18.3.2  Private party's proposal

(a)  Within a defined period after government's request, the private party must give government its proposal for carrying out the requested Modification, including (without limitation) details of any effect on the works, facility or project activities, necessary capital expenditure, any impact on recurrent costs (on a fully transparent basis) and, where applicable, how the private party will fund the costs.

(b)  Government may, at its discretion, request further information, accept or reject the private party's proposal, withdraw or reduce the scope of its Modification request.

(c)  Where government rejects the private party's proposal and government still wishes to proceed with the Modification, the government may require:

(i)  the parties to consult in good faith to agree a resolution to the disputed matters during the construction period; or

(ii)  the private party to conduct a competitive tender58 during the operating period.

(d)  If the parties fail to reach agreement within a specified period of the consultation or notification of the outcome of the tender process is provided to government, then government may refer the matter for resolution in accordance with the dispute resolution procedure in Chapter 30 (Dispute resolution).

(e)  Where a proposal for carrying out the Modification is accepted by government, agreed by the parties or government wishes to proceed with a Modification pending agreement or determination of disputed matters in accordance with Chapter 30 (Dispute resolution), the private party must implement the Modification on the basis determined by government. Any necessary adjustments will be made following resolution of any matters in dispute.

(f)  If government has not exercised its right to require the private party to implement a Modification pending agreement or determination of disputed matters, then following resolution of the dispute, government may either require the private party to implement the Modification or withdraw the Modification or government may elect to implement the Modification itself at its cost..

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58  If a tender has not already be undertaken in accordance with section 18.3.1(b).