Parking rates to be cut by 50% - Mayor
– upbraids Duncan at statutory meeting – accuses him of peddling misinformation
Mayor yesterday announced plans to slash parking rates by 50%.
At a meeting yesterday with members of the commercial banking community, Chase-Green said the rates would possibly be reduced to a rate of $28 VAT inclusive for 15 minutes or just over $100 per hour.
She said too that discussions are ongoing to allow drivers to use purchased time at any parking space in the city.
At present, the contract between Smart City Solutions (SCS) and the Mayor and City Council provides for paid parking at a rate of $50 plus VAT for 15 minutes of parking or over $200 per hour. Drivers are also only able to use purchased time at the parking space identified on the ticket.
The Mayor made no announcements in relation to the fees for violations, but they are, however, expected to also be reduced by 50%. These include a $8,000 immobilisation (booting) fee, a $12,000 towing fee; a $7,000 impoundment fee and a $7,000 storage fee for every elapsed period of 24 hours a vehicle is impounded, all of which attract VAT.
Following a public outcry after implementation of the parking system, as well as a boycott by drivers and a protest organised by the Movement Against Parking Meters (MAPM), President David Granger met with Mayor Chase-Green and Town Clerk Royston King last Wednesday to discuss possible solutions to the standoff between the citizens and the city. It was decided at this meeting that all penalties attached to the metered parking project would be suspended, while a new fee structure was negotiated.
In the interim, the city has been conducting stakeholder consultations, to which it has invited all groups.
In response to the invitation, the MAPM has invited the Mayor to a Town Hall-style meeting where she could address all citizens who wished to be present. The Mayor has indicated that she will accept this invitation.
The MAPM, which has organised protests that have attracted huge numbers, has so far said the planned reduction is not enough and has called instead for a revocation of the contract between contractor SCS and City Hall.
According to the MAPM, the review of the contract conducted by the Ministry of Finance noted that local procurement laws may have been infringed in granting the contracting to SCS, so it must be revoked.
A copy of the original contract has over the last few days been circulating on social media with many commentators placing heavy focus on the 49 years granted to the concessionaire as well as an indemnity clause which holds the city liable for any losses incurred through its
unilateral termination of the contract. This clause, which the Attorney General’s review of the contract referred to as a “terror clause,” stated that “if the city unilaterally terminates the agreement, it would be bound to pay the concessionaire a lump sum payment equivalent to (i) the total direct and indirect, hard and soft cost cumulative gross investment of the concessionaire in the project; plus (ii) an amount equal to 25% of the direct and indirect hard and soft cost cumulative gross investment of the concessionaire in the project; multiplied by the number of years (or fraction) remaining under the term…(iii) the reasonable out of pocket and documented costs and expenses incurred by the concessionaire as a direct result of such termination.”
All of these terms have since been amended with the contract term having been reduced to 20 years, with an option for a 20-year renewal subject to the approval of the council and the indemnity sum having been reduced from 25% to 15%.
SCS defends terms of contract
SCS, in a press release issued yesterday, specifically defended these terms, while noting that according to the World Bank, “A concession is typically for a period of 25 to 30 years.”
It added that further sources, such as the US Department of Transportation, cite in reference to the longevity of concession terms that the term for highway projects have extended beyond 30 years and up to 99 years.
In defending the indemnity clause, SCS states that “the necessity of such a termination clause becomes all the more apparent when considering that it protects specifically against a scenario whereby the M&CC could unilaterally terminate for convenience even after the company has taken all the risk and contributed all the investment in delivering upon its required platform features and operating standards.”
It explained that the company’s platform obligations include multi-space solar-powered parking equipment, backup batteries, integrated communications with regularly updated performance data and login access to the city, road signs, a call centre, an integrated enforcement platform and payment and distribution platform, and maintaining all the platforms, not only for wear and tear but for any acts of vandalism, accidents and any required improvements.
It further argued that research of comparable projects demonstrates that the termination clause of the Georgetown metered parking contract “is well within, and even quite modest, as compared to market practice.”
SCS cited a report, entitled Termination and Force Majeure Provisions in Private Public Partnership (PPP) Contracts, Review of Current European Practice and Guidance, which states that “compensation for Authority default or voluntary termination is often defined by reference to the financing raised for the PPP project. Before committing to invest equity (e.g. share capital or shareholder loans in/to the Private Partner), investors will seek assurances that they will be made whole in the event of early termination of the PPP contract where the Private Partner is not at fault. Keeping equity investors whole entails paying appropriate compensation so that they are neither better off nor worse off than if the PPP contract had not been terminated.”
The report, published in March, 2012, is a publication of the European PPP Expertise Centre (EPEC), a joint initiative involving the European Investment Bank (EIB), the European Commission, Member States of the European Union, Candidate States and other states.
Even as it defended the terms of the contract, SCS stated that it and the M&CC have both agreed “for very sound competitive and commercial reasons, to confidentiality clauses in the contract which are subject to consent by both parties prior to any disclosure of the contract.”
As a consequence of this agreement, “aside from substance or comment on the contract itself, anyone’s publication of the contract has violated the confidentiality clauses of the contract itself and means, in effect, that the possession of the contract by anyone not so authorized represents misappropriation, and certainly that public dissemination of the contract triggers legal implications resulting from any such misappropriation.”