Clause reference

Comments

3.1 Expiry Date

In SA the operating term starts on the Date for Commercial Acceptance rather than the Date of Commercial Acceptance.

4.2.2 (Site conditions - Exception)

SA includes an additional option whereby a provisional sum for this work is agreed on the basis that it will be the subject of competitive tender at a downstream level.  This option may provide a better outcome where the government is unable to properly evaluate a schedule of rates proposed by bidders.

5.2.5(d) (Unidentified pre-existing contamination)

Same as clause 4.2.2 above.

9.3.1 (Nature of tenure)

SA will consider granting a lease for premises used for commercial activities (for example, a hospital café or news agency), where the grant of lease may be necessary and/or appropriate on a project-by-project basis.

9.3.4 (Government need for access)

The SA position is that where a lease of the core Facility is granted the government's rights under any sublease should be as broad as possible, so that government can deal with the Facility without the need to obtain consent from the private party (as head lessor). Limiting government's rights to access for the purpose of exercising its rights and performing its obligations under the Project Agreement may not be sufficient.

11.5.1 (Completion)

In SA pre-requisites for Completion (whether Commercial Acceptance or Technical completion) are generally limited to only those issues that are necessary for the operation of the Facility. Accordingly SA does not include all of the items set out in clause 11.5.1.

11.5.5 (Completion Certifier)

In SA an Event of Default occurs if an independent expert assesses that completion will not occur by the relevant Completion Date.

11.6.2 (Defects liability)

In SA there is an ongoing obligation to rectify defects throughout the Term instead of a finite defects liability period.

17 (Relief Events Principle)

SA distinguishes between Intervening Events (clause 17) and Relief for Construction Delays (clause 12), given that these two concepts have distinct and different regimes.

Depending on value for money considerations and the nature of the project, the SA Government may extend the contract term for Relief Events that occur during the 'D&C Phase' where these also extend the Date for Completion.

17.1(Relief Events)

In SA the Sunset Date is extended for certain Relief Events that occur during the D&C Phase where the Date for Completion is also extended.

17.1(b) (Relief Events)

SA does not adopt all of these Relief Events and may include other Relief Events, on a project-by project basis.

17.2.2(b) (Claiming Relief) and 18.2 (Threshold for Compensation)

In SA extensions of time will be awarded for a Relief Event that impacts upon a critical activity on the critical path of the Project.

19.1(b) (Calculation of compensation)

In SA fixed overheads and profit margins for the private party and its main subcontractors are added to base costs which are determined on an open book basis.

20 (Modifications)

SA includes the following minor works regime:

•  The minor works regime will be utilised by the private party to complete works that fall under a specified per event monetary threshold and which are considered to be a routine element of administering the relevant social infrastructure. All thresholds for minor works will be determined o a project-by project basis.

•  The minor works regime only applies to the operational phase of the project.

•  Minor works are seemed to be part of the Services.

•  No additional margin or other cost will be payable to the private party for the minor works.

•  The private party must cost minor works on an open book basis.

•  Minor works will not impact on risk between the private party and government. It is envisaged that minor works will generally be agreed directly between the facility operator and the facilities management subcontractor.

•  Generally any overspend of the provisional sum allowed for minor works over the operating term will be recovered directly by the facilities management subcontractor from the facility operator on an annual basis. Any annual overspend will be rolled forward to the next year. Any accumulated underspend will be payable to the State.

20.1.1 (Modifications- Right to request)

SA does not treat acceleration as a modification, as each occurrence gives rise to different entitlements. SA does not pay margins for acceleration but does pay fixed margins for modifications.

21.1.1(c) (Change in Law Definition)

SA does not agree that a Change in Law should include a change in court decisions. These decisions change binding precedents but do not change law and should not be treated as if they do. Further, as judicial opinion is open to interpretation this inclusion may give rise to unnecessary and/or unproductive dispute. This issue is further complicated by the effect of decisions on appeal.

21.1.2 (Change in –Law Exclusions)

SA does not include the words "in substantially the same form as the change eventuating after the date of the project agreement", which narrows the application of clause 21.1.2 (c).

21.2.1 (Compensation for Changes in Law)

SA does not limit compensation for general Change in Law to the Operating Phase. Accordingly, SAG agrees to pay compensation for Changes in Law during the 'D&C Phase'.

21.2.2 (Capital expenditure and hard operating cost)

In SA payment for General Changes in Law is deferred to a specified review date.

21.3.1 (Project specific changes compensable)

SA may require the Project Company to take a nominal threshold amount of risk for Project specific Change in Law on a project-by project basis.

27.5 (Transfer of senior debt obligations)

SA does not agree to any fetter of the government's right to have the senior debt obligations transferred to it on termination.

31.1.8 (Refurbishment Bond)

SA does not generally require an end of term refurbishment bond (though it reserves the right to do so on a project-by-project basis.

33.1 (Government consent)

In SA re-financing of a project that is not undertaken on a corporate finance basis does not include:

•  Any re-financing specifically contemplated at financial close and reflected in the base case financial model;

•  Disposals of investments or commitments of debt or equity in an arms length transaction at market value;

•  The syndication or subscription of any debt under the current funding agreements contemplated at financial close;

•  Subject to the funding arrangements of a particular project, a change in control or sell down of any bonds in an arms length transaction at market value;

•  Waivers and consents and similar actions that relate to day to day administrative matters.

34.1.1 (Indemnity)

The SA Government policy on limitation of liability will apply for all SA PPPs
http://www.treasury.sa.gov.au/dtf/financial_management/financial_publications_and_downloads/treasurers_instructions.jsp?