompanied by their corresponding description, in the same DWG format, to facilitate analysis.

c. Supporting documents (ANNEXES).

Supporting documents used for the study shall be attached, such as: Results of cadastral searches for registered areas and individually possessed areas, registration records, filed titles, drawings, National Identity Card, possession certificate authenticated according to Legislative Decree Nº 1192 and other documents relevant to the property and/or possession, obtained in the different public and private entities. Such documentation shall be issued within three (03) months of the start of the service. In this context, the contractor shall carry out the first delivery of all the primal cartographic information (requested, acquired and/or generated), which served for the preparation of the Physical and Legal Diagnosis of the properties affected by the road work as well as photographs in color of the affected property. These documents shall be submitted printed in color and in digital version (PDF). These supporting documents (ANNEXES) shall be submitted in physical and digital format. In the case of reconstruction of drawings filed in the archived titles and whose descriptive memories have a table of coordinates, the consultant shall add such table in Excel format. In the case of reconstruction of drawings filed in the archived titles and whose descriptive memories do not have a table of coordinates, but such coordinates are identified in the physical drawing, the consultant shall submit the image of the georeferenced drawing shown in DWG format.

3.2.7 if applicable, it shall prepare the file for the purposes of expropriation, of the

private property, with duplicity of registration, legal proceeding or negative of the holder of the affected property to direct negotiation, which shall contain, the Technical and Legal Record for Expropriation, the drawings and descriptive memories, the Certificate of Cadastral Search and In the case of reconstruction of drawings filed in the archived titles and whose descriptive memories have a table of coordinates, the consultant shall submit the Technical Report issued by Public Registry and other documents relevant to the process.

3.2.8 Make the corresponding queries and coordination with representatives of

the competent entities, in order to prepare the files of acquisition, restructuring and registration of the areas affected by the road work in favor of Provías Nacional.


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3.2.9 Prepare and process the registration of the Preventive Annotation of the area of the road work within the framework of Art. 42 of Law Nº 30230.

3.2.10 Preparation of the detachment drawings, remnant drawings, perimeter

drawings for cadastral prevalence, etc., with their corresponding descriptive memories for each one of the properties acquired and/or affected by the road work, as appropriate, in order to request the registration in favor of Provías Nacional. In case it is not possible to determine the area, the boundaries or perimeters of the remnant area, the Fourth Final Complementary Provision and of the Regulations on Property of SUNARP shall be applied. All the drawings mentioned above shall be signed by a cadastral supervisor.

3.2.11 Carry out the technical and legal actions oriented to the physical and legal matrix restructuring process, individual procedure for the regularization of the chain of title domain, procedure for area rectification, regularization of the ownership right or any other real right, in the corresponding Registry of Property, procedures of reversal, rectification, correction of registry inaccuracies, procedure of declaration of abandonment, application of prevalence according to Article 47° of Law Nº 30230, registration and/or any other procedure oriented to correct the deficiencies contained in the registration of the property affected within the framework of Law Nº 30230 and its Regulation Supreme Decree Nº 019-2015-PCM in agreement with the Second Transitional Provision of Decree Law Nº 1192. If the case may be, the cadastral certified referred to in. 11 of Supreme Decree Nº 019-2015-PCM shall be requested, and the preventive annotation regulated in Art. 7 of Supreme Decree Nº 019-2015-PCM shall be made.

3.2.12 Prepare, process and make the follow-up of files in order to carry out the registration of State properties, prepared within the framework of Law Nº 29151, Law Nº 30230, Legislative Decree Nº 1192 and other complementary and related regulations. In case of observations, these shall be corrected within the established deadline. Thereupon, with the Resolution that approves the interstate transfer, a legal file shall be prepared to be submitted to the corresponding Registry Office, in order to request the registration in favor of Provías Nacional.

3.2.13 After performing the physical and legal restructuring actions mentioned in

item 5.2.11, the perimeter drawings and descriptive memories shall be prepared pursuant to Guideline Nº 002-2014-SUNARP-SN, to make the cadastral search for each one of the properties affected by the road work project before the Registry of Property of the corresponding Registry Office.

3.2.14 Prepare, manage files for registration in the Public Registry for all the

property subject matter of the procedure of acquisition by direct negotiation, which shall include all the technical and legal information, as well as the physical and digital information, and contain the requirements set forth within the framework of Law Nº 30230, Legislative Decree Nº 1192, Law Nº 29151 and other complementary and related regulations. In case of observations, these shall be corrected within the established deadline. Thereupon, with the Resolution that approves the interstate transfer, and


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the follow-up shall be made up to the registration in favor of PROVIAS NACIONAL.

3.2.15 In case some properties are pending registration or objections are made in

the process, the contractor shall state the action strategies to be applied both technical and legally in order to complete the process.

3.2.16 Indicate the strategies and a restructuring plan for properties whose

registration could not be done in favor of PROVIAS NACIONAL, oriented to the physical and legal restructuring actions, the acquisition and registration of the affected areas in favor of Provías Nacional (detail the planned strategies).

3.2.17 Deadlines and costs for the restructuring mechanisms to be applied in each

pending case.

3.2.18 Prepare a Mosaic drawing of the areas affected by the road work, which were recorded in the Public Registry.

3.3 Activities regarding the preparation of the Technical and Legal Individual

Files for Appraisal in relation to each one of the properties affected by the right of way, Individual files shall consist of the following:

3.3.1 Descriptive Memory: Shall include the information about the owner

(private) or possessor and/or co proprietor, registration of property, land information (location, property name, areas, boundaries and perimeter measurements of the total area, affected area and the remaining area), if applicable, technical characteristics of building (construction and material characteristics, basic infrastructure services, age of the same, condition, total area, directly and indirectly affected area, information of complementary works concerned (description and metering), signed by a Civil Engineer in the case of buildings in urban properties or Agronomist and/or Agricultural Engineer regarding rural properties with plantations and/or crops. It shall be noted that if there is a remaining area not feasible or useless for the purpose it was intended, this fact shall be indicated for valuation with the appropriate support in the descriptive memory. The descriptive memory shall also contain the necessary color photographs of the affected area, where affectation is shown.

3.3.2 Drawings

Drawing of the affected area and drawing of the matrix area They shall contain: Table of technical data for boundaries and perimeter measurements Table of data of the holder and other descriptive data of the affected area and matrix area Location scheme of the affected property, appropriately georeferenced in UTM Datum WGS84 coordinates. Additionally, the remaining areas shall be shown with regard to the Right of Wary, the trace of the Track axis, progressives, boundaries or the right of way, toponymy and planimetry.


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The graphical information of the drawing shall make reference to Datum WGS 84. The drawing shall contain a double table of technical data of the same property, one referred to Datum WGS84 and the other one to Datum PSAD56.

It shall also attach a Key drawing and a summary table identifying the affected property and maintaining the references. They shall be prepared in UTM, datum WGS84 coordinates, using a 1/1000 scale or an appropriate scale of conventional use for the DC. that allows its adequate visualization and analysis.

3.3.3 Location, distribution and elevation drawings of the affected property,

for affectations of buildings, Distribution drawings of the affected property shall be presented in 1/100 scale or an appropriate scale of conventional use, stating a detailed table of construction materials, direct and indirect affected area, complementary works, if appropriate, and also elevation drawing, which shall be submitted in physical and digital format (CAD and PDF program), in color. i) Informative copy of the registration record not older than six months from

issued, in case of a registered property ii) Construction certificate, if any iii) Affidavit of Property Tax Appraisal, corresponding to the previous year,

if any iv) Quantified list of permanent and/or temporary crops, indicating their

characteristics, if applicable (type, species, age, quantified by are for temporary crops and by unit for permanent crops), signed by an agronomist and/or agricultural engineer. This item shall be part of the descriptive memory.

v) Quantified list of complementary works and fixed and permanent facilities, which shall be part of the descriptive memory.

vi) In case of special construction, the following documentation shall be attached, if applicable: drawings, descriptive memory and technical specifications related to the same.

vii) If existing, attach the estimated property value to the file.

Documents of the passive subject Individual files shall include the following: a. Supporting documents in relation to the registered or not registered

property. In case of owners, a simple copy of the property title (DNC does not accept copies of titles, unless such property title is not recorded, such as titles of the DGRA).

b. In case of owner, with document of definite date and the corresponding chain of title of the main title holder.

c. In case of possessor, the certificate of possession and documents as complementary evidence.

d. In case of natural person, a simple copy of the valid National Identity Card - DNI or online consultation sheet issued by RENIEC.

e. In case of legal person, an informative copy of the updated registration record, issued by the Registry of Legal Persons of SUNARP.

f. It shall be noted that for the files whose holder is the Rural Community, the holder of the affected land will be Community. For this purpose, it shall be supported with evidence that prove the ownership or possession and the legal representation of the rural community. Likewise, with


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regard to the conduction exercised by its active and/or integrated community members, it shall be credited through the certificate and the registry of community members provided by the Community, taking into account for this purpose only the affectation of improvements, plantations and complementary works.

Economic loss Comprises only the Consequential Damage and Loss of Profit, which shall be appropriately proven or have the duly supported report. It must be noted that the expense for the movement of property within the national territory incurred by the passive subject is part of the consequential damage (Decree Law Nº 1192).

Tax expenses Income tax shall be recognized.

3.4 Prepare the Drawing of consultation perimeters and Descriptive Memory

They shall be prepared in accordance with Guideline Nº 002-2014-SUNARP-SN, in order to perform the cadastral searches before the Registry of Property of the corresponding Registry Office for each one of the passive subjects mentioned in Legislative Decree Nº 1192 (registered owners, not registered owners, possessors certifying 10 years or more of possession), located in the mentioned road section, provided no previous actions of legal and physical restructuring are required for the transfer in favor of PROVIAS NACIONAL.

3.5 The contractor shall install an office for cabinet work and reception of documents,

which shall be located in the area of the road project. The installation of the office shall operative within 10 calendar days of the commencement of the service.

3.6 To perform field activities, both for diagnosis and individual files, the contractor

shall have the transport service required to make the trip and field works along all the section of the road. It shall include a driver and fuel.

3.7 The Head of service, in coordination with the project manager, shall go from the

area of the road work to the Right of Way Management Unit, in order to inform about the progress of the assigned activities. To this end, he shall travel to the headquarters for 12 days, distributed in 4 visits, after coordination with the project manager.

3.8 Other activities requested by the Entity based on the object of the service, prior

agreement between both parties.


200

4. DELIVERABLES AND DEADLINE Deliverables shall be made in two (02) physical copies and one (01) digital copy. Deliverables and deadlines shall be as detailed below: FIRST STAGE First Deliverable Progress report of the technical and legal analysis study, which shall describe the activities performed for the execution of the service. It shall describe the activities carried out in the execution of the service, including a description of the activities referred to physical survey, in accordance with Decree Law Nº2. Deadline: 45 calendar days of the commencement of the service. Second Deliverable It shall include the individual files of technical and legal diagnosis completed at 100% for each affected property, prepared according to the characteristics indicated in the activities of this term of reference and shall be for all the properties in accordance with Decree Law 1192 *Deadline : ---- calendar days of the commencement of the service. Third Deliverable: Presentation of the files set forth in 5.4 (consider three equipment

units) Presentation of the progress of the activities set forth in item 5.2.12

*Deadline : ---- calendar days of the commencement of the service. Fourth Deliverable: - Present the progress of the preparation of files of registration

in the Public Registry, (registration of intestate successions, rectifications, formalities for purchase and sale contracts, rectification of marital status of the affected individuals, analysis and application of information prevalence, etc.), which shall include all the technical and legal information and contain the requirements established within the framework of Law Nº 30230, Legislative Decree Nº 1192, Law Nº 29151 and other complementary and related regulations.

Presentation of the proof of submission of files in SUNARP for cadastral search

If the case may be, at the request of the entity, the file for

appraisal shall be submitted according to item 21.6 of Decree Law Nº 1192, which will be used to have the estimated value for the advanced payment of 50%

*Deadline : ----- calendar days of the commencement of the service Fifth Deliverable Presentation of Individual Files


201

Presentation of the individual files according to item 5.3, 50% of the total affected individuals (which will lead to the communication of the affected individuals for the preventive registration) If the case may be, at the request of the entity, the file for appraisal shall be submitted according to item 21.6 of Decree Law Nº 1192, which will be used to have the estimated value for the advanced payment of 50% *Deadline : ----- calendar days of the commencement of the service. Sixth Deliverable Presentation of Individual Files

Presentation of the individual files according to item 5.3, 50% of the total affected individuals (which will lead to the communication of the affected individuals for the preventive registration).

Presentation of the interstate transfer files, registered in the name of PROVIAS NACIONAL.

Presentation of the individual files of the properties having duplicity and controversy over the property, in accordance with item 5.3 and others.

