Section 42. Contract for construction or operation

a. Every contract for
  the construction or operation of  such  road  shall  provide  by  proper
  stipulations  and covenants on the part of the city, that the city shall
  secure and assure to the contractor, so long  as  the  contractor  shall
  perform  the  stipulations of the contract, the right to construct or to
  operate the road as prescribed in the contract, free of all right, claim
  or other interference,  whether  by  injunction,  suit  for  damages  or
  otherwise,  on  the  part of the owner, abutting owner, or other person.
  The person bidding  or  contracting  for  the  construction,  equipment,
  maintenance  or  operation of the railroad included in any such contract
  shall make such deposit of cash or securities and shall give a  bond  to
  such  city, in such amount as the board of transportation shall require,
  and with sureties to be approved by such board, who shall  justify  each
  in  double  the amount of his liability upon such bond.  Such bond shall
  be a continuing security, and shall provide for the  prompt  payment  by
  such  contractor,  of  the amount of annual rental, if any, specified in
  the aforesaid contract, and also for the faithful  performance  by  such
  contractor  of  all the conditions, covenants and requirements specified
  and provided for in such contract. In lieu of such continuing bond  such
  contractor,  upon  the  approval  of  the  board  of transportation, may
  deposit with the comptroller cash equal in amount to the  entire  amount
  of  such  bond  or securities which are lawful for the investment of the
  funds of savings banks within this state and are worth not less than the
  entire amount of such bond. If such bond  shall  have  been  given  then
  after  the  deposit of cash and securities in lieu thereof as aforesaid,
  and the approval thereof by such board, such bond shall  be  surrendered
  by  the  city to the contractor duly canceled by the comptroller. In the
  event of the deposit of cash or securities as  aforesaid,  the  contract
  may  provide  for  the  payment  to the contractor of the income of such
  securities or of interest upon such moneys at a rate not higher than the
  highest rate received by the city upon the deposit  of  its  funds  with
  banks,  and  may  also provide for withdrawal of securities so deposited
  upon deposit of cash or securities of the same value, provided that  all
  such securities shall be such as are so lawful for the investment of the
  funds  of  savings banks. The board of transportation, in or by any such
  contract and in its discretion, may require, and the rapid  transit  act
  shall be deemed to have authorized the board of transportation or any of
  its  predecessors  to  have required, prior to the sixteenth day of May,
  nineteen hundred six, any other security upon any such contract.
    b. No contract entered into under authority of this chapter  shall  be
  assigned  without  the  written  consent of the board of transportation.
  Such contractor, with such written  consent  and  upon  such  terms  and
  conditions as such board shall prescribe, may either assign the whole of
  such  contract  or  separately  the  right or obligation to maintain and
  operate such road for the remainder of the term of  years  specified  in
  such  contract  and  all  rights  with  respect  to such maintenance and
  operation, or included in the leasing provisions of such  contract,  but
  subject to all the terms and conditions therein stated. The assignee, in
  and  by  such  assignment,  shall  assume  all of the obligations of the
  original contractor under or with respect to such leasing provisions and
  all  obligations  which  relate  in  any  way  to  such  operation   and
  maintenance.  Such  board  before  giving its consent shall be satisfied
  that the pecuniary responsibility of the assignee shall be no less  than
  that  of  such  original  contractor.  All of the security or securities
  which the city shall have received for the performance by  the  original
  contractor  of  such  leasing  provisions  and  of all provisions of the
  contract with respect to such operation and maintenance  shall  continue
  in  full force as provided in such contract or any modification thereof,

  as security for the performance by such assignee of all  obligations  of
  the contractor under or with respect to such leasing provisions and such
  maintenance or operation.
    c.  It shall be deemed to be part of every such contract that, in case
  the board of transportation shall cease to exist,  the  legislature  may
  provide  what  public  officer of the city shall exercise the powers and
  duties belonging to such board under or by virtue of any such  contract,
  and  that  in default of such provision, such powers and duties shall be
  deemed to be vested in the mayor of the city. Every such contract  shall
  contain  appropriate  terms,  conditions and provisions for safeguarding
  the interests of the city in the event of the failure or neglect of such
  contractor  to  construct,  equip,  maintain  or  operate  the  railroad
  according  to  the  terms of the contract, and such board may bring such
  action in the name and in behalf of the city as may be necessary for the
  sufficient and just protection of the rights of the city, or  upon  such
  terms as seem just to it, and with such person as to such board may seem
  proper,  may  make another operating contract and lease of such road for
  the residue of the term of the contractor in  default.  Such  board  may
  bring  action  in the name and on behalf of the city to recover from the
  contractor the amount due from the contractor,  less  the  amount  which
  shall  have  been  received  by the city, under or by virtue of such new
  contract, and for all other damages sustained by the city by  reason  of
  such default.