| (1) | The Contracting authorities must take steps within the prescribed period and in the prescribed manner before expiry of contracts contemplated in subsection (2)(a), (b) or (c) to put arrangements in place for the services to be put out to tender so that the services can continue without interruption. |
| (a) | a negotiated contract concluded under section 41; |
| (b) | a subsidized service contract concluded under this section; or |
or any extension thereof, the relevant services may continue to be subsidized, this must be done in terms of a subsidized service contract concluded in terms of this section.
| (3) | Where a contract referred to in subsection (2)(a), (b) or (c) has expired and no arrangements have been put in place to put the services out to tender, or such arrangements are unsatisfactory or inadequate in the Minister's opinion, the Minister must forthwith enter into negotiations with the contracting authorities, the National Treasury and the Auditor-General with a view to ensuring compliance with this Act and legislation on financial and procurement issues. |
| (4) | Only a contracting authority may enter into a subsidized service contract with an operator, and only if the services to be operated in terms thereof, have been put out to public tendering and awarded by the entering into of a contract in accordance with prescribed procedures in accordance with other applicable national or provincial laws. |
| (5) | The validity period of a subsidized service contract must not exceed seven years. |
| (6) | The Minister may, in consultation with the MECs— |
| (a) | prescribe requirements for tender and contract documents to be used for subsidized service contracts which must be binding on contracting authorities, unless the Minister agrees that an authority may deviate from the requirements in a specific case; and |
| (b) | provide model tender and contract documents, and publish them in the Gazette, for subsidized service contracts as a requirement for contracting authorities, who may not deviate from the model tender and contract documents, unless this is agreed to in writing by the Minister, but those documents may differ for different authorities or situations. |
| (8) | The model tender and contract documents published in terms of the Transition Act shall cease to apply as from the date of commencement of this Act. |
