MEMORANDUMOF UNDERSTANDING BETWEEN THE MINISTRY OF AGRICULTURE, FORESTRY AND WATER MANAGEMENT OF THE REPUBLIC OF SERBIA AND METITO UTILITIES LTD. FROM THE UNITED ARAB EMIRATES IN RELATION TO DEVELOPMENT AND IMPLEMENTATION OF WATER AND WASTE WATER TREATMENT PROJECTS IN THE REPUBLIC OF SERBIA ("Off. Herald of RS - Treaties", No. 3/2019) |
THIS MEMORANDUM OF UNDERSTANDING ("MOU") is made on 26 th of February 2019.
BETWEEN:
The Ministry of Agriculture, Forestry and Water Management of the Republic of Serbia, represented by the minister, Mr. Branislav Nedimović (the "Ministry"),
and
Metito Utilities Limited (the "MUL"), a company registered in Dubai, UAE License number 604076 and commercial registration 1020491, having its head office at National Industries Park, Dubai, United Arab Emirates, represented by Chairman and CEO, Mr. Mutaz Ghandour,
(hereinafter refered to as the "Parties¨ and individually a "Party").
WHEREAS:
(1) Municipalities and cities in the Republic of Serbia (the "Serbia") face a potable water deficit and lack infrastructure in the area of water and waste water treatment,
(2) The Parties recognise the importance of securing an adequate water supply and wastewater treatment facilities in order to support Serbia’s planned growth and cater supply to its population,
(3) The Parties recognize the importance of ensuring adequate water quality to be used in irrigation systems to reduce the impact of increasingly frequent drought events and the adverse impact of climate changes on agriculture.
(4) The national legislation is in the process of harmonization with the EU legal framework, with an investments requirement in order to reach the Water framework Directive and the Urban waste water treatment Directive, for which implementation the Ministry is in charge.
(5) MUL is an international water company with considerable experience in the financing and development of major water and waste water treatment projects,
(6) Ministry, in line with the Law on Ministries ("Official gazette of the Republic of Serbia", Number 44/14 and 62/17), has a jurisdiction over: water management policy, multi purposeful usage of water, water supply and conducting the measures of water protection,
(7) The Parties believe that MUL is the best positioned to undertake the development of multiple water and waste water treatment projects in the Republic of Serbia on either a Build, Operate, and Transfer ("BOT"), or Operation & Maintenance, Engineering, Procurement, Construction and Finance ("EPCF") basis (the "Projects") pursuant to the terms set out in this MOU,
(8) The mutual relations between the Ministry and MUL are based on the Agreement on Cooperation between the Government of the Republic of Serbia and the Government of United Arab Emirates,
(9) The end beneficiaries (end recipients) of this MoU, and the intended infrastructure investment projects, are the local self-governments (LSGs) of the Republic of Serbia.
NOW IT IS HEREBY AGREED as follows:
In this MOU, unless otherwise specified:
- the masculine gender shall include the feminine and the neuter and vice versa; and
- unless the context requires otherwise, words in the singular shall include the plural and vice versa.
MUL shall, in close cooperation with the local self-government (end recipients) of the Republic of Serbia, develop selected Projects through two (2) stages as detailed below:
2.1 STAGE 1: CONCEPT PAPER AND FEASIBILITY STUDY
2.1.1 The Parties agree that MUL shall submit a concept paper that outlines a framework to address the water and waste water requirements of selected cities in the Republic of Serbia and assesses the number of plants required to cover the water and waste water requirements, which shall include an indicative tariff range (the "Concept Paper") and a Feasibility Study (as defined in Clause 2.1.3) to the Ministry no later than [4] months following the date of signature of this MOU.
2.1.2 After the signing of this MoU, MUL shall, in direct communication with selected LSGs of the Republic of Serbia, and in line with the Agreement on cooperation between the Government of the Republic of Serbia and the Government of United Arab Emirates, prepare the Concept paper and Feasibility Study, and after the approval and the adoption of them, continue towards the preparation of final project Proposal. The Ministry and MUL have a mutual understanding that the Feasibility Studies will be performed for a number of initial projects defined by a separate act and in line with this MOU, as an expression of will of the Parties, and as the Parties agree to amend from time to time (the "Selected Projects").
2.1.3 MUL shall in direct communication and cooperation with the selected LSGs, undertake a comprehensive Feasibility Study for each Selected Project and identify the most viable solution for dealing with water and waste water within the given local self-government, in accordance with the Concept Paper and the Feasibility Study. Each Feasibility Study, which is to be agreed with the LSG, shall comprise of the following activities:
a) Evaluation on technical input items to make a proposed water tariff that includes the following;
- Water supply analysis,
- Basic design of water/waste water treatment plant with ancillary facilities and distribution pipeline including selection of the optimal connectivity routing,
- Establishing a maintenance plan for the facilities.
b) Risk assessment and allocation, as well as optimal project and contractual structure, including:
- Identification of key project risks,
- Development of "risk allocation matrix" for initial discussion with the Ministry,
- Advice on key contractual framework, drafting term sheet for key project documents incorporating agreed risk allocation mechanisms.
c) Project Viability:
- Bankability Assessment,
- Affordability Assessment.