Presentation of a copy of the file submitted to the Public Registry and copy of the proof of request for Preventive Annotation of the area of the right of way of the road work within the framework of Art. 42 of Law Nº 30230, submitted to the Public Registry for 50% of the private properties whose individual files were presented in the fifth deliverable, and for which the entity will delivery communications to the passive subject.

*Deadline : ----- calendar days of the commencement of the service Seventh Deliverable Presentation of a copy of the file submitted to the Public Registry and copy of the proof of request for Preventive Annotation of the area of the right of way of the road work within the framework of Art. 42 of Law Nº 30230, submitted to the Public Registry for 50% of the remaining private properties whose individual files were presented in the fifth deliverable, and for which the entity will delivery communications to the passive subject. *Deadline : ----- calendar days of the commencement of the service Eighth Deliverable

Presentation of the final progress of the registration activities in the Public Registry, (registration of intestate successions, rectifications, formalities for purchase and sale contracts, rectification of marital status of the affected individuals, analysis and application of information prevalence, etc.).

Presentation of the final report on properties for registration

*Deadline : ------ calendar days of the commencement of the service Presentation of a report on the actions carried out to achieve the

physical and legal restructuring and the registration of the affected areas in the name of Provías Nacional.


202

Ninth Deliverable

Presentation of a final report on the properties pending registration and the strategies to follow to complete such registration.

*Deadline : ----- calendar days of the commencement of the service.

*The entity, from the second deliverable, shall evaluate the deadlines required for

their submission. 5. OTHER CONDITIONS

The Contractor shall take into account the compliance with the deadlines contained in this ToR, since they are regulated in Decree Law Nº 1192

Unit Cost for Technical and Legal Property Diagnosis

Detail Soles (S/)

Physical verification and topographic of the property, the road design and existing infrastructure

720.00

Legal verification of property 270.00

Acquisition of information 250.00

Rental and services 70.00

Mobilization and Logistics support (allowances and others) 85.00

Publications 60.00

Preparation of drawings, mosaics and others 115.00

Notices and Communications 30.00

Total Direct Cost 1,600.00

Profit 10% 160.00

Subtotal 1,760.00

Contribution for regulation 1% 17.60

Subtotal without VAT 1,777.60

VAT 18% 319.97

Total 2,097.57


203

Unit Cost for Structuring Plan

Detail Soles (S/)

Field Works

Verification and Gathering of Information per Property 21.80

Verification and Survey of existing Buildings per Property 62.12

Update of registry records and filed titles - properties 34.10

Desk works

Coordination with the competent authority 82.00

Drawings per property 69.60

Descriptive memories per property 68.20

Notices/Communications 19.00

Preparation of File – Printing and others 16.50

Total Direct Cost 356.82

Profit 10% 35.68

Subtotal 392.50

VAT 18% 70.65

Subtotal with VAT 463.15


Total 467.78

** Drawings shall be signed by a cadastral supervisor so that the properties may be acquired

Unit Cost per Individual File with appraisal purposes Owner

Detail Soles (S/)

Field Works



Verification and Survey of existing crops and plantations per property 69.80

Registry records and filed titles - properties 89.50

Desk works


204

Detail Soles (S/)

Drawings per property and Descriptive memories per property 112.20

Social awareness: Approach and explanation to the population 50.00

Verification and gathering of information (loss of profit and consequential damage) per property

85.05

Collection of information, analysis and calculation to determine income tax, as appropriate.

30.00

Interinstitutional coordination 21.15

Preparation of File (Printing and others) 17.80


Profit 10% 58.60

Subtotal 644.60

VAT 18% 116.03



Total 768.23

Possessor

Detail Soles (S/)

Field Works



Verification and Survey of existing crops and plantations per property 69.80

Search of information in SUNARP 32.50

Obtaining of Possession Certificates 75.00

Desk works

Drawings per property and Descriptive memories per property 112.20

Social awareness: Approach and explanation to the population 50.00


205

Detail Soles (S/)

Verification and gathering of information (loss of profit and consequential damage) per property

30.00

Collection of information, analysis and calculation to determine income tax, as appropriate.

30.00

Interinstitutional coordination 21.15

Preparation of File (Printing and others) 17.80


Profit 10% 54.90

Sub total 603.85

VAT 18% 108.69



Total 719.66

Unit Cost for Presentation of File to SUNARP to obtain the CBC

Description Soles (S/)

Submission of file and drawing in SUNARP for Cadastral Search Certificate (CBC)

Preparation of File according to the Guideline of SUNARP of Law Nº 1192 126.30

Interinstitutional coordination SUNARP 30.00

Payment of fees for obtaining cadastral information 74.00


Profit 10% 23.03

Sub total 253.33

VAT 18% 45.60



Total 328.82


206

Appendix 9

Condition parameters and Service Levels required in the Subsections that the GRANTOR shall deliver to the CONCESSIONAIRE where no interventions of

Rehabilitation and Improvement or Initial Periodic Maintenance shall be executed

SUBSECTIONS TO BE INTERVENED BY THE GRANTOR

a) The GRANTOR shall intervene the following Subsections before delivering them to the CONCESSIONAIRE within the terms indicated in Clause 5.10: • Dv. Huancayo – Pte. Chanchas • Pte. Chanchas - Huayucachi • Huayucachi - Imperial • Imperial – Izcuchaca • Mayocc – Huanta • Abra Tocto - Ocros • Ocros - Chincheros • Chincheros - Santa María de Chicmo • Dv. Kishuara (Emp PE-3SE) - Dv. Sahuinto (Emp PE-3S) • Dv. Sahuinto (Emp PE-3S) - Puente Sahuinto

b) The CONCESSIONAIRE shall receive the Subsections excluding only sectors that do not meet the Service Levels indicated in this Appendix. In case of discrepancy about the Service Levels, any of the Parties may request that the dispute is settled through a technical assessment by a civil engineer chosen by agreement between the GRANTOR and the CONCESSIONAIRE. In case after five (5) Days from the date of installation, the Parties have not appointed the common expert, either party may request the Peruvian Engineers Association to appoint the expert. In no case, may the expert have had direct or indirect links with any of the Parties in the past five (5) years. The decision of the expert shall be issued within a period of thirty (30) Days of the date the Parties have supported their position within the time allowed by the expert, shall be final and cannot be contested. The costs of the expert’s work shall be borne by the Party not favored with the pronouncement of the expert.

c) If these sectors are critical sectors, the procedure in Clauses 6.43 to 6.46 shall apply. For the execution, procedure in Clauses 6.32 to 6.38 shall apply. The terms for the formulation, review and approval of the studies shall be determined by the GRANTOR.

d) In case sectors are not critical sectors, the GRANTOR is obliged to execute the interventions required to reach the corresponding Service Levels.

e) The qualification of critical sectors shall be jointly made by the GRANTOR and the CONCESSIONAIRE when delivering the Subsections.


207

f) Service Levels will not be required during the period of the formulation of the FES, approvals and execution of interventions in the identified sectors.

g) Failing to receive the sectors not complying with the Service Levels indicated in this

Appendix may not prevent the collection in the Toll Units located in the Subsection. h) For the Conservation period, the Service Levels and the response deadlines to be

considered in the indicated Subsections shall be the same as those considered for the Conservation of Subsections where intervention at the Periodic Maintenance level will take place (Appendix 2 of ANNEX I of the Contract)

i) Procedure for the delivery of Subsections to be intervened by the GRANTOR and

delivered to the CONCESSIONAIRE. The GRANTOR and the entity contracted by the GRANTOR and which is responsible for intervention in the Subsections referred to in paragraph a) of Appendix 9 of ANNEX I, shall meet with the CONCESSIONAIRE, in a single event, for the delivery of such Subsections to the CONCESSIONAIRE itself, complying with the Service Levels set forth in Appendix 9 of ANNEX I of the Concession Contract.

Such act shall be agreed between the involved parties, in accordance with the maximum delivery terms for the delivery of the Concession Area, as indicated in Clause 5.10 of the Contract. Moreover, before the act of delivery of the Concession Area for such Subsections, the GRANTOR, together with the entity contracted by the GRANTOR shall conduct a measurement using technological tools such as the laser roughness tester, duly calibrated, ensuring compliance with the Service Levels indicated in Appendix 9 of ANNEX I of the Concession Contract.


208

SERVICE LEVELS FOR: ROLLING SURFACE


Width of the rolling surface


Remains

Reduction of the structural package


Not considered


0%

Cracks


0%

Maximum percentage of area with cracks entre 2.5 y 5 mm

5%


0%

Rutting Maximum percentage of area with rutting higher than 12 mm

0%


0%


0%



0%

Existence of obstacles Maximum number of obstacles 0%

Peelings Maximum percentage of area with peelings

1%

Detachment of edges Maximum percentage with detachment of edges

0%

Longitudinal cracks in the middle of the driveway and on the edges

Maximum percentage of longitudinal cracks

0%

Roughness

Maximum moving average roughness with a 100-m interval, reconciled with the IRI survey standard

<= 3.0 m/km


209

SERVICE LEVELS FOR: BERM

PARAMETER MEASURE SERVICE

LEVEL

Width of berm Maximum percentage of width reduction Remains

Holes Maximum percentage of area with holes 0%

Cracks


0%

Maximum percentage of area with cracks between 2 and 5 mm

5%


0%


5%


2%


Maximum percentage of area with loose material 10%


Maximum number of obstacles 0%

Gap between the driveway and the berm

Maximum height (driveway - berm) of the gap 20 mm

Maximum percentage of the length with gap higher than 0 mm and lower than 15 mm

10%

Detachment of berm edges

Maximum percentage of detachment 5%

SERVICE LEVELS FOR: SPEED BUMPS (CONCRETE)


LEVEL


Maximum percentage of width reduction 0%

Cracks

Maximum percentage of area with cracks having openings larger than 5 mm

0%


10%

Existence of obstacles Maximum number of obstacles 0%

Gaps between joints Maximum gap height 10 mm


210

SERVICE LEVELS FOR: WALLS (CONCRETE)


LEVEL

Cracks Maximum percentage of area with cracks having openings larger than 5 mm

0%

Cracks Existence of obstacles


0%

Maximum number of obstacles 0%

Gaps between joints Maximum gap height 10 mm



Cleaning of drains Presence of vegetation 0%

SERVICE LEVELS FOR: DRAINAGE (SEWERS, DITCHES, CROWN DITCHES, DRAINS, HEADS AND SPILLWAYS)


LEVEL

Obstructions to the free runoff of the design hydraulic flow in sewers, ditches, crown ditches, pontoon bridges, drains heads and spillways

Vegetation, sedimentation, clogging and other elements that block or alter the free runoff of the design flow.

0%

Structural failures Undercuts, settlements, loss of geometry, failures that affect the structural or hydraulic capacity

0%


211

SERVICE LEVELS FOR: HORIZONTAL SIGNALING



Minimum Line Width





7.5 m +/- 2%


Me. Emáx = 10 cm


Me. Emáx = 2 cm


















Distance between studs on the axis (tangent) 24 m

Distance between studs on the axis (in curves)



Displacement from its original position 3 mm


Not Admitted



20%



212

SERVICE LEVELS FOR: VERTICAL SIGNALING







Minimum Reflectivity Coefficient (angle of view of 0.2° and incidence of - 4°)









Not admitted


Not admitted


Not admitted



Loose or incorrectly adjusted panels Not admitted



Not admitted



Not admitted



Not admitted



Not admitted



Not admitted


213

SERVICE LEVELS FOR: GUIDANCE AND DEFENSE ELEMENTS


Missing elements Any individual missing element Not Admitted

Deficiency in the placement of metal defenses

Location, alignment and height Shall respond to the provisions of EG-2000-MTC (**)

Deterioration and cleaning of metal defenses

Folds of damage Not Admitted

Absence or misalignment of fixing bolts

Not Admitted

Oxidation of side surfaces Not Admitted

Dirt, paint or posters Not Admitted

Absence of reflective paint or sheet in the “L” washers with a coefficient of reflectivity of 40 cd/lux/m2 within a minimum area of 60 cm2

Not Admitted

Deficiency in the placement of railing parapets

Location, alignment and height Shall respond to the provisions of EG-2000-MTC (**)

Deterioration and cleaning of railing parapets

Cracks, fractures or visible frames

Not Admitted

Deficiencies in painting Not Admitted

Absence of reflective paint or sheet with a coefficient of reflectivity of 40 cd/lux/m2 within a minimum area of 50 cm2, every 2 m

Not Admitted


Not Admitted

Deficiency in the placement of curve delineators

Location, alignment, separation and height


Deterioration and cleaning of curve delineators

Cracks, fractures or visible frames (in the case of concrete delineators)

Not Admitted

Deficiencies in painting Not Admitted

Absence of reflective paint or sheet on both sides with a coefficient of reflectivity of 40 cd/lux/m2 within a minimum area of 70 cm2

