26.1.1  Circumstances

Government may assume all or some of the obligations of the private party for a period of time where:

(a)  a situation arises which in the bona fide opinion of government:

(i)  is likely to be a serious risk to the environment, a risk to the health or safety of the users of the facility or other members of the public, a risk to the structural integrity or safety of any parts of the works or the facility or a serious risk of material damage to public or private property or other specified emergency;

(ii)  in some jurisdictions, causes material disruption to the safe and secure performance of the construction works or operation of the facility;

(iii)  requires government to take immediate action to discharge or exercise a statutory duty or power. Where the service being provided is an essential service, government may be given Step-in Rights to guarantee the continuity of that essential service; or

(b)  in some jurisdictions, there has been an Event of Default.

Under the Project Contracts, the financier will recognise and acknowledge the Step-in Rights of government and the priority of government to payment of any Loss incurred by government arising from the exercise by it of the Step-in Rights.