14.1  Revenue

The regime under which the private party can charge third parties for the use of the facility must be designed having taken into account value for money for users of the facility.

The private party's ability to charge third parties (e.g. levy tolls, user charges and other fees) may be prescribed and constrained by the project agreement. For example, in relation to a tollroad, the project agreement will set out:

(a)  that tolls can only be charged by the private party once there is a fully operational facility, which provides a strong commercial incentive to complete construction by the Date for Completion or earlier;

(b)  the base tolls for different categories of vehicles (e.g. cars, motorcycles, light commercial vehicles and heavy commercial vehicles);

(c)  whether there are different tolls specified for different tollable sections;

(d)  whether there are to be time based tolls;

(e)  the level of GST applicable;

(f)  the method for escalation of the tolls, user charges and fees (e.g. the escalation for tolls may be based on quarterly or annual increases in CPI)

In other projects the user charges may be set according to market rates or according to determinations made by regulatory authorities.

The private party and its associated entities may be restricted in deriving revenue from only those prescribed sources. All alternate sources of revenue/returns must first be approved by the government.