2.1.4 If the local self-government considers the Concept Paper and the Feasibility Studies satisfactory and approves their content in accordance with the timelines agreed among the Parties, MUL shall then submit a Proposal (as defined in Clause 2.2) to the LSG for adoption.
2.1.5 Should the local self-government find the content of the Concept Paper and all the Feasibility Studies unsatisfactory, MUL shall either make the necessary amendments to the Concept Paper and the Feasibility Studies which are mutually agreed between the Parties within the timelines or decide not to proceed with Stage 2.
2.2 STAGE 2: PROPOSAL
- Upon the completion and acceptance of the Concept Paper and the Feasibility Studies in Stage 1 by the local self-government, MUL shall submit to the local self-government a technical and commercial proposal for the implementation of each of the Selected Projects which shall amongst others include the following :
a) Calculation of the water tariff to be proposed with Client based on input items;
- Basic financial model,
- Local tax implication on the relevant Project level,
- Computation of water selling price,
- Cost of capital.
b) Detailed plant design and project scope of work,
c) Heads of Terms.
3. OBLIGATIONS OF THE MINISTRY AND MUL
To facilitate the commissioning of the Feasibility Study, Ministry agrees to:
3.1 Provide all necessary information and assistance to MUL in its cooperation with the end beneficiaries in order to assist MUL in the preparation and completion of the Feasibility Study.
3.2 Assist in obtaining licenses, permits and access rights necessary for the collection of raw data in connection with the Feasibility Study.
3.3 Facilitate meetings with the various municipalities and relevant officials in the Republic of Serbia.
3.4 Expedite the processes and assisting with any potential delay within its control.
3.5 Provide competent and technical support regarding the preparation of the projects in line with the present national legal framework, that is under the jurisdiction of the Ministry.
3.6 Ministry agrees that MUL shall have the right to conduct Feasibility Studies and submit Proposals for the Projects, for the time period of 18 months from the date of signing this MOU. The Ministry agrees not to enter into any discussions and agreements with any other party in respect of the Selected Projects until the expiration of this period. The Parties agree that the period can be extended. The list of projects will be defined by a separate act and in line with this MOU, as an expression of consent of both sides.
- This MOU shall become effective on the date of its signature and shall terminate on such date mutually agreed by the Parties, in writing.
- This MOU and all questions arising in connection with it are governed by the laws of the Republic of Serbia.
- All notices (which expression includes any demand, request, consent or other communication) to be given under this MOU must be:
a) in writing in the English language (or be accompanied by a properly prepared translation into English);
b) sent for the attention of the person, and to the address, or fax number, specified in this Clause (or such other address, fax number or person as may be notified in accordance with the provisions of this Clause); and
c) delivered personally; by electronic mail or sent by pre-paid first-class post, recorded delivery or registered post; or (If the notice is to be served by post outside the country from which it is sent); sent to internationally recognised courier.
- The address for service of notice are:
- in the case of Ministry, as follows:
Ministry of Agriculture, Forestry and Water Management
Republic Water Directorate, Bulevar Umetnosti 2A, 11070 Belgrade
Tel: +381 11 2013-360
Email: natasa.milic@minpolj.gov.rs
For the attention of: Natasa Milic, acting director of the Republic Water Directorate
- in the case of MUL, as follows:
Metito Utilities Limited, P.O.Box 262335, National Industries Park, Dubai-UAE
Tel: +971 4 8103333, Fax: +971 4 8103300
Email: walid.madwar@metito.com
For the attention of: Walid Madwar,V.P. Business Development, Metito Utilities Ltd.
- If a Party wishes to change its address for communication, they shall give the other/s not less than seven (7) days notice in writing of the change desired.
- This MOU constitutes the entire agreement between the Parties with respect to the subject matter of the MOU and supersedes all prior arrangements, representations, communications, negotiations and agreements (whether written or oral) made between or entered into by the Parties with respect thereto prior to the date of this MOU
- This MOU is signed in two original copies, each in Serbian and English languages, all texts being equally authentic. In case of divergence in interpretation of this MOU, the English text shall prevail.
IN WITNESS WHEREOF, this MOU has been duly signed by the Parties the day and year first written above:
On behalf of the Ministry of Agriculture, Forestry and Water Management of the Republic of Serbia |
|
On Behalf of Metito Utilities Limited |