The purpose of the Base Payment is to provide a payment for the service that varies with the tonnages of Contract Waste accepted by the Contractor per Contract Year after the Service Commencement Date relating to the facility. If Contract Waste is not accepted by the Contractor then the Base Payment should be withheld and Non Acceptance Deductions may apply (See Section 2.5). Accordingly, the risk of the facility not being able to accept and/or process the Contract Waste after the Service Commencement Date lies with the Contractor.
In calibrating the Base Payment, the Authority should be aware of the Contractor's need to be able to meets its debt service obligations at all tonnages of Contract Waste between the contractual minimum and maximum.
Where the Contractor's costs are higher because it sends more Contract Waste to landfill than expected, the Base Payment should not change to reflect this. However, there may be a need for a payment to reflect higher than anticipated landfill tax rates, see Section 2.8.