17.1.2  Overriding principles and requirements

The following overriding principles and requirements will apply when determining the amount of Compensation payable in respect of a Compensation Event:

(a)  Government must receive value for money.

(b)  the private party will not be entitled to Compensation for any indirect or consequential loss.

(c)  The private party will prepare and submit a notice of claim to government, describing and providing details of the Compensation Event (such as the impacts, time and cost consequences, savings, mitigating factors and proposed funding) as a condition precedent to its entitlement to adjustment or payment in respect of the event.

(d)  The private party must provide government with all quotations it receives in relation to the Compensation Event on an open-book basis.

(e)  Government has the right to appoint an independent expert to audit any quote or information provided by the private party (and, if appropriate, provide an alternative cost estimate). Alternatively, government may require the private party to carry out a tender process where the Compensation claimed in respect of a Compensation Event is likely to exceed a certain threshold as specified in the project agreement.

(f)  The private party is required to make a claim under its insurance policy for any damage or liability arising as a result of the Compensation Event occurring.

(g)  Reasonable costs and expenses do not include amounts payable by the construction sub-contractor to the private party (or vice versa) or a related body corporate of the construction sub-contractor or the private party to the extent that the private party, construction sub-contractor or the related body corporate is not engaged on an arm's length basis or on commercial terms.

(h)  Reasonable costs and expenses must be calculated without double counting.