Despite moves by central government to have the current parking meter project suspended for three months, Smart City Solutions (SCS) can still extend the lifetime of the contract to recover the time lost.
Based on the contractual terms agreed upon by SCS and the Georgetown Mayor and City Council, the company may extend the Term of the contract for any and each Force Majeure event (unforeseeable circumstance that prevents someone from fulfilling a contract) lasting more than 30 days.
This means that the contract can be extended beyond the 20 year period commencing upon the first date upon which the Concessionaire (SCS) initiated the Metered Parking Operations.
According to the contract, a Force Majeure event shall be considered to have occurred for any event beyond the reasonable control of the Concessionaire that delays, interrupts or limits the performance of the Concessionaire’s use of the Metered Parking System.
Some of the events highlighted by the contract which would be considered Force Majeure are an intervening act of God or public enemy, war, invasion, armed conflict, act of foreign enemy, blockade, revolution, act of terror, sabotage, civil commotions, interference by civil or military authorities, condemnation or confiscation of property or equipment by any Governmental Authority, nuclear or other explosion, radioactive or chemical contamination or ionizing radiation, fire, tornado, flooding, earthquake or other natural disaster, riot or other public disorder, epidemic, quarantine restriction, strike, labour dispute or other labour protest, stop-work order or injunction issued by a Governmental Authority and governmental embargo.
Additionally, under Article 17 of the contract titled ‘Indemnification’ the City shall reimburse the Concessionaire (SCS) against all liabilities, costs, expenses, damages and losses arising out of or in connection with any claim, action, motion, petition, summons, writ or other proceeding made against the Town Clerk, the Mayor and councillors of the City of Georgetown which results in the delay in the performance or frustration of the agreement.
This means that City Hall can be made to absorb the losses suffered by SCS as a result of the suspension. As it relates to taxes being charged on this indemnity, the agreement states that if such payment due from the City is subject to tax (whether by way of direct assessment or withholding at its source), the company shall be entitled to receive from the City such amounts to ensure that the net amount received, after tax, is the same as it would have been were the payment not subject to tax.
Last Friday, Minister of Communities Ronald Bulkan had ordered the suspension of the project for three months which places SCS in a position to exploit the option they have under the contract to extend it in order to recover income it would have earned save for government’s intervention.
The Communities Minister ordered the suspension, saying that the M&CC were in default of its functions with respect to the by-laws governing the project. His order was issued days after Cabinet would have requested him to advise City Hall to suspend the project. According to Minister of State Joseph Harmon on Friday, the suspension is to allow City Hall to conduct consultations with citizens and to make adjustments to the contract.
After carrying out Cabinet’s request, Town Clerk Royston King wrote the Minister informing him that the suspension would not be possible since it would result in a breach of the contract between the City and SCS.
In his letter, Royston King told Bulkan that the M&CC would not be in a position to face the legal, economic and other implications of a breach of the contract. Ultimately King had asked for more clarity on Cabinet’s recommendation to facilitate a full discussion by the Full Council of the M&CC on the issue.
As a result of the suspension order, Deputy Mayor and Acting Mayor Sherod Duncan had said via a Facebook post that under his authority as Mayor, he would be calling for an extra-ordinary meeting of the council to deliberate and decide on the matter. Based on reports, this extra-ordinary meeting will be held today in the Chambers of City Hall at 14:00hrs.
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