Not Admitted


Not Admitted


(**) General Technical Specifications for Road Construction


214

SERVICE LEVELS FOR: RIGHT OF WAY AND/OR CONCESSION AREA


Excess of vegetation height (*) Maximum vegetation height


Obstacles Obstacles in the first 6 m measured from the Edge of the berm


Erosion and sediments Erosions on slopes, foreslopes and in the right of way and/or concession area in general


Standing water (*) Standing water in the right of way

Not Admitted

Clearing and Scaling of Slopes Removal of Blocks and Unloading of unstable sectors

Not Admitted

Waste

Waste of any nature or elements alien to the path (dead animals, accident debris, abandoned cars and loads, branches and leaves, debris or remains of construction or materials used in maintenance)

Not Admitted

Advertising

Unauthorized notices or advertising in any element of the Right of Way and/or Concession Area

Not Admitted

(*) This defect is not considered in sections located in the jungle


215

SERVICE LEVELS FOR: BRIDGES



According to the manual for the survey of defects indicated in Appendix Nº 07


Damage to overlay None of the defects is admitted



Damage to concrete elements None of the defects is admitted

Damage to support systems None of the defects is admitted

Damage to metal elements None of the defects is admitted

Damage to seismic systems None of the defects is admitted

Damage to suspension systems None of the defects is admitted

Damage to masonry elements None of the defects is admitted



Undermining of foundations None of the defects is admitted







Damage to sidewalks None of the defects is admitted

Damage to the coating of the metal structure



216

SERVICE LEVELS FOR: TUNNELS DRIVEWAY AND BERMS IN TUNNELS


LEVEL


Maximum percentage of width reduction 0.00%



10.00%

Holes Maximum percentage of area with holes 0.00%

Cracks

Maximum percentage of area with cracks with high level of severity

0.00%

Maximum percentage of area with cracks with medium level of severity not sealed

5.00%


0.00%

Rutting Maximum percentage of area with rutting higher than 12 mm.

0.00%

Subsidence Maximum percentage of area with subsidence greater than 25 mm.

0.00%


0.00%

0.00%


0.00%

Existence of obstacles Maximum number of obstacles 0.00%

Roughness for reception of Works Maximum sliding average roughness with an interval of 1 km (asphalt concrete)

2.0 IRI

Roughness during the conservation period

Maximum sliding average roughness with an interval of 1 km (asphalt concrete)

3.5 IRI

Gap between the driveway and the berm Maximum height (driveway - berm) of the gap

0.00 mm


217

SERVICE LEVELS FOR: TUNNELS TUNNEL COATING AND DRAINAGE


LEVEL

Cracks in concrete Maximum percentage of area with cracks 0.00%

Existence of loose material Maximum percentage of area with loose material 0.00%

Drainage Maximum blocked percentage 0.00%



0.00%

Obstruction in drains 0.00%

Stains or damage to concrete 0.00%

Foreign matter in joints 0.00%

Bird nests or insect colonies 0.00%

Vegetation in cracks 0.00%

Damage to overlay

Reduction of overlay thickness above 10% 0.00%

Holes of any size or nature 0.00%


0.00%

Patches in poor condition 0.00%

Rutting greater than 12 mm. 0.00%

Subsidence greater than 12 mm. 0.00%

Exudations (medium and/or high level) 0.00%



0.00%

Non-tight or unsealed joints 0.00%


0.00%

Breakage or chipping at the edges 0.00%


Flaking or detachment 0.00%


0.00%

Surface lesions greater than 0.5 cm deep. 0.00%

Cracks thicker than 0.3 mm, unsealed 0.00%


Fissures or cracks 0.00%

Corrosion 0.00%

Cracks or deformations 0.00%

Loss of connecting elements 0.00%

Damage to welds 0.00%

Flaking, bubbles or cracks in the protection paint 0.00%

Damage to protection galvanization 0.00%

Damage to railings and parapets Broken, missing, loose or misaligned elements 0.00%

Paint impairment 0.00%

Damage to sidewalks

Gaps 0.00%

Dirt 0.00%

Loose, missing or broken tiles 0.00%


0.00%



218

SERVICE LEVELS FOR: TUNNELS VERTICAL SIGNALING



Discoloration of the signal plates Chromaticity coordinates "X" and "Y" (45/0 geometry and angle of view pattern of 2")



Minimum Reflectivity Coefficient (angle of view of 02° and incidence of - 4°)









Not admitted


Not admitted


Not admitted



Loose or incorrectly adjusted panels

Not admitted



Not admitted



Not admitted



Not admitted



Not admitted



Not admitted

(*)Manual of Vehicle Traffic Control Devices for Streets and Roads


219

SERVICE LEVELS FOR: TUNNELS HORIZONTAL SIGNALING



Minimum Line Width





7.5 m +/- 2%


Me. Emáx = 10 cm


Me. Emáx = 2 cm


















Distance between studs on the axis (tangent) 24 m

Distance between studs on the axis (in curves) As established in the standard


Displacement from its original position 3 mm


Not Admitted



During the first 3 years following each of the interventions: 10%

During the rest of each period between Works 20%



220

Appendix 10

Technical information for the supply and installation of ducts and chambers Infrastructure The underground deployment of an optical fiber network requires infrastructure comprised of ducts and chambers, which are located in the subsoil, generally on the side of highways, roads, etc. The concept and scope of these components are detailed below. a) Ducts. Component located underground to allow for the installation, removal, protection

and maintenance of cables in a telecommunications service network. It is made of heavy PVC, and is generally used for main networks where ducts must be at least 4" in diameter. It comes in 5-6-meter-long pipes.

b) Sub-ducts. To install optical fiber cable in ducts, a second component called sub-duct

(several number of ways: 2, 3, 4, etc.) shall be previously installed. It is made of plastic and its presentation depends on the manufacturer

c) Chamber. Underground well intended to host connections and facilitate installation and change of direction of cables. It may be made of concrete, manufactured onsite (recommended for main high traffic highways) or prefabricated in fiberglass (for urban areas).


221

Chambers in roads in rural areas should be placed at intervals of 300 meters, depending on the level of difficulty involved in their construction (presence of rivers, bridges, etc.). In roads with curve sections the Interval varies, since they are place in every sharp curve found. The obligations of the CONCESSIONAIRE are referred to ducts and chambers and do not include supply of optical fiber.


222

Appendix 11

Toll Systems for the standardized operation Technical Specifications

System Equipment Specification Qty

Rail/Track

Optical Vehicle Detector IR sensor, Raised axle and trailer linkage detection, 1 cabinet

1

Sensor Pedal 1Cm resolution Incl. frame, warranty < 5M axles 1

Automatic Barrier Incl. loop detector, IR detector, Lamp(G,R), WL included

1

Toll Information Screen 3 color 1

OCR (ANPR) Optical recognition camera

Includes infrared light, post, cover, tuning 1

RFID antenna Reading only 1

Booth

Controller and Rail Terminal Industrial PC and peripherals, 17", SXVGA 1

Ticket Printer Thermal printing, Automatic cutting, Additional Paper

1

CCTV camera 520K pixels, 650 TV Lines, Outdoor Dome 1

e-Card Reader (Indoor) SO/IEC 14443 A & B compatible, 13.56MHz 1

e-Card Reader (Outdoor) 2 Tier type, ISO/IEC 14443 A & B compatible,13.56MH

1

Warning lamp Red/Green LED Lamp 1

Office

Toll Server 1GHz (Minimum), 1GB/100GB (Minimum), 2 Ethernet, Windows

1

Operation Terminal Core2duo, 512MB/60GB (Minimum), Windows 7 1

Printer Laser beam, 1200*1200dpi, A4/A3/Letter printer 1

Hub 10/100/1000 Ethernet 6 port (Minimum), 6.5Mbps (Minimum) through put

1

GSM Modem Peru GSM interface 1

Equipment, optical fiber support

Optical fiber communication 1

UPS 7.5 KVA, 200AH 12V*16ea, 4 hours 1

Others

Supervision Monitor for the Office

42 “ 1

Rail lamp 3.2W, Solar battery 2

Operation rail lamp 2 Color LED Lamp 2


223

Toll system: Central level

Description Amount

MONITORING server 1

TRANSSACTION server 1

DATABASE software 1

Computers 2

ON LINE video monitors 2

Monitoring software 1

DATABASE software 1

Management software 1

COMUNICAC equipment 1

VIDEO equipment 1

UPS 1

1. System architecture

Electronic

Card or Card

Tag

Electronic card reader

OVD Optical Vehicle detector

OCR optical characters

recognition

TID Toll information

screen

Equipment line

Bank

SUNARP

External authority

Central Server

Database 1

End of the operation

Central Server

VIASNAC

Local equipment

Lane Controller

Administration

Database 1

Communication

CCTV TV closed circuit

WL Warning lamp

TT Toll terminal

MLBS live movement transmission system

UPS

DVR TV closed circuit

DB1 Data

Toll

End of the operation

Equipment Tall

office

Vehicle

Classification

Open

Close

Treadle sensor

Control barriers

Number

Warning

light

Router

RP Ticket

printer


224

2. Lane toll system

2.1 Island toll system The essential characteristics of the lane installation is to detect with precision the following elements:

Vehicles: The number of vehicles is counted by detecting the width of the tire and the number of axis (including the lifted one), differencing individual and double tires to identify light vehicles and load vehicles.

Preventive measures against corruption: The axis number detection system, etc., confirms the difference in the type of vehicle and arbitrary changing of vehicle made by any worker (repots the number of axis of the vehicle and the image of the vehicle and identification plate). This is made with the following equipment: Numeric Treadle sensor: classifies vehicle by measuring the width of the tire and width of the treadle. Optical Vehicle detector: detects the trailer connection and axis through the interconnection of the treadle sensor. The following images show trailers and load trucks with the axis referred to passing through the office. Control barriers Line traffic light Canopy traffic lights CCTV (TV closed circuit): where the identification plate of the transaction can be seen, these images are recorded in the DVR of the toll office. Lane LED light: placed at the collection lane; lights have a solar cell integrated system to work automatically from sun to sun. OCR cameras (optical characters recognition): cameras to capture the identification plate of vehicles and digitalized them. Toll information screen (TID): LED screen to show the number of the identification plate of the vehicles, amount paid and other information so the driver can see the status of the transaction. Warning light (WL): rotating light and buzzer activates in abnormal situation when modifying the type of vehicle or plate number, changes in the amount counted.

2.2 Cabin toll system

The cabin toll system controls all peripheral installed in the collection island and keeps the database with the information generated.

Toll terminal (PC with touch-screen monitor): to manual record of vehicle plates for each transaction.


225

Ticket printer: thermal printer for each transaction, to pay with cash E-card reader: capture information upon approximation of the card to the reader. Tag reader: captures tag devices

3. Toll office system

Administrative terminal (PC with monitor minimum 02) Video monitor DVR (video recorder) TV closed circuit Server UPS MLBS live movement transmission system DVR TV closed circuit

4. Toll main office system Monitoring terminal (PC with monitor, minimum 02) Video monitor (52” flat screen) Main server UPS

5. Software configuration The software consists of the collection lane software, toll office software and management center software, for which the corresponding licenses will be paid.

6. Responsibilities a) Existing toll units have a Toll system – Detraction and equipment, the

CONCESSIONAIRE will pay the licensing and evaluate the renewal of equipment. b) For projected toll units, the CONCESSIONAIRE will pay the licensing of software and

will consider the equipment for its operation, which relation and technical specifications are contained in this Appendix.


226

Toll Lane Software

Start of Shift Special Data

End of Shift Violation Data

Tooling Data Plaza Interface

Tolling Management

Base Data

Management

Clearing

Process

Audit Lane Interface

Tolling Database

Base Management

Shift Management

B/L Management

Daily Clearing RFID Interface (reserved)

Sales/Stock Management

Bank Account Management

Data Inquiry

Toll Office Software

Raw Data

Base Data

Toll Center Software

Ext. Authority Interface

Sales/Stock Management

Bank Account Management

CCTV Monitoring

Tolling Data

Vehicle Information

Account Information


227

Appendix 12

Delivery of bridges comprised in the San Clemente – Ayacucho Subsection (Reference: Clause 6.4)

a) The CONCESSIONAIRE shall receive the 12 bridges to be replaced by the GRANTOR

in the San Clemente – Ayacucho Subsection. b) Bridges considered according to item 1.5 of ANNEX 9 of the Bidding Terms and

Conditions are the following: • Puente Huancano (31 m) • Puente Rumicahaca I (60 m) • Puente Niñacha (15 m) • Puente Supaymayo (15 m) • Puente Suchuna (15 m) • Puente Niñobamba (15 m) • Puente Rumichaca II (21 m) • Puente S-N/Km. 266+284 (15 m) • Puente Ccatumpampa (21 m) • Puente Angasmayo (31 m) • Puente Casacancha (31 m) • Puente S-N/Km. 327+733 (15 m)

c) For the reception by the CONCESSIONAIRE of the bridges listed in the previous

paragraph, these shall comply at least with the Service Levels considered for the reception of bridges where no interventions of Rehabilitation and Improvement or Initial Periodic Maintenance will be executed.

d) Failing to receive the bridges not complying with the Service Levels may not prevent the

collection in the toll units located in the Subsection, since it would affect co-financing. Likewise, it may not be a reason for the CONCESSIONAIRE to receive the other bridges.

e) In case of discrepancy about the Service Levels, any of the Parties may request that the

dispute is settled through a technical assessment by a civil engineer chosen by agreement between the GRANTOR and the CONCESSIONAIRE.

f) In case after five (5) Days from the date of installation, the Parties have not appointed

the common expert, either party may request the Peruvian Engineers Association to appoint the expert. In no case, may the expert have had direct or indirect links with any of the Parties in the past five (5) years.

g) The decision of the expert shall be issued within a period of thirty (30) Days of the date

the Parties have supported their position within the time allowed by the expert, shall be final and cannot be contested. The costs of the expert’s work shall be borne by the Party not favored with the pronouncement of the expert.


