1.1 Payment for Project Development Partnering Services shall be by Project Development Fees. The process for calculating and payment of such Project Development Fees in relation to:
1.1.1 Qualifying Projects; and
1.1.2 any other Projects in respect of which a Project Service Provider is to provide the relevant Project Services and which hubco and a Relevant Participant have agreed is to be subject to the approval process set out in Schedule Part 5 (Approval Process for New Projects),
is set out in this paragraph 1. For other Projects, the relevant Participant and hubco shall agree an appropriate Project Development Fee and mechanic of payment.
1.2 A proposed capped development fee for each proposed New Project (broken down for the entire New Project Approval Process, each stage of the New Project Approval Process and for each relevant component of the Project Development Partnering Services as specified in proforma 2 within the Pricing Data) must be submitted by hubco as part of the Stage 1 Submission and, once that New Project achieves Stage 1 Approval, such fee shall, subject to paragraph 1.3 and paragraph 1.4 below and paragraph 4.7 of Schedule Part 6 (New Project Pricing Report), be the Project Development Fee for that New Project. The Project Development Fee submitted as part of the Stage 1 Submission shall be determined as follows (without any double counting or double recovery between Stages):
1.2.1 subject to paragraph 1.2.2, the fee shall comprise the Partnering Services Costs associated with the provision of the Project Development Partnering Services relative to the New Project, to cover taking the proposed New Project through each stage of the New Project Approval Process (split between Stage 1 Approval and Stage 2 Approval) (for example, design costs, finance and legal advice, technical advice, planning costs, surveys (excluding surveys specified in paragraph 4.2.4(b) to (f) of Schedule Part 5 (Approval Process for New Projects)) and costs associated with compliance with the requirements of Schedule Part 6 (New Project Pricing Report) in respect of the New Project) to financial close or contract award;
1.2.2 save to the extent adjustments are required and agreed between the Parties to give effect to Clause 19.1, the Project Development Fee for each element or component of the Project Development Partnering Services, for each stage of the New Project Approval process and in respect of the New Project as a whole, can in no circumstances exceed the relevant Project Development Fee Cap;
1.2.3 these costs will be computed based on hubco's estimate of the time involved in taking the New Project through to contract completion and execution (including time spent by hubco's own staff), applying the Partnering Services Cost Rates or alternative basis as referred to in paragraph 1.3;
1.2.4 these costs may include:
(a) costs reasonably and properly incurred by hubco in doing work which would otherwise have been required for a Stage 1 Approval in advance of issue by the Relevant Participant(s) of a New Project Request, where such work was done "at risk" by hubco with the express agreement of the Relevant Participant(s) on the understanding such work would be captured pursuant to this paragraph 1.2.4 should a Stage 1 Approval be given for the New Project in question; and/or
(b) with the agreement of the Relevant Participant, costs reasonably and properly incurred by hubco in relation to a New Project in relation to which a Stage 1 Submission has been submitted but which did not receive Stage 1 Approval (other than for reasons related to hubco's failure to meet the requirements of this Agreement) (such consent not to be unreasonably withheld or delayed where the costs incurred relate to a previous attempt to obtain Stage 1 Approval for the New Project for which Stage 1 Approval is being sought); and
1.2.5 hubco shall not be entitled to include or recover any Non Scheduled Costs as part of any Project Development Fee or Incurred Project Development Fee where such costs have not been agreed or market tested in accordance with Section 4 (Partnering Services Costs Rates) of Schedule Part 3 (Partnering Services).
1.3 The actual costs for providing the Project Development Partnering Services shall be calculated utilising the Partnering Services Costs rates specified in Section 4 (Partnering Services Costs Rates) of Schedule Part 3 (Partnering Services) or, where more beneficial to the Relevant Participant(s), on any alternative basis (such as fixed prices or volume discounts) agreed between hubco and the relevant Supply Chain Member and approved by the Relevant Participant for this purpose. In the case of an Approved Project, the costs should include (as a fixed sum) those costs anticipated to be properly and reasonably incurred in achieving financial close or contract award.
1.4 Within twenty (20) Business Days of a New Project achieving Stage 1 Approval and then after it becomes an Approved Project, hubco shall notify the Relevant Participant(s) of the actual costs (calculated on the basis specified in paragraph 1.3 above) of providing the Project Development Partnering Services in respect of that New Project properly and reasonably incurred by hubco in obtaining such approvals (and, in the case of an Approved Project, anticipated to be properly and reasonably incurred in achieving financial close or contract award). hubco shall provide all necessary supporting information (including timesheets, invoices and the like) necessary to substantiate the levels of costs incurred (or anticipated to be incurred as aforesaid).
1.5 The Relevant Participant(s) and hubco shall seek to agree the costs to be paid within twenty (20) Business Days of hubco's notification, failing which hubco or the Relevant Participant(s) shall be entitled to refer the matter for consideration under the Dispute Resolution Procedure. Where such costs as agreed or determined are lower than the estimate for the relevant stage provided pursuant to paragraph 1.2 above, the Project Development Fee will be reduced accordingly. There shall be no increase to the Project Development Fee in the event that the agreed or determined actual costs exceed the estimate provided unless previously agreed by the Relevant Participant(s).
1.6 Subject to paragraphs 1.7 and 1.8, recovery of the full Project Development Fee is dependent on the relevant New Project becoming an Approved Project and a Project Agreement being entered into in relation to that Approved Project in which case hubco shall:
1.6.1 in DBFM Projects, charge an amount equivalent to the Project Development Fee (under deduction of any sums paid under paragraph 1.7) as a lump sum to the Project Service Provider entering into the relevant Project Agreement and that Project Service Provider shall, in turn, recover such amount through the amounts to be paid to the Project Service Provider under the Project Agreement; and
1.6.2 for Approved Projects other than as referred to in paragraph 1.6.1, recover the Project Development Fee (under deduction of any sums paid under paragraph 1.7) in accordance with the terms of the relevant Project Agreement.
1.7 The Relevant Participant(s) shall pay hubco that part of the Project Development Fee in respect of a New Project which has obtained Stage 1 Approval that relates to the costs incurred in obtaining such Stage 1 Approval within thirty (30) Business Days of agreement by the Relevant Participant(s) to the costs specified in paragraph 1.3 relative to such Stage 1 Approval.
1.8 hubco shall be entitled to reimbursement of the Incurred Project Development Fee in the circumstances referred to in paragraphs 4.8.2, 4.8.3, 5.9.1(a), 5.9.2(a) 6.1.2(a), 6.2 and 7 of Schedule Part 5 (Approval Process for New Projects) and/or (but without double counting or double recovery) as part of the Participant Event of Default Compensation Sum and/or Participant Event of Default Termination Sum.
1.9 The "Incurred Project Development Fee" is, in respect of each New Project, the actual development costs as referred to in paragraph 1.2.1 (calculated on the basis specified in paragraph 1.3 above) properly and reasonably incurred by hubco as at the relevant date in seeking to develop a Stage 1 Submission and/or Stage 2 Submission (and which hubco is not already entitled to be paid pursuant to paragraph 1.7), but in no circumstances shall the Incurred Project Development Fee for:
1.9.1 a specific element or component of the Project Development Partnering Services exceed the Project Development Fee for that element or component;
1.9.2 a stage of the New Project Approval Process in respect of a New Project exceed the Project Development Fee for that stage; or
1.9.3 a New Project exceed the Project Development Fee for that New Project set out in the Stage 1 Submission.