The Contractor will require waste from the Authority to allow it to undertake the commissioning process. From the point in time that the Authority starts to send waste to the facility (i.e. following the issue of the Readiness Test Certificate) there should be a payment by the Authority. The duration of the commissioning period varies significantly between technologies and this should be taken into account when developing the Commissioning Payment regime. In all cases the regime should be kept as simple as possible.
It is important that the level of service, the payment arrangements and the deduction applying in this period are set out clearly in the Contract.
The level of service should be defined in the Commissioning Requirement set out in the Output Specification.
The payment per tonne due in the commissioning period should be defined by reference to the Base Payment but should be subject to a Ramp Up factor. The Ramp Up factor should be calibrated so that the payment to the Contractor reflects the operating cost incurred and is no higher than the avoided cost of landfill. As the full Base Payment is not being paid the Diversion Performance Deduction, Non Acceptance Deduction and Mileage Deduction regimes should not apply.
Performance Standards should be reviewed on a case by case basis to decide whether they apply during this period.
During the commissioning period, it is critical that the Contractor has a strong incentive to fully commission the facility and to perform in accordance with the
Output Specification. In making an assessment of the appropriateness of the Ramp Up factors bid by the Contractor, the Authority should consider the profitability and returns of the Contractor during the commissioning period.
The payment per tonne due during the commissioning period is calculated by reference to the Base Payment but the full Base Payment itself should only be payable when the facility achieves its Acceptance Test Certificate. Where there are multiple facilities, the Ramp Up factor should be structured to allow for increments to the payment each time a new facility achieves its Acceptance Test Certificate. The increments should reflect the capital expenditure of each facility.
The Contract must specify what happens if the Contractor is able to provide the full service earlier than the expected completion of the build or investment phase. The Authority should not be obliged to make any payment of the Unitary Charge before the expected date of commissioning unless it has agreed to accept earlier commencement. In agreeing any early commencement, the Authority will need to consider whether it is practical and affordable.