228

ANNEX II

REFERENTIAL MODEL OF DECLARATION OF ALLOWED CREDITOR

Lima, ……. ……….. 201….. Messrs. Ministry of Transport and Communications Jirón Zorritos N° 1203 Lima – Peru

Allowed Creditor: ..............................................

According to the provisions set forth in the Concession Contract of the Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte Sahuinto/Dv. Pisco – Huaytará - Ayacucho, we declare:

a) That we are not subject to impediments or restrictions (by contract, court, arbitration, administrative, legislative or otherwise), to assume and fulfill the commitment to finance ___________________ (CONCESSIONAIRE) [acting/participating as Representative of the Bondholders in the issuance of transferable securities/debt instruments] up to the amount of ____________, to the effect that this one (or that one) is in optimal conditions to meet the obligations under its responsibility in accordance with the Concession Contract Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Puente Sahuinto/Dv. Pisco – Huaytará – Ayacucho.

b) We hereby confirm that our competent internal bodies have approved [a credit line/our participation as Representative of the Bondholders on the issue of transferable securities values/debt instruments] up to the amount of ____________ in favor of _________ (CONCESSIONAIRE), the same that is intended to fulfill the obligations under the Concession Contract Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Puente Sahuinto/Dv. Pisco – Huaytará – Ayacucho.

c) That [acting on behalf of purchasers of the transferable securities/debt instruments issued as Issuer, ___________ (CONCESSIONAIRE)] we comply with the requirements established in the Concession Contract Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Puente Sahuinto/Dv. Pisco – Huaytará – Ayacucho, as well as those required by Applicable Laws, to qualify as Allowed Creditor in accordance with the terms of the Concession Contract assigns to this definition.

d) That we declare that the financing mentioned in subparagraph c) above will be held, among others, according to the provisions of the contract title _________ to be signed between _______ (CONCESSIONAIRE) and _________ [Financial Institution/ Representative of Bondholders].

Sincerely,

Signature: .....................................

Name: .................................. Representative of the Allowed Creditor.

Entity: ................................... Allowed Creditor.


229

ANNEX III PERFORMANCE BOND OF THE CONCESSION CONTRACT

Lima, …… ..................., 201....

Messrs. Ministry of Transport and Communications Ref.: Letter of Guarantee Nº ………….. Expiration:......................

We hereby and at the request of our customers, Messrs.................................................... (Name of legal person) (Hereinafter “the CONCESSIONAIRE”) set up this joint and several, irrevocable, unconditional and automatically enforceable bond without benefit of excussion or division, up to in the amount of US$ .............................................. ( American Dollars) in favor of the Ministry of Transport and Communications to ensure the proper and timely compliance with each and every one of the obligations of the CONCESSIONAIRE, arising from the signing of the Concession Contract of the Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte Sahuinto/Dv. Pisco – Huaytará - Ayacucho (hereinafter “the Contract”).

This guarantee shall also ensure the correct and timely fulfillment of the obligations of the CONCESSIONAIRE established under the provisions of the Legislative Decree of the Framework of Promotion of Private Investment through Public-Private Partnerships and Asset Projects approved by Legislative Decree Nº 1224.

To honor this guarantee in your favor, a written notarial request will suffice by the Supervisory Board of Investment in Public Transportation Infrastructure (OSITRAN), which must be signed by the Chairman of its Board or any person duly authorized by this body. The payment will be made 24 hours following your request in our offices located in ...................................................

Any delay on our part to honor this guarantee shall accrue an interest equivalent to one-year LIBOR plus a spread (spread) of 3%. The LIBOR rate shall be established by the daily Reuter Cable received in Lima at 11:00 am and interest shall accrue from the date of the request of compliance and until the effective payment date.

Our obligations under this guarantee, shall not be affected by any dispute between you and our clients. This guarantee shall be in force from ..... .................., 20... to ..... ...................., 20..., inclusive. Sincerely, Signature ……………………….. Name ………………………. Bank Entity or Insurance Company


230

ANNEX IV-A PERFORMANCE BOND OF EXECUTION OF REHABILITATION AND IMPROVEMENT

Lima, …… ..................., 201....

Messrs. Ministry of Transport and Communications Ref.: Letter of Guarantee No………….. Expiration:...................... We hereby and at the request of our customers, Messrs.................................................... (Name of legal person) (hereinafter “the CONCESSIONAIRE”) set up this joint and several, irrevocable, unconditional and automatically enforceable bond without benefit of excussion or division, up to in the amount of ........................................... in favor of the Ministry of Transport and Communications to ensure the proper and timely compliance with the execution of the Rehabilitation and Improvement in accordance with ANNEX 9 of the Bidding Terms and Conditions, the Final Engineering Studies and Environmental Management Instrument and the Concession Contract of the Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte Sahuinto/Dv. Pisco – Huaytará - Ayacucho signed between the State of the Republic of Peru and our clients. To honor this guarantee in your favor, a written notarial request will suffice by the Supervisory Board of Investment in Public Transportation Infrastructure (OSITRAN), which must be signed by the Chairman of its Board or any person duly authorized by this body. The payment will be made 24 hours following your request in our offices located in ............................................................. Any delay on our part to honor this guarantee shall accrue an interest equivalent to one-year LIBOR plus a spread (spread) of 3%. The LIBOR rate shall be established by the daily Reuter Cable received in Lima at 11:00 am and interest shall accrue from the date of the request of compliance and until the effective payment date.

Our obligations under this guarantee, shall not be affected by any dispute between you and our clients. This guarantee shall be in force from ..... .................., 201... to ..... ...................., 201..., inclusive. Sincerely, Signature ……………………….. Name ……………………….

Bank Entity or Insurance Company


231

ANNEX IV-B PERFORMANCE BOND OF EXECUTION OF INITIAL PERIODIC MAINTENANCE

Lima, …… ..................., 201....

Messrs. Ministry of Transport and Communications Ref.: Letter of Guarantee No………….. Expiration:...................... We hereby and at the request of our customers, Messrs.................................................... (Name of legal person) (Hereinafter “the CONCESSIONAIRE”) set up this joint and several, irrevocable, unconditional and automatically enforceable bond without benefit of excussion or division, up to in the amount of US$ ........................................... ( American Dollars) in favor of the Ministry of Transport and Communications to ensure the proper and timely compliance with the execution of the Initial Periodic Maintenance in accordance with ANNEX 9 of the Bidding Terms and Conditions, the Technical Files and the Concession Contract of the Longitudinal de la Sierra Highway Section 4: Huancayo-Izcuchaca-Mayocc-Ayacucho/Ayacucho-Andahuaylas-Pte Sahuinto/Dv. Pisco – Huaytará - Ayacucho, signed between the State of the Republic of Peru and our clients. To honor this guarantee in your favor, a written notarial request will suffice by the Supervisory Board of Investment in Public Transportation Infrastructure (OSITRAN), which must be signed by the Chairman of its Board or any person duly authorized by this body. The payment will be made 24 hours following your request in our offices located in ............................................................. Any delay on our part to honor this guarantee shall accrue an interest equivalent to one-year LIBOR plus a spread (spread) of 3%. The LIBOR rate shall be established by the daily Reuter Cable received in Lima at 11:00 am and interest shall accrue from the date of the request of compliance and until the effective payment date.

Our obligations under this guarantee, shall not be affected by any dispute between you and our clients. This guarantee shall be in force from ..... .................., 201... to ..... ...................., 201..., inclusive. Sincerely, Signature ……………………….. Name ……………………….

Bank Entity or Insurance Company


232

ANNEX V NOTARIAL CERTIFICATE OF THE ARTICLES OF INCORPORATION AND STATUTE OF

THE CONCESSIONAIRE


233

ANNEX VI POWER OF ATTORNEY OF THE LEGAL REPRESENTATIVE OF THE

CONCESSIONAIRE


234

ANNEX VII ECONOMIC PROPOSAL


235

ANNEX VIII VEHICLE FLOW MEASUREMENT

1. The CONCESSIONAIRE shall provide the REGULATOR, with a copy to the GRANTOR,

the reports of vehicle flow measurements, regarding toll units under this contract, whose information and schedule shall comply with the General Supervision Regulations approved by Steering Council Resolution Nº 024-2011-CD-OSITRAN or regulation replacing it.

2. The CONCESSIONAIRE shall provide the REGULATOR, with a copy to the GRANTOR, a report of audited vehicle flows, whose information and periodicity shall comply with the General Supervision Regulations, approved by Steering Council Resolution Nº 036-2004-CD-OSITRAN, or regulation replacing it.

For this purpose, the REGULATOR shall establish the terms of reference for the selection of the audit company to be contracted, being its responsibility and at the cost of the CONCESSIONAIRE to carry out the selection process to be held each year within the two first (2) months of the year to be audited.

The audit of vehicle flow shall be carried out with the purpose of, among others, verify the effective income collected by the CONCESSIONAIRE.

3. Additionally, the REGULATOR may choose, under its responsibility, to carry out an

installation in control stations and toll units, of its own vehicle count machines and equipment during the period it deems appropriate, at its own expense. For this purpose, the CONCESSIONAIRE must provide the minimum space to meet the needs of its operation and functioning.

The CONCESSIONAIRE shall use its best efforts to monitor such equipment but in no case, will be responsible for the custody, conservation, loss or damage thereto, unless it is proven that the damage is the responsibility of its staff.

CONTROL OF WEIGHTS AND VEHICLE DIMENSIONS 4. During the term of the Concession and in the Concession Area, the CONCESSIONAIRE

is responsible for fully enforcing the Regulation on Vehicle Weights and Dimensions in force. For this purpose, the following conditions are established:

a) The CONCESSIONAIRE is responsible during the entire time of the Concession for

the proper functioning of the infrastructure, weighing equipment, calibration of dynamic scales installed or to be installed, with reference to ASTM E 1318-02 Standard, Calibration Standards and Protocols for Dynamic Scales of INDECOPI and the National Vehicle Regulations in force.

b) The CONCESSIONAIRE shall make the necessary verification of vehicle weight and

dimensions, avoiding as far as possible delays and inconvenience to Users and in accordance with Applicable Laws and Regulations. For this purpose, the CONCESSIONAIRE, may supplement the Weighing System with mobile weighing units, conducting the random checks in route it deems necessary.

c) The CONCESSIONAIRE may directly request the assistance of the public force, in

order to facilitate compliance with its contractual obligations related to the management of weighing stations. In case the CONCESSIONAIRE detects any noncompliance, it shall notify the Superintendence of Land Transport for People,


236

Cargo and Merchandise (SUTRAN) and the GRANTOR. The notification shall, where possible, indicate the identification of the User and the basic data of vehicles so that SUTRAN takes the necessary measures to enforce the current regulations and rules. SUTRAN, in the exercise of its functions, shall determine noncompliance with or infractions of the regulations in force.

d) The CONCESSIONAIRE shall submit to the REGULATOR and the GRANTOR, on

a weekly basis, the database generated by the weighing system, about the occurrences regarding its operation. SUTRAN, in the exercise of its functions, shall determine noncompliance with or infractions of the regulations in force by Users in relation to the weighing stations.

e) The imposition and collection of fines and penalties to offenders of weight and size

apply only to the GRANTOR and to SUTRAN, in accordance with applicable regulations in force.

The registry of the characteristics of the traffic circulating by the Subsection shall be made.

Notwithstanding the above conditions, the REGULATOR reserves the right to make independently, any evaluation, measurement or calibration it deems appropriate, in order to verify compliance with the obligation of the CONCESSIONAIRE to enforce the Regulation on Vehicle Weights and Dimensions or regulation replacing it. For this purpose, it may use the equipment operated by the CONCESSIONAIRE, provided it does not interfere with the control activities of the latter, or with the provision of the Service.

