4.4.6  Unidentified pre-existing contamination / latent geotechnical conditions

(a)  Government will generally not share liability for unidentified pre-existing contamination or latent geotechnical conditions where the site has been selected by the private party;

(b)  Government may share risk in respect of unidentified pre-existing contamination and latent geotechnical conditions on a High Risk Site if the contamination or condition is located in an area of the site which is inaccessible during the tender period to the private party's consultants and/or to any independent consultants engaged by government, or in respect of which it is otherwise not reasonable or practical to expect the private party to perform its own full investigative surveys;

(c)  to be eligible to receive any Relief or Compensation for unidentified pre-existing contamination or latent geotechnical conditions on a High Risk Site, the private party must have promptly notified government of the existence of the contamination or latent geotechnical condition within an agreed period of becoming aware of it (to be determined on a project specific basis);

(d)  to the extent government agrees to share unidentified pre-existing contamination or latent geotechnical conditions risk on a High Risk Site, it may do so by agreeing at contractual close a protocol for sharing this risk. For example, by:

(i)  reference to an agreed schedule of rates for specified eventualities13 (with the private party bearing the risk of costing the unit price);14 or

(ii)  sharing (on a percentage basis to be agreed) the actual costs of remediation for items and eventualities not covered by the schedule or where a schedule of rates is not used.

(e)  in circumstances where government shares pre-existing contamination or latent geotechnical condition risk on a High Risk Site on a percentage basis, it will consider circumstances such as the following when determining an appropriate percentage share:

(i)  the comprehensiveness of site assessment undertaken by qualified environmental consultants commissioned by government prior to contractual close; and

(ii)  the ability of the private party to undertake due diligence of the site assessment report commissioned by government and/or ability to undertake its own testing (where feasible);

(f)  this cost-sharing arrangement is preferable to government capping the private party's liability in that it provides an incentive for efficient environmental management of the site and cost-effective clean up at all stages of the project, while significantly limiting the private party's exposure; and

(g)  upon becoming aware of the existence of any unidentified pre-existing contamination, the private party must consult with government on the best way to manage and limit any effects and undertake all reasonable and proper remediation steps necessary to manage and clean up the contamination and any effects arising from it in a timely and cost effective way.

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13 The schedule of rates will be bid by the private party and will generally cover variable costs within the private party's control (e.g. labour, cranage and truck movements).

14 To the extent it would not be value for money for certain components of that cost (e.g. landfill charges) to be priced up-front in a schedule of rates, a competitive process will be agreed as part of the project agreement for pricing these components at the time relief is requested.