Type of Risk

Risk Retained by the Service

Risk Transferred to CONSUL

Risk shared between the Service and CONSUL

Comments

Planning and Building Regulations

At date of contract signature, the Service was only obliged to procure outline planning permission. Consul was responsible for obtaining and satisfying all other planning consents, together with any other licences or statutory approvals that were required.

Design

Consul bear all aspects of design risk, other than changes in design due to a change of specification approved by the Service or a material change in government policy in relation to the administration of justice in Northern Ireland which increases the cost of the works.

Construction

Consul to bear all of the risks associated with the construction process. These include:

  Ground conditions

  Time/cost overruns (except in the case of delay events and any changes approved by the Service)

  Archaeological artefacts and antiquities

  Site safety

  Damage to neighbouring property

  Injury to persons

  Pollution

  Labour dispute

  Environmental Contamination

  Defective work and materials

Financial

The Service bears some financial risk since the Service Charge payable to Consul may rise following a benchmarking or market testing exercise. However, only 25% of any cost increase due to market testing is payable by the Service. The same cost share basis is assumed for cost reductions.

Demand /Volume

The Unitary Service Charge does not vary in accordance with court usage patterns. When the courtrooms are available for use the Service is required to pay the full USC regardless of whether the courts have been used.

Availability

The availability element of the Unitary Service Charge is payable to Consul provided that the facilities are available for occupation and use by the Service. Where the facilities are not available (for reasons other than Force Majeure, Terrorist Incident or default by the Service), the availability payment is abated in accordance with an agreed schedule. Persistent failure to make the facilities available, subject to the Funder's step-in rights, entitle the Service to terminate the concession. As a result, availability risk is predominately borne by Consul, however, because the availability element is subject to a maximum abatement of 55%, the Service retains a material element of the risk.

Service Provision

The service payment is that element of the Unitary Service Charge for facilities management services which Consul is required to provide. The payment is subject to abatement where Consul fails to provide the service to the required standards. The Concession Agreement also gives the Service the right to terminate any or all of the services where performance falls short of a prescribed standard. As with the availability element, the permitted abatement is limited, in this case to 30% of the service payment.

Change of Law

Costs and delays arising from a discriminatory change of law are borne by the Service. This covers a change in law that discriminates against the operation of courtroom facilities, projects under PFI or similar schemes, or Consul or similar facilities management companies.

For general changes in law, Consul will assume the costs in connection with such changes up to a maximum sum of £434,000 over the length of the Concession Period. The Service will be responsible for any residual costs thereafter.