The maintenance of the equipment for vehicle weight and dimension control and the traffic data collection systems, as well as the cost of the personnel required for its operation shall be borne by the CONCESSIONAIRE throughout the entire term of the Concession.

SPECIAL AUTHORIZATIONS 5. Special authorizations for transit of cargo whose weight, height or width exceeds the

maximum allowed by the Regulation on Vehicle Weights and Dimensions in force or regulation replacing it, are granted by the GRANTOR or the entity appointed by it.

This entity shall issue authorizations after taking note of the state of the infrastructure, the Execution Program and the traffic conditions, establishing the conditions to allow the transit of special loads. The CONCESSIONAIRE shall be informed about the authorization granted, so that the CONCESSIONAIRE carries out the weight control of vehicles, verifying compliance with the provisions of the special authorization and the conditions under which it is granted, in order that the carrier takes the necessary measures to prevent damage or deterioration of the road infrastructure and the Concession Assets and takes the necessary security measures. The cost of verification of compliance with the provisions of the authorization shall be set by the GRANTOR according to its competence. In case of noncompliance, the CONCESSIONAIRE shall inform to the competent entity for the application of sanctions that may correspond, having the right to claim the repair of damages and to take the corresponding legal actions.


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WEIGHING STATIONS

6. In the case of weighing stations, the CONCESSIONAIRE undertakes to construct and/or implement, as appropriate, the new following weighing stations: two (2) fixed double stations, three (3) semi-fixed stations and two (2) roaming (mobile) stations. The CONCESSIONAIRE shall take the necessary precautions for the construction and/or implementation of weighting stations, so upon the commissioning of any Subsection, the associated weighing station is constructed. Notwithstanding this, upon the completion of the Initial Periodic Maintenance, all Weighing Units shall be implemented, except for that associated to the Subsection where the Rehabilitation and Improvement shall be executed. These new weighing stations shall be used for an appropriate supervision of transported loads, and thus reduce roadway deterioration.

Nº Type of

weighing

Denomination Route Road Progressive/Road Control direction

1 Double

weighing

station

Huacrapuquio PE-3S Huancayo - Imperial-

Izcuchaca-Ayacucho

Km 136+52 y

137+100/La Oroya –

Huancayo -

Ayacucho

Both directions (km

136+52 direction

Ayacucho-Huancayo and

km 137+100 direction

Huancayo-Ayacucho

2 Semi-fixed

weighing

station

La Mejorada PE-3S Huancayo - Imperial-

Izcuchaca-Ayacucho

Km

205+100/Huancayo -

Ayacucho

From Huancayo to

Ayacucho

3 Roaming

weighing

station

Ayacucho I PE-3S Ayacucho – Huanta –

Huancavelica -

Huancayo

Km

14+100/Ayacucho –

Huanta -Dv.

Ayacucho – La

Quinua -

Huancavelica

From Huanta to

Ayacucho

4 Semi-fixed

weighing

station

Ayacucho II PE-3S Ayacucho –

Andahuaylas -

Abancay

Km 20+200 –

Ayacucho – Dv.

Vilcashuaman

From Andahuaylas to

Ayacucho

5 Semi-fixed

weighing

station

Chincheros PE-3S Ayacucho –

Andahuaylas -

Abancay

Km

197+100/Ayacucho -

Abancay

From Andahuaylas to

Ayacucho

6 Roaming

weighing

station

Socos PE-

28A

Punta Pejerrey – San

Clemente - Ayacucho

Km 316+700/Vía Los

Libertadores –

Localidad de Socos

From Ayacucho to Punta

Pejerrey

7 Double

weighing

station

New Name PE-

28A

San Clemente -

Ayacucho

Km 31+300/San

Clemente - Ayacucho

Both directions


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ANNEX IX PENALTIES APPLICABLE TO THE CONTRACT

Table Nº 1 Penalties referred to CHAPTER III of the Contract: Events on the Date of Signing of the Contract

Contract Clause

UIT Penalty Description Application

Criteria

3.5 i)

0.80 Delay on payment to PROINVERSIÓN, for preparatory acts for the process of delivery of the Concession.

Each Day of delay

Table Nº 2 Penalties referred to CHAPTER V of the Contract: Regime of Assets

Contract Clause

UIT Penalty Description Application

Criteria

5.20 0.80 Delay in the replacement of Concession Assets

in the maximum term indicated. Each Day of delay

5.43 3.20 Not exercising possessory defense Each time

Table Nº 3 Penalties referred to CHAPTER VI of the Contract: Execution of the Rehabilitation and Improvement and Initial Periodic Maintenance

Contract Clause

Amount Penalty Description Application

Criteria

6.10

00.03 0/0 of the sum of the budgets

contained in the Final

Engineering Studies and

Environmental Management Instrument for Rehabilitation

and Improvement.

Delay in the commencement and/or end of the execution of the Rehabilitation and Improvement.

Each Day

6.10

0.03 0/0 of the sum of the budgets

contained in the Technical Files

for the Initial Periodic

Maintenance.

Delay in the commencement and/or end of the execution of the Initial Periodic Maintenance.

Each Day

Contract Clause

UIT Penalty Description

Application Criteria

6.3 2.00

Not providing the REGULATOR, supervisor of Rehabilitation and Improvement and Initial Periodic Maintenance and team appointed by it, if applicable, with free access to the work areas to perform their work.

Each time

6.4 3.00 Delay in the submission and correction of objections of the Technical File of the Initial

Each Day of delay


239

Periodic Maintenance by the CONCESSIONAIRE

6.5 3.00

Delay in the submission and correction of objections of the Final Engineering Study and Environmental Management Instrument by the CONCESSIONAIRE

Each Day of delay

6.8 1.20

Not providing the GRANTOR or the REGULATOR with fee access to the Logbook during the execution of the Rehabilitation and Improvement and Initial Periodic Maintenance.

Each time

6.9 1.20 Not keeping a Book of Suggestions and Complaints throughout the term of the Exploitation.

Each Day of delay

6.10 2.40

Delay in the submission to the REGULATOR the Execution Program of the Rehabilitation and Improvement and Initial Periodic Maintenance.

Each Day

6.12 h), 11.2 and

11.5 1.20

Delay in the submission or renewal of the Performance Bond of Initial Periodic Maintenance.

Each Day up to a maximum of 30 Days

6.13 h) and 11.2 and 11.5

1.20 Delay in the submission or renewal of the Performance Bond of Rehabilitation and Improvement

Each Day up to a maximum of 30 Days

6.19 12.00

Noncompliance with the Applicable Laws and Regulations regarding traffic management, during the Rehabilitation and Improvement and/or the Initial Periodic Maintenance and noncompliance with the instructions determined by the REGULATOR in this regard.

Each time

6.19 3.20

Delay in the submission to the REGULATOR of a provisional traffic plan that ensures fluid traffic throughout the sector affected by the Rehabilitation and Improvement and/or the Initial Periodic Maintenance.

Each Day

6.27 1.60

Delay in the term provided to correct the objections for minor defects of the commissioning of the Rehabilitation and Improvement and/or the Initial Periodic Maintenance.

Each Day


240

Table Nº 4 Penalties referred to CHAPTER VII of the Contract: Conservation

Contract Clause



7.6 0.3 Delay in the submission of the Referential Conservation Program of the Concession.

Each Day of delay

7.9 0.20 Delay in the submission of the reports on the development of the Conservation of the Concession.

Each Day of delay

3.14, 3.15, 4.11 and 6.9 of Section 1 of ANNEX I

1.60

Detection of Poor Condition Parameters Per each Notice of noncompliance, detection of poor

condition parameter issued by the REGULATOR

4.11 of Section 1 of ANNEX I

2.40 Exceeding the term established for correction of defects.

Each day of delay

4.19 of ANNEX I

2.40 Failing to maintain the global service level of a Subsection

Each time

4.19 of ANNEX I

6.40 Noncompliance in the global service level of the Concession

Each time

Table Nº 5 Penalties referred to CHAPTER VIII of the Contract: Exploitation of the Concession

Contract Clause

UIT Penalty Description Application Criteria

8.5 a) 0.16 Delay in the submission of Reports relative to the development of the Exploitation of the Concession.

Each Day of delay

8.9 0.16 Delay in the submission to the REGULATOR of the internal regulations.

Each Day of delay

8.11 0.40 Noncompliance with the Start of the Exploitation in the established term

Each Day of delay

8.12 0.40 Noncompliance with the implementation of mandatory services.

Each Day of delay

8.12 0.20 Deficient functioning of mandatory services.

Each time

16.4o) 9.1

5.0 Collection of Rates for amounts higher than those authorized.

First verification during the term of the Concession

16.4o) 9.1

10.0 Collection of Rates for amounts higher than those authorized.

Second verification during the term of the Concession. From the third verification onwards, the penalty shall have an increase of 3% over the last penalty applied


241

9.1 b) 1.0 Delay in the commissioning of new toll units

Each Day of delay (per each unit of new toll)

7.11 of ANNEX I

1.60 Isolated congestion measurement of a TEC higher than 5 (five) minutes.

Per Notice of detection of poor condition parameter issued by the REGULATOR

7.13 of ANNEX I

3.20

Noncompliance with the modification of the Service System or of the Construction or installation of new rails within the granted terms

Per each Notice of noncompliance

Table Nº 6 Penalties referred to CHAPTER XII of the Contract: Regime of Insurance and Responsibility of the CONCESSIONAIRE

Contract Clause



12.1 3.20

Noncompliance with the obligation of submitting the insurance policies referred to in this CHAPTER.

Each Day of delay

12.5 0.80

Noncompliance with the obligation of taking out and/or renew the insurance policies related to civil liability, Construction assets, operating assets and to labor risks in accordance with CHAPTER XII of this Contract

Each time

Table Nº 7 Penalties referred to CHAPTER XIII of the Contract: Socio-environmental Considerations 1. During the execution of the Rehabilitation and Improvement, Initial Periodic Maintenance

and Exploitation of the Concession

Contract Clause


13.6 – 13.7

4.00 Noncompliance with the procedures and actions contained in the Environmental Management Instrument.

Each time

13.11

0.80

Delay in the compliance with the mitigation, compensation and follow up measures, indicated in the Socio-environmental Specifications during the execution of the Rehabilitation and Improvement, Initial Periodic Maintenance and/or Exploitation of the Concession, as appropriate.

Each Day

13.12

0.80

Delay in the compliance with the instructions given by the REGULATOR, as appropriate, on environmental regulations and considerations, established in the Socio-environmental Specifications associated to these stages.

Each Day

13.19 0.40 Noncompliance with the term of delivery of the Risks Prevention Plan for these stages.

Each Day


242

Contract Clause


13.14 0.40 Noncompliance with the term of delivery of the Accident Control Plan or Contingency Plan for these stages.

Each Day

13.17 al 13.20

0.40 Noncompliance with the terms for delivery of reports

Each Day

Table Nº 8 Penalties referred to ANNEX XI: Management Trust

Contract Clause


Appendix 2

4.00

Noncompliance in the incorporation of the Management Trust.

Each Day

Appendix 2 2.00 Noncompliance with the no transfer of resources to the Management Trust.

Each Day

Note: In case of noncompliance not foreseen in this ANNEX, the sanctions established by the REGULATOR, according to its Regulations, shall be applied.


243

ANNEX X

STUDIES

1. INITIAL PERIODIC MAINTENANCE

The Initial Periodic Maintenance shall be executed according to the Technical Files that shall be formulated by the CONCESSIONAIRE and based on the Terms of Reference contained in the Bidding Terms and Conditions. The Subsections are the following: a) Huanta – Ayacucho (Emp PE-28A) b) Km. O+000 (Ayacucho) - Abra Tocto c) Santa María de Chicmo - Andahuaylas (Emp PE-30B) d) Andahuaylas (Emp PE-30B) – Dv Kishuara (Emp PE-3SE) e) San Clemente (Emp PE-1S) – Puente Choclococha f) Puente Choclococha - Ayacucho (Emp. PE-28A) The term of submission of Technical Files is established in Clause 6.4 of the Contract.

2. REHABILITATION AND IMPROVEMENT The Rehabilitation and Improvement shall be executed according to the Final Engineering Studies and Environmental Management Instrument that the CONCESSIONAIRE shall formulate and based on the Terms of Reference contained in the Bidding Terms and Conditions. The Subsection that will be intervened is Izcuchaca – Mayoc The term of submission of the Final Engineering Study and Environmental Management Instrument is established in Clause 6.5 of the Contract.


