general hospital wants to purchase a new mri today its local bank is willing to lend 613233

Contractual rights to cash in termination arrangements

The facts of the SCA are as in Example 28.1 above. At the end of the term, the grantor will either pay for the infrastructure assets at their net book value, determined on the basis of the contract, or it may decide to grant a new SCA on the basis of a competitive tender, which will exclude the current operator. If the grantor elects to do the latter, the operator will be entitled to the lower of the following two amounts:

(a) the net book value of the infrastructure, determined on the basis of the contract; and

(b) the proceeds of a new competitive bidding process to acquire a new contract.

Although the operator cannot enter the competitive tender, it also has the right to enter into a new concession term but in order to do so, it must match the best tender offer made. It has to pay to the grantor the excess of the best offer (b) above the amount in (a); should the tender offer be lower than (a), it will receive an equivalent refund.