18.3.5  Modifications adversely impacting on revenue earning capacity

Government may request a Modification resulting from public policy decisions which may impact upon the use or patronage of the facility on the private party's ability to earn revenue. For example, in the case of tollroad projects, this may involve amendments to the existing tolling structure or the implementation of physical solutions such as introduction of high occupancy tolling lanes or capacity enhancements, such as widening.

Within a period set out in the project agreement, the private party must give government its proposal for carrying out the requested Modification. The proposal should address the matters set out in section 18.3.2(a) as well as the effect on revenue.

The government request should not result in the private party being in a better or worse position than prior to the policy change. In broad terms, the principles to effect a neutral position for the private party will be based on those outlined in Chapter 15 (Relief for possible Key Risk Events).