244

ANNEX XI FINANCIAL ANNEX

Appendix 1

Financial Closure

1. To secure the execution of the Initial Periodic Maintenance and Rehabilitation and Improvement before the start of the Initial Periodic Maintenance within the period specified in Clause 6.12, e CONCESSIONAIRE shall submit for approval by the GRANTOR: (i) a notary certified copy of the financing contracts, guarantees, trusts, the rate of Cost of Debt, and in general any relevant contractual text that the CONCESSIONAIRE has agreed with Allowed Creditor(s) that will participate in the financing of this Concession, or (ii) a notary certified copy of the financing contracts, guarantees, trusts, the rate of Cost of Debt, and in general any relevant contractual text with Companies Related to the CONCESSIONAIRE. Contracts indicated in item (i) shall expressly contain a provision concerning that in case funding ceases or the CONCESSIONAIRE commits any grounds for termination, the Allowed Creditor immediately shall communicate the situation to the GRANTOR. Contracts indicated in item (ii) shall not constitute Allowed Guaranteed Indebtedness. Before the expiration of the indicated term, the CONCESSIONAIRE may request to the GRANTOR, with a copy to the REGULATOR and with the appropriate support, the extension of such term for a period not longer than six (6) months. For such purpose, and at least thirty (30) Calendar Days before the expiration of the deadline established in Clause 6.12, the CONCESSIONAIRE shall submit to the GRANTOR, with a copy to the REGULATOR, in writing and with the appropriate support, its request to extend such period. The opinion of the REGULATOR shall be sent to the GRANTOR within ten (10) Days of the receipt of the request. The decision of the GRANTOR shall be sent to the CONCESSIONAIRE within ten (10) Days from the date the opinion of the REGULATOR is received.

2. In the event that financing of the activities of the Initial Periodic Maintenance and/or

Rehabilitation and Improvement is done with the CONCESSIONAIRE own resources, it shall present the certified copy of the public deed stating the corresponding capital increase duly signed, paid and registered in the Public Registry.

3. If there is no accreditation of the financial closure on the expiration of the deadline

established in Section 1 of this Appendix, the Termination of the Concession will occur by default by the CONCESSIONAIRE and the GRANTOR shall immediately execute in compensation for damages to the State the Performance Bond of the Concession Contract for an amount equal to one hundred percent (100%) of it.


245

Appendix 2

Management Trust

1. General

In order to administer the proper and timely fulfillment of the obligations under this Contract, the CONCESSIONAIRE undertakes to establish and maintain, at its expense, as the trustor, a Management Trust, irrevocable, which is governed by the provisions in the respective Management Trust contract, which will be formulated in accordance with the terms and conditions set forth below:

a) The Management Trust will be entered with a bank or other frontline financial

institution, national or international, who shall act as trustee in accordance with Applicable Laws and Regulations, qualified and authorized by the GRANTOR upon proposal of the CONCESSIONAIRE.

b) The Management Trust, and the accounts that comprise it, shall be effective since

its establishment until the liquidation of the Trust upon the Termination of the Concession by expiration of the term. If expiration occurs before the expiry of the Concession period, the procedure established in Clause 16.21 of the Contract shall be applied.

c) Notwithstanding the above, the CONCESSIONAIRE may propose to the GRANTOR

for the draft Management Trust other provisions it deems appropriate for the bankability and proper execution of the Contract, provided they do not modify the conditions established in the Concession Contract.

d) Funds entering into the Management Trust come from the collection of the Rate, the

Co-financing and the penalties set out in ANNEX IX.

e) The CONCESSIONAIRE in its capacity as trustee must delegate expressly and irrevocably in the GRANTOR the power to issue instructions to the fiduciary, to manage the funds of the Management Trust, instructions that cannot contemplate changes in the use of funds received by Co-financing, penalties and/or rate.

f) For that purpose, on the Date of Signing of the Contract, the CONCESSIONAIRE

shall submit to the GRANTOR, with copy to the REGULATOR, a draft contract of the Management Trust, for approval.

i. The REGULATOR shall have a maximum term of seven (07) Calendar Days

alter the receipt of the draft Management Trust to issue its opinion to the GRANTOR.

ii. The GRANTOR shall issue its opinion in a maximum term of five (05) Calendar

Days, after the receipt of the REGULATOR’s opinion.

iii. In case that in such term the GRANTOR makes objections to the draft contract of Management Trust, the CONCESSIONAIRE shall correct them in a term not longer than seven (07) Calendar Days from the notification, and shall send the corrections to the GRANTOR with copy to the REGULATOR for its knowledge. In this case the GRANTOR shall have a term of five (05) Calendar Days to issue its decision.


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iv. If after the periods referred to in the previous paragraphs, as applicable, the GRANTOR has not issued an opinion, it shall obligatorily send such Trust contract project to the Ministry of Economy and Finance, according to the following paragraph.

v. The GRANTOR shall request the favorable opinion of the Ministry of Economy

and Finance for the draft of the Management Trust contract following the procedure set forth in article 66° of the Regulation of the Legislative Decree Nº 1224, approved by Supreme Decree Nº 410-2015-EF, as well as the Applicable Laws and Regulations replacing them.

vi. After obtaining the favorable opinion of the Ministry of Economy and Finance,

GRANTOR shall sign the Management Trust contract and send it to the CONCESSIONAIRE for signing and subsequent notary certification and registration in the Public Registry. The El GRANTOR shall also send a copy of the Management Trust contract to the REGULATOR.

2. Accounts of Management Trust

The Management Trust will have at least the following separated accounts:

Escrow account Periodic Maintenance account Account for Road Emergencies

a) Escrow Account

i. In this account the CONCESSIONAIRE shall deposit in national currency the entire amount of the daily revenue from the Toll, within the first three (3) Days following the completion of the collection, as well as the amounts derived from penalties. Also in that account the GRANTOR will deposit the proceeds of the Co-financing, according to what is stated in Appendix 3 of this ANNEX.

ii. From this Escrow Account payments will be disbursed according to the

instructions set out in Section 3 of this Appendix.

iii. If upon completion of the term of the Management Trust, there is a remaining balance in the escrow account, the funds will be released to the GRANTOR.

b) Periodic Maintenance Account

i. This account will aim at ensuring that part of the resources of the Escrow Account be allocated to the execution of the Periodic Maintenance by the CONCESSIONAIRE.

ii. The corresponding amount shall be deposited in this account according to the

instructions set forth in Appendix 4 of this ANNEX. iii. If upon expiration of the Term of the Contract indicated in Clause 4.1., there is a

remaining balance in the Periodic Maintenance account, funds will be released to the CONCESSIONAIRE In case of Termination of the Concession before the Deadline set out in Clause 4.1., the accrued amount in the Periodic Maintenance account shall be released to the GRANTOR.

c) Road Emergency Account


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i. The purpose of this account is to timely guarantee the availability of funds necessary to make payments that correspond to this kind of eventualities.

In this account, the following amount shall be deposited: i) from year 1 to year 5 of the Concession: 15 % of the toll collection and ii) from year 6 until the expiration of the term: 4% of the toll collection, in the same opportunities indicated in Section 2, subparagraph a) i. of this Appendix until completing the total amount of two million five hundred thousand American Dollars (US$ 2’500,000.00), which shall be maintained during the term of the Concession.

ii. Upon completion of the amount stated in the preceding paragraph, no amount from collection revenues shall be deposited in this account.

iii. If part or all of the funds in this account is used, the provision established shall

apply again until completion of the amount indicated in Section 2, subparagraph c) i.

iv. Upon completion of the Management Trust, the remnants of the Road Emergency

Account shall correspond to the GRANTOR.

3. Funds Management Mechanism The GRANTOR will instruct the trustee pursuant to the provisions of the Management Trust Contract to take the following actions with the resources of the Escrow Account:

a) Make payments to the CONCESSIONAIRE or its designee, for the duration of the

Concession, in the following opportunities and conditions:

i. Transfer from the Escrow Account to the Road Emergency Account the amount equivalent to the provision for Road Emergencies indicated in subparagraph c) of Section 2 from the accounts in the Management Trust of this Appendix.

ii. The Day Co-financing is received from the GRANTOR, transfer from the Escrow Account to the Periodic Maintenance Account, the amount corresponding to the provision of the Periodic Maintenance indicated in subparagraph b) of Section 2 from the accounts in the Management Trust of this Appendix, if applicable.

iii. Transfer from the Escrow Account to the CONCESSIONAIRE, on a six-monthly basis, the amount corresponding to the six-monthly AMPO installment in American dollars, after deducting the provision for Periodic Maintenance mentioned above.

iv. Transfer from the Escrow Account to the CONCESSIONAIRE the amount corresponding to the PRI in American dollars according to the fulfillment of the execution of the scheduled milestones, according to Section 4 subparagraph d) of Appendix 5.

v. Transfer from the Escrow Account to the CONCESSIONAIRE, on a six-monthly basis, the amount corresponding to the APIPM in American Dollars, as appropriate.

vi. 100% of APIPM shall be paid on the dates established in the last paragraph of this subparagraph, only when the MPI has been fully completed within the period specified in Clause 6.1. If the MPI has not been completed in such period, the payment dates established in the last paragraph of this subparagraph shall apply only to the FAPIPM associated to the CPIPM issued until the deadline for the completion of the MPI in accordance with Clause 6.1. FAPIPM associated to the CAMPI issued after such period shall be cancelled from the next APIPM generated after 90 Days after the completion of the MPI, and for a period of 15


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years. In case critical and/or vulnerable sectors have been identified during the execution of the MPI, the proportion to pay of the APIPM shall be as determined in Appendix 6 of this ANNEX.

vii. If a Road Emergency situation has occurred, transfer from the Road Emergency Account to the CONCESSIONAIRE the corresponding payment related to the expenses incurred according to the Clause 7.7, of the Concession Contract.

The payment of the first six-monthly installment of the AMPO, equivalent to 50% of the AMPO as provided for in Appendix 8 of this ANNEX, shall be made six months after the Date of Signing of the Contract. The dates of the subsequent payments, provided the obligation remains, shall be paid on a six-monthly basis counted from the first six-monthly installment of the AMPO.

The payment of the PRI shall be in term indicated in Section 4, subparagraph d) of Appendix 5 of ANNEX XI.

The date of the first six-monthly payment corresponding to the first APIPM shall be until 30 Calendar Days following the expiration of the deadline for the execution of the Initial Periodic Maintenance (indicated in Clause 6.1 of this Contract). The dates of the subsequent payments, provided the obligation remains, shall be paid on a six-monthly basis counted from the date of the first six-monthly payment corresponding to the first APIPM.

b) In order to make the short-term financial management of available resources in the

accounts that make up the Management Trust, the Trustee is permitted to make the investment of these resources in Certificates of Deposits of the Central Reserve Bank of Peru, or other financial instruments and/or short-term deposits with the same credit quality. To make these investments without affecting the commitments made by the GRANTOR through this Contract, the Trustee shall coordinate with the GRANTOR the projection of disbursements.

c) To release resources from the Management Trust in American dollars, for the

payment of the PRI, APIPM and AMPO, the trustee will use the exchange rate of the date of calculation of the equivalent in American dollars reported in this trust.


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Appendix 3

Co-financing

1. Payment of the concepts of PRI, APIPM and AMPO is financed with the Co-financing from

the GRANTOR and with the toll collection discounted from the Road Emergency provision, less penalties (deposited in the Escrow Account). The basic relationship is the following:

2. El GRANTOR will deposit in the Escrow Account of the Management Trust, the difference between: i) the total amount of annual obligations to pay, (PRI, APIPM and/or AMPO), as appropriate to the obligation, ii) the amount toll collected discounting the provision for Road Emergencies, and iii) the amount from penalties (deposited in the Escrow Account).

3. The procedure and opportunities for the payment of the obligations is specified in the

corresponding Appendices of this ANNEX.

4. The term for payment of the APIPM will be 15 years, according to Section 3 a) of Appendix 2 of ANNEX XI.

5. The payment of the AMPO shall be in six-monthly installments, during the term of the

Concession and while the obligation persists.

