Purpose and application

These principles will apply to the Commonwealth and all States/Territories (and their agencies, including, in some jurisdictions, public trading enterprises and Government Owned Corporations where applicable), so as to achieve a consistent and efficient risk allocation framework for the delivery of social infrastructure PPPs across jurisdictions.

These principles will replace existing standard commercial principle guidance material for social infrastructure projects that currently apply at a jurisdictional level. However, they will not apply retrospectively to projects that have closed, or are currently in the market.

While recognising the need for consistency across jurisdictions, governments also appreciate the need for flexibility within this framework to allow for jurisdiction-specific needs that may arise as a result of differing planning regimes, site conditions, legislative requirements, or other risks or policies.  Accordingly, in a number of areas (e.g. Relief Events, Compensation Events, Events of Default and Default Termination Events) these principles provide for a 'menu' type methodology where jurisdictions have the flexibility to choose between a number of defined approaches for dealing with a particular risk, or contractual issues, while still remaining within the overall risk framework of the principles.

For those areas which adopt a 'menu' type approach, each jurisdiction will issue supplementary guidance material for their agencies, identifying the positions that will apply to social infrastructure PPPs delivered within their jurisdiction.

As these principles are a high level guide, such supplementary guidance material may also provide further detail on the implementation of these principles within the relevant jurisdiction.

Some of the positions in these principles may differ from positions previously adopted (and with which market participants may be familiar) in social infrastructure PPPs at a jurisdictional level.  However, this has been a necessary consequence of achieving a nationally consistent and standard risk allocation framework which will provide greater certainty and assist in reducing the cost and time of contractual negotiations for all parties.  In addition, in the interests of consistency, terminology has been 'normalised' across jurisdictions (e.g. Completion vs Commercial Acceptance).  Please refer to the attached Glossary.

Given that each project has unique characteristics and risks, use of these principles will not reduce the importance of detailed project by project analysis of individual risks.  Accordingly, parties may depart from these CPs for Social Infrastructure on a project-specific basis.