𝑪𝒐𝒇𝒊𝒏𝒂𝒏𝒄𝒊𝒂𝒎𝒊𝒆𝒏𝒕𝒐 𝒂𝒏𝒖𝒂𝒍 = 𝑷𝑹𝑴 + 𝑷𝑨𝑴𝑷𝑰 + 𝑷𝑨𝑴𝑶 − (𝑹𝒆𝒂𝒖𝒅𝒂𝒄𝒊ó𝒏 𝒅𝒆 𝑷𝒆𝒂𝒋𝒆 − 𝑷𝒓𝒐𝒗𝒊𝒔𝒊ó𝒏 𝒅𝒆 𝑬𝑽) − 𝑷𝒆𝒏𝒂𝒍𝒊𝒅𝒂𝒅𝒆𝒔


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Appendix 4

Mechanism of provision for activities of Periodic Maintenance

For the provision of funds for activities of Periodic Maintenance, the following procedure shall be observed:

1. The provision will start from the approval of the first Conservation program, as indicated in paragraph 3.4 of Section 1 of ANNEX I

2. Upon payment of the first six-monthly installment of the AMPO, the trustee of the Management Trust shall transfer from the Escrow Account to the Periodic Maintenance Account of the Trust indicated in Appendix 2: i) From Year 1 to Year 4 of the Concession: 45% of the six-monthly installment of the corresponding AMPO in accordance with Appendix 8, ii) From Year 5 to Year 9 of the Concession: 35% of the six-monthly installment of the corresponding AMPO in accordance with Appendix, and iii) From Year 10 of the Concession and up to the end of the Concession: el 20% of the six-monthly installment of the corresponding AMPO in accordance with Appendix 8, as a provision for Periodic Maintenance in order to accumulate the necessary resources to meet the payments for the concept of this obligation in charge of the CONCESSIONAIRE. The cumulative amount of such deposits, including interest that may arise, will be used to finance the Periodic Maintenance activities at the required time. The execution of the activities of Periodic Maintenance is to the account and risk of the CONCESSIONAIRE.

3. For programming purposes, execution and liquidation of the Periodic Maintenance, the following procedure is established:

a) The CONCESSIONAIRE shall request authorization to the GRANTOR, with a copy to the REGULATOR, to conduct activities under Periodic Maintenance, attaching a Technical Maintenance Report (TMR) no later than three (03) months prior to the proposed date for execution of this activity. The application must include a detailed budget of Periodic Maintenance.

b) If the GRANTOR, prior opinion of the REGULATOR, which shall give an opinion within a period of fifteen (15) Days, agrees with the budget submitted by the CONCESSIONAIRE within ten (10) Days after receipt of the REGULATOR opinion, shall authorize in writing the to the CONCESSIONAIRE to perform Periodic Maintenance activities in accordance with the Technical Maintenance Report and estimated costs by the CONCESSIONAIRE.

c) The communication from the GRANTOR shall authorize the CONCESSIONAIRE to use the resources accumulated in the Periodic Maintenance Account of the Management Trust (account balance, including accrued interest) up to the amount provided for in its budget or until exhausting the balance of the referred account. The REGULATOR shall make the appropriate supervision to the authorized Periodic Maintenance activities.

d) If the budget approved by the GRANTOR exceeds the accumulated amount in the account indicated above, the CONCESSIONAIRE shall assume the difference from its resources.

e) To modify the dates considered in the Technical Report of Maintenance approved by the GRANTOR, the same procedure as for approval shall be followed.

f) The opportunity of the indicated request shall be considered in Section 3, Conservation Programs of Section 1 of 1 of ANNEX I.


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g) In case of another opportunity, and if the request has been approved the Conservation

Program shall be updated according to Section 3.7 of Section 1 of ANNEX I.


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Appendix 5

Rehabilitation and Improvement General

a) Financial Milestone

Percentage of progress in Rehabilitation and Improvement, verified by the REGULATOR, depending on the implementation of the budget referred to in the Final Engineering Studies and Environmental Management Instrument (FES and EMI) approved.

b) Financial Milestone Progress Monthly progress in the execution of the budget included in the FES and EMI approved for the Rehabilitation and Improvement that the CONCESSIONAIRE makes according to its Execution Program and will serve to justify obtaining Milestones.

c) The CONCESSIONAIRE shall formulate the FES and EMI for Rehabilitation and

Improvement according to the terms of reference of the Bidding Terms and Conditions and based on the budget contained in the abovementioned studies shall present its Execution Program, the same that shall be formulated based on the Financial Milestones.

d) Each Financial Milestone, for purposes of this contract, is set at 10% of the total

amount of the budgets contained in the FES and EMI for Rehabilitation and Improvement, approved. The Financial Milestones may be accepted with a difference of about 5% of the value of the Financial Milestone set, which means that the Financial Milestones may vary between 9.5% and 10.5% of the total value of Rehabilitation and Improvement set in the budget of FES and EMI. The last Financial Milestone is equivalent to the difference to get 100% progress less the sum of the percentages of the previously executed Financial Milestone.

2. Each Financial Milestone shall consider at least the following:

a) The definition and programming, indicating the amount and the percentage it represents relative to the total budget of FES and EMI approved for the Rehabilitation and Improvement, which shall be affected by the factor obtained by dividing the amount offered in the bid by the CONCESSIONAIRE as payment for the Rehabilitation and Maintenance between the amount of payment for Rehabilitation and Maintenance determined in the FES and EMI. The resulting factor shall be rounded up with two (2) decimals.

b) The composition of each Financial Milestone, indicating the quantity per unit of each sub item, and the percentage that represents each Financial Milestone regarding the total of the Rehabilitation and Improvement, according to the Execution Program.

c) The valuation of each sub item with relation to the Financial Milestone shall be made according to the unit prices of the FES and EMI approved for the Rehabilitation and Improvement.

d) For scheduling Financial Milestones a detailed schedule shall be submitted, in which are defined the terms for the execution of each Milestone.

e) In case the budget of the approved FES is expressed in Soles, to determine the factor indicated in a), the Exchange Rate corresponding to the last business day before the approval of the FES shall be considered.


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3. Procedure of monthly progress valuation for the Financial Milestone a) The CONCESSIONAIRE shall submit to the REGULATOR a report of monthly

progress within the five (05) first days of the following month from which it is reported. The monthly reports shall be formulated with works progress, with the costs established in the approved FES and EMI, until the last day of the preceding month to the submission of the corresponding report, and in case of the submission of the first valuation, it shall not contain an execution term shorter than 30 days, except the last valuation.

The monthly report must indicate, among others, the percentage of progress regarding the Financial Milestone in execution with its corresponding valuation according to the entries executed based on their scheduling.

b) The REGULATOR shall have a term no later than ten (10) Days to revise said document and verify the information contained in the submitted report.

Within such term, the REGULATOR shall proceed according to the following: (i) approve the report or; (ii) request to the CONCESSIONAIRE the correction of objections.

c) In case that the REGULATOR sends objections to the report, the

CONCESSIONAIRE shall correct the objections in the term granted by the REGULATOR, term that shall have relation with the magnitude of the objections.

d) Once the objections are corrected and sent to the REGULATOR, it shall have three

(3) Days to approve the corrections to objections made. New objections cannot be made to those initially made.

e) If the REGULATOR does not approve 3 (three) cumulative monthly reports, for

causes attributable to the CONCESSIONAIRE, the latter may invoke the Termination of the Contract.

4. Procedure for the approval of the report upon the completion of a Financial Milestone

a) Upon the culmination of a Financial Milestone the CONCESSIONAIRE shall submit to the REGULATOR a report for the corresponding approval. Said report must indicate and prove that the execution of the Financial Milestone was reached, according to the monthly valuations of Financial Milestone Progress, which were approved by the REGULATOR according to indications made in the previous section and to which shall be applied the corrections resulting from the polynomial formula established in the FES and EIS.

b) The REGULATOR shall have 10 Days to make the corresponding objections. The

CONCESSIONAIRE shall have 5 Days to correct said objections. If there were no objections and/or these would have been corrected, the CONCESSIONAIRE shall submit its corresponding invoice, which shall be paid according to Section 4 subparagraph 4 d).

c) If the REGULATOR does not approve two (2) consecutive reports on the

culmination of Financial Milestone, due to causes no attributable to the CONCESSIONAIRE, the latter may invoke the Termination of the Contract.

d) Once the REGULATOR issues its conformity, it shall inform to the GRANTOR said

conformity in a term of two (2) days, within ten (10) days of the reception of said conformity, the GRANTOR shall deposit in the Escrow Account of the Management


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Trust the amount corresponding to the value of said Financial Milestone and instruct so that in the following two (2) days the corresponding transfer to the CONCESSIONAIRE for the amount corresponding to the executed Financial Milestone can be made.

e) The approval of the report of the last Financial Milestone by the REGULATOR shall

mean that the CONCESSIONAIRE has completed all the Rehabilitation and Improvement.

f) The disbursements made by the Management Trust for executed Financial

Milestones, shall be made for the concept of Payment for Rehabilitation and Improvement and the corresponding amount is an irrevocable right of collection and an obligation of the GRANTOR.

5. The CONCESSIONAIRE may request to the GRANTOR with copy to the REGULATOR

the acceptance of the Rehabilitation and Improvement for sectors of at least 9.5 % of the total length of the works, as far as it has fully concluded its responsibilities in those sectors and the work is ready to be commissioned.


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Appendix 6

APIPM

1. General

a) Financial Milestone

Percentage of progress in Initial Periodic Maintenance, verified by the REGULATOR, depending on the implementation of the budget referred to in the approved Technical Files.

b) Financial Milestone Progress

S Monthly progress in the execution of the budget included in the Technical Files approved for the Initial Periodic Maintenance that the CONCESSIONAIRE makes according to its Execution Program and will serve to justify obtaining Financial Milestones.

c) The CONCESSIONAIRE shall formulate the Technical Files according to Clause 6.4

and based on the budget contained in the abovementioned files shall present its Execution Program, the same that shall be formulated based on the Financial Milestones considered.

d) Each Financial Milestone, for purposes of this contract, is set at 10% of the total amount of the budgets contained in the Technical Files for the Initial Periodic Maintenance. The Financial Milestones may be accepted with a difference of about 5% of the value of the Financial Milestone set, which means that the Financial Milestones may vary between 9.5% and 10.5% of the total value of the Initial Periodic Maintenance set in the budget of the Technical Files. The last Financial Milestone is equivalent to the difference between the abovementioned value and the sum of previously executed Financial Milestones. In case critical and/or vulnerable sectors are identified during the execution of the Initial Periodic Maintenance, the last financial milestone shall be the total amount of the budgets contained in the Technical Files for the Initial Periodic Maintenance less i) the value of the interventions not executed, determined by the value foreseen for such interventions in the budgets contained in the Technical Files for the Initial Periodic Maintenance, due to the critical and/or vulnerable sectors identified during interventions and ii) the sum of the previously executed financial milestones.

2. Each Financial Milestone shall consider at least the following:

a) The definition and programming, indicating the amount and the percentage it represents relative to the total budget of the Technical Files for the Initial Periodic Maintenance.

b) The composition of each Financial Milestone, indicating the quantity per unit of each sub item, and the percentage that represents each Financial Milestone regarding the total of the Initial Periodic Maintenance, according to the Execution Program.

c) The valuation of each sub item with relation to the Financial Milestone shall be made according to the unit prices of the Technical File approved for the Initial Periodic Maintenance.


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3. Procedure of monthly progress valuation for the Financial Milestone

a) The CONCESSIONAIRE shall submit to the REGULATOR a report of monthly progress within the five (05) first days of the following month from which it is reported. The monthly reports shall be formulated with works progress until the last day of the preceding month to the submission of the corresponding report.

b) The monthly report must indicate, among others, the percentage of progress

regarding the Financial Milestone in execution with its corresponding valuation according to the entries executed based on their scheduling.

c) The REGULATOR shall have a term no later than ten (10) Days to revise said

document and verify the information contained in the submitted report.

d) Within such term, the REGULATOR shall proceed according to the following: (i) approve the report or; (ii) request to the CONCESSIONAIRE the correction of objections.

e) In case that the REGULATOR sends objections to the report, the

CONCESSIONAIRE shall correct the objections in the term granted by the REGULATOR, term that shall have relation with the magnitude of the objections.

f) Once the objections are solved and sent to the REGULATOR, it shall have three (3)

Days to approve the corrections to objections made. New objections cannot be made to those initially made.

With the presentation of the last monthly report for the completion of a Financial Milestone, then the CAMPI shall be issue as indicated in Appendix 7.

4. Procedure for the approval of the report upon the completion of a Milestone

a) Upon the culmination of a Financial Milestone the CONCESSIONAIRE shall submit to the REGULATOR a report for the corresponding approval. Said report must indicate and prove that the execution of the Financial Milestone was reached, according to the monthly valuations of Financial Milestone Progress, which were approved by the REGULATOR according to indications made in the previous section.

b) The CONCESSIONAIRE shall attach a summary table to the report with the monthly

valuations approved by the REGULATOR and corresponding to the respective Financial Milestone.

c) The CONCESSIONAIRE shall present a report with the accumulated valuations that

add up to the Financial Milestone. It shall send it to the REGULATOR, which shall have ten (10) Days to approve it or make the corresponding objections. The CONCESSIONAIRE shall have five (5) Days to correct such objections.

d) The approval of the report on the last Financial Milestone is subject to the

acceptance by the GRANTOR of the entire Initial Periodic Maintenance. e) For the purposes of acceptance of the Initial Periodic Maintenance the procedure

indicated in Clauses 6.23 to 6.29 shall be followed.

f) For the purposes of payment of the APIPM, the procedure indicated in Appendix 2 of this ANNEX shall be followed.


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Appendix 7

CPIPM Definition: Certificate of progress of the Initial Periodic Maintenance issued by the REGULATOR according to the terms and conditions established in this Appendix. Issuance of the CPIPM by the REGULATOR 1. To issue a CPIPM, the REGULATOR shall follow the procedure below:

a) Issuance of the CPIPM in favor of the CONCESSIONAIRE within a maximum period

of ten (10) Days of the approval of the latest report upon the completion of the Financial Milestone of the Initial Periodic Maintenance.

b) The CPIPM shall be expressed as the percentage of progress of the Initial Periodic Maintenance and shall be equivalent to the percentage of progress resulting from: i) the value of the Financial Milestone that is certifying divided by ii) the total value of the Initial Periodic Maintenance indicated in the Technical Files.

c) The issuance of the last CPIPM, corresponding to the last Financial Milestone shall be subject to the acceptance by the GRANTOR of the entire Initial Periodic Maintenance.

Rights of collection generated by the CPIPM in favor of the CONCESSIONAIRE

2. Each CPIPM issued by the REGULATOR shall assign collection rights to the CONCESSIONAIRE to fractions of the APIPM, proportional thereto, called FAPIPM. Therefore, once each CPIPM is issued, the GRANTOR shall have the irrevocable and unconditional obligation to pay the corresponding FAPIPM to the CONCESSIONAIRE. The CONCESSIONAIRE may freely transfer the collection rights once the FAPIPM has been generated. In such case, the payment obligation to the holder of the granted or transferred right shall be considered as responsibility of the CONCESSIONAIRE, for which the latter shall have the payment flows made by the GRANTOR. These operations shall be agreed in a financing trust different to the Management Trust, since the latter shall only regulate the relationship between the CONCESSIONAIRE and the GRANTOR. In this sense, such financial operations of transfer of rights made by the CONCESSIONAIRE are unenforceable against the GRANTOR.

3. Each FAPIPM shall be determined as follows:

FPAMPIj= CAMPIj*PAMPI

Where: FPAMPIj = Partial collection rights of the APIPM, corresponding to

the “j”-th CPIPM Payment of the FAPIPM to the CONCESSIONAIRE shall be made through the Management Trust.

4. Dates of payment for the FAPIPM shall be those corresponding to Section 3 subparagraph a) of Appendix 2, Management Trust.


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5. Each CPIPM shall originate thirty (30) six-monthly payments, were each six-monthly payment shall be equivalent to 50% of the corresponding FAPIPM.

6. The suspension or interruption of the Term of the Concession, as well as delays in the execution of the obligations contained in the Concession Contract are not events that enable the GRANTOR to interrupt or suspend the payment of the FAPIPM represented in the CPIPM already issued, in the time limits and procedures provided for in the Concession Contract.

7. The Termination of the Concession Contract, for any cause, shall not limit, condition or

affect under any concept the obligation of payment of the GRANTOR of the FAPIPM recognized in the CPIPM that have been issued, as well as the other conditions of the Contract necessary to make the payment. Therefore, both the Management Trust and the provisions of the Contract and its ANNEXES that may be applicable shall remain effective in order to ensure such payment.

8. Each CPIPM shall be affected by the polynomial formula of adjustment of prices of the construction established in the Technical Files for the Initial Periodic Maintenance, on the corresponding date of approval of each one of them.

Each adjusted CPIPMj shall originate a CPIPMj, measured as a percentage of the CPIPMj. The calculation expressions are the following:

Adjusted CPIPMj = CPIPMj x IAPj

CPIPMj = (Adjusted CPIPMj – CPIPMj)/CPIPMj where: IAP: Index of Adjustment of Prices, whose value (higher or lower than 1) results from

the application of the price polynomial formula on the date of update of the corresponding CPIPM. In case the prices contained in the price polynomial formula have no variation at all, the IAP shall be equal to 1. If the variation of prices is positive, the IAP will be higher than 1 (1 + Variation of Prices), and if the variation of prices is negative, the IAP will be lower than 1.

The FAPIPM shall be proportionally adjusted to the variation of the corresponding

CPIPM, resulting in a variation of the FAPIPM called FAPIPM, with the following expression:

FPAMPIj = CAMPIj x FPAMPIj x [X] Where: “X” is the adjustment factor associated to the interventions of the Initial Periodic Maintenance equal to 0.8540. Therefore

Adjusted FAPIPM = FAPIPM + FAPIPMj 9. For purposes of the control of progress of the Initial Periodic Maintenance activities,

CPIPMj shall be used. The Initial Periodic Maintenance shall be deemed completed when the sum of all CPIPMj is equivalent to 100%. The adjusted CPIPMj may add, more or less than 100%, depending on the behavior of the price index through the period of execution of the Initial Periodic Maintenance.


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In case critical and/or vulnerable sectors are identified during the execution of the Initial Periodic Maintenance, the Initial Periodic Maintenance shall be deemed completed when the sum of all the CPIPMj is equivalent to the value of the interventions of the Initial Periodic Maintenance actually executed, equivalent to the sum of the value of all the Financial Milestones divided by the total value of the budget of the Initial Periodic Maintenance established in the budget of the Technical Files. The adjusted CPIPMj may add more or less than the abovementioned percentage, depending on the behavior of the price index through the period of execution of the Initial Periodic Maintenance.

The effect of the adjusted CPIPMj is only to determine the adjusted FAPIPMj.

10. Model of CPIPM


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CERTIFICATE OF PROGRESS OF INITIAL PERIODIC MAINTENANCE (CPIPM) CPIPM Nº *****

Concession Contract for the Project “Longitudinal de la Sierra Highway Section 4: Huancayo –

Izcuchaca – Mayocc - Ayacucho/Ayacucho – Andahuaylas - Puente Sahuinto/Dv. Pisco – Huaytará - Ayacucho”

This Certificate of progress of Initial Periodic Maintenance (CPIPM) is issued in accordance with provisions of Appendix 7 of ANNEX XI of the Concession Contract for the Project “Longitudinal de la Sierra Highway Section 4: Huancayo – Izcuchaca – Mayocc - Ayacucho/Ayacucho – Andahuaylas - Puente Sahuinto/Dv. Pisco – Huaytará - Ayacucho”, signed on ____________, between the Ministry of Transport and Communications (EL GRANTOR) and the Consortium ……………………(THE CONCESSIONAIRE). Certification of the progress of the Initial Periodic Maintenance The REGULATOR certifies that the CONCESSIONAIRE has complied with the execution of part of the execution of the budget included in the Technical Files for the Initial Periodic Maintenance submitted by the CONCESSIONAIRE y approved by the GRANTOR. Therefore, it certifies that the issuance of this CPIPM represents the completion of a Financial Milestone of the referred Initial Periodic Maintenance.

Issued in Lima on *** *** *** ___________________________ THE REGULATOR

Percentage that represents the Financial Milestone in relation to the budget included in the Technical Files:

……..%

Variation of the CPIPM ( CPIPM) ……..%

Adjusted CPIPM ……..%


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Appendix 8

AMPO

1. Annual Maintenance and Operation Payment (AMPO)

For purposes of the payment of the AMPO, the procedure indicated in Appendix 2 of this ANNEX shall be followed.

The payment of the six-monthly installment of the AMPO, equivalent to 50% of the corresponding AMPO, as established in this Appendix, shall be made at the times and opportunities indicated in this ANNEX, provided the REGULATOR has not previously delivered to the GRANTOR and the latter has informed the Management Trust, an unfavorable report regarding the Service Levels. In these cases, the payment of the six-monthly installment of the AMPO shall proceed when the GRANTOR informs the Trust after the corresponding corrections have been made. In the event the delivery of the 9 Subsections that shall be intervened by the GRANTOR is made after the maximum deadlines established in Clause 5.10., a deduction shall be made from the payment of the six-monthly installment of the corresponding AMPO. The amount to be deducted is equivalent to 0.0257% of the corresponding AMPO for each kilometer-year not delivered. Such deduction shall be applied from the maximum deadline indicated in Clause 5.10. and until subsections are delivered. The resulting value of the percentage application shall be deducted from the balance of the corresponding AMPO installment, net of contributions to the Periodic Maintenance Account indicated in section 2 of Appendix 4 of ANNEX XI. The GRANTOR, with the opinion of the REGULATOR, shall determine the corresponding deductions.

2. Adjustment of the AMPO

One year after the signing of the Contract, the AMPO amount shall be annually adjusted on the last business day of January, according to the inflation resulting from the application of the formula below:

𝑃𝐴𝑀𝑂𝑎𝑗𝑢𝑠𝑡𝑎𝑑𝑜 = (0.5 × 𝑃𝐴𝑀𝑂0 ×𝐶𝑃𝐼𝑖

𝐶𝑃𝐼𝑜) + (0.5 × 𝑃𝐴𝑀𝑂0 ×

𝑇𝐶0

𝑇𝐶𝑖×

𝐼𝑃𝐶𝑖

𝐼𝑃𝐶𝑂)

Where:

𝑃𝐴𝑀𝑂𝑎𝑗𝑢𝑠𝑡𝑎𝑑𝑜 : Amount in Dollars resulting from the application of the formula.

o: Corresponds to the month of the submission of the economical proposal by

the bidders.

i: Corresponds to the available preceding month before the adjustment date of the AMPO.

CPI: Consumer Price Index of United States of America, published by the

Bureau of Labor Statistics.

IPC: Consumer Price Index of Metropolitan Lima, published by the National Institute of Statistics and Informatics (INEI)


262

TC: Exchange Rate, as established in item 1.11.87 of this contract.

In the event the first adjustment of the AMPO has not been made according to the abovementioned formula, the six-monthly AMPO installment of the Economic Proposal shall be paid.


263

ANNEX XII ACTIVATION AND CONDITIONS FOR COLLECTION AT TOLL UNITS

Toll unit Subsections associated to the Toll

Unit

Start of collection in existing Toll Units: Maximum 30 Calendar Days

from the Date of Signing of the Contract

Increase of Toll Rate in existing Toll Units and Start of collection in new Toll Units: (End of interventions by

the GRANTOR)

Increase of Toll Rate in existing Toll Units and Start of collection in new

Toll Units

Toll Requirement Toll Requirement Toll Requirement

Chacapampa (Existing)

Dv. Huancayo - Pte. Chanchas Pte. Chanchas - Huayucachi Huayucachi - Imperial Imperial - Izcuchaca

Current toll rate + VAT

Partial implementation of clause 8.12: Mechanical Assistance /Ambulance

US$ 1.50

a) Delivery of Subsections to the CONCESSIONAIRE b) Implementation of all clause 8.12

La Esmeralda (New)

Izcuchaca - Mayocc

US$ 1.50 a) Completion of R&I b) Implementation of all clause 8.12

Huanta (New)

Mayocc - Huanta Huanta - Ayacucho Km. 0+000 - Abra Tocto

a) Delivery to the CONCESSIONAIRE of Mayocc – Huanta Subsection b) Completion of IPM Huanta - Ayacucho Subsection and Km. 0+000 - Abra Tocto Subsection c) Implementation of all clause 8.12

Ocros (New)

Abra Tocto - Ocros Ocros - Chincheros

US$ 1.50

a) Delivery of Subsections to the CONCESSIONAIRE b) Implementation of all clause 8.12

Chicmo (New)

Chincheros - Santa Maria de Chicmo Santa María de Chicmo - Andahuaylas

a) Delivery to the CONCESSIONAIRE of Chincheros - Santa María de Chicmo Subsection b) Completion of IPM Santa María de Chicmo - Andahuaylas Subsection c) Implementation of all clause 8.12

Auquibamba (New)

Andahuaylas - Dv. Kishuara Dv. Kishuara - Dv. Sahuinto Dv. Sahuinto - Puente Sahuinto

a) Delivery to the CONCESSIONAIRE of Dv. Kishuara – Dv. Sahuinto y Dv. Sahuinto - Puente Sahuinto Subsection b) Completion of IPM Andahuaylas - Dv. Kishuara Subsection c) Implementation of all clause 8.12

Pacra (Existing)

San Clemente - Puente Choclococha

Current toll rate + VAT


a) Completion of IPM San Clemente - Puente Choclococha Subsection b) Implementation of all clause 8.12

Rumichaca (Existing)

Puente Choclococha-Ayacucho Current toll rate + VAT


a) Completion of IPM Puente Choclococha - Ayacucho Subsection (83.261 Kms) b) Implementation of all clause 8.12

Socos (Existing)

Puente Choclococha - Ayacucho Current toll rate + VAT


a) Completion of IPM Puente Choclococha – Ayacucho Subsection (88.805 kms) b) Implementation of all clause

LONGITUDINAL DE LA SIERRA HIGHWAY · 2018. 1. 26. · Concession Contract of the Longitudinal de la...

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