1.1 On the Expiry Date, each element of the Facilities shall be in a condition which is:
1.1.1 consistent with due performance by Project Co of the Service Level Specification and Method Statement for the [Facilities Service]; and 221
1.1.2 consistent with the Facilities and each of the elements of them having been designed and constructed in accordance with the applicable design life requirements set out in paragraph [ ] of the Board's Construction Requirements,
together referred to as (the "Handback Requirements").
1.2 Not less than [ ] prior to the Expiry Date, Project Co and the Board's Representative shall conduct a joint inspection of the Facilities.222
1.3 Within [ ] Business Days after the completion of the inspection, if it is found that any element of the Facilities is not in a condition consistent with the Handback Requirements, Project Co shall forthwith provide to the Board Representative's in accordance with Part 10 of the Schedule (Review Procedure):
1.3.1 Project Co's proposal as to the maintenance works (if any) (the "Handback Works") required to be carried out in respect of the Facilities in order to procure that they will, on the Expiry Date, satisfy the Handback Requirements;
1.3.2 Project Co's proposal as to the programme (the "Handback Programme") for the carrying out of the Handback Works over the remainder of the Project Term, such programme shall describe the total works to be carried out and the method of carrying out such works during the overall period in which the Handback Works are to be executed; and
1.3.3 Project Co's estimate of the cost of carrying out the Handback Works (the "Handback Amount").
2. The Board's Representative may, within [ ] Business Days after receipt of the details set out in paragraph 1.3 from Project Co, raise comments in accordance with paragraph 3 of Part 10 of the Schedule (Review Procedure) on Project Co's proposals and estimate referred to in paragraph 1 above.
3.1 On agreement, or determination in accordance with Part 26 of the Schedule (Dispute Resolution Procedure), of the Handback Works, the Handback Programme and/or the Handback Amount (as the case may be), Project Co shall procure that the Handback Works are carried out in accordance with the Handback Programme. Project Co shall carry out the Handback Works at its own cost notwithstanding that the actual cost of the Handback Works may be higher than the Handback Amount.
3.2 Project Co shall within [ ] Business Days of the agreement (or determination in accordance with Part 26 of the Schedule (Dispute Resolution Procedure)) envisaged in paragraph 3.1, procure the provision of a bond (the "Handback Bond") in favour of the Board for an amount equal to the Handback Amount from a bank or insurance company authorised to carry out business in the United Kingdom. 223
3.3 Project Co shall carry out the Handback Works to the satisfaction of the Board's Representative in accordance with Good Industry Practice and in accordance with the Handback Programme so as to meet the Handback Requirements.
3.4 Notwithstanding:
(a) the agreement of the Board's Representative to any Handback Works, the Handback Programme or the Handback Amount;
(b) the participation of the Board's Representative in any inspection under this Schedule; and/or
(c) the complete or partial carrying out of the Handback Works,
Project Co shall not be relieved or absolved from any obligation to conduct any other inspection or to perform any other works in accordance with the Service Level Specification and Method Statement for the [describe relevant facilities service].
4.1 Not later than [ ] Business Days before the Expiry Date, Project Co and the Board's Representative shall conduct a joint inspection of the Facilities. Such inspection shall confirm whether or not the condition of the Facilities is in accordance with paragraph 1 above.
4.2 On, or within [ ] Business Days after, the Expiry Date, the Board's Representative shall either:
(a) issue to Project Co a Handback Certificate and return the Handback Bond to Project Co; or
(b) notify Project Co of its decision not to issue the Handback Certificate stating the reasons for such decision.
4.3 Any notice given by the Board's Representative in accordance with paragraph 4.2(b) shall set out each respect in which the Handback Works have not been completed or the Facilities do not comply with the Handback Requirements and shall state the Board Representative's estimate of the cost of procuring that the Facilities comply in all respects with the Handback Requirements.
4.4 Project Co may, within [ ] Business Days after receipt of the notice given in accordance with paragraph 4.2(b) by notice to the Board's Representative, object to any matter set out in the Board Representative's notice. The notice from Project Co shall give details of the grounds of such objection and shall set out Project Co's proposals in respect of such matters.
4.5 If no agreement is reached between Project Co and the Board's Representative as to any matter referred to in Project Co's notice given in accordance with paragraph 4.4 within [ ] Business Days of receipt of that notice by the Board's Representative, then either Project Co or the Board's Representative may refer the matter for determination in accordance with Part 26 of the Schedule (Dispute Resolution Procedure) as to:
(a) whether the Facilities comply in all respects with the Handback Requirements; and
(b) the estimated cost of procuring that the Facilities comply in all respects with the Handback Requirements, where the Facilities do not comply in all respects with the Handback Requirements.
5. If it is agreed or determined in accordance with Part 26 of the Schedule (Dispute Resolution Procedure) that the Facilities did not, at the Expiry Date, comply in all respects with the Handback Requirements, Project Co shall pay to the Board an amount equal to the estimated cost of completing such Handback Works or procuring that the Facilities comply in all respects with the Handback Requirements. Such payment shall be made not later than [ ] Business Days after the estimated cost has been agreed or determined and, upon such payment being received by the Board, the Board's Representative shall issue the Handback Certificate and return the Handback Bond to Project Co.
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221 Boards should ensure that their handback requirements are clearly set out in the BCRs, or alternatively in this schedule. As well as complying with the residual design life requirement, as a minimum, all components of the Physical Facet (as described in Estatecode (ISBN 0-11-322549-0)) should (subject to the point made below) meet Condition B (i.e. be sound, operationally safe and exhibit only minor deterioration (as is more fully described in Estatecode Section 4 "Facet 1: Physical condition")). Where any component falls short of Condition B, rectification work should be planned to bring such component up to Condition B within 6 months of the time at which the component is surveyed. Boards should ensure, in this situation, that Project Co is obliged to carry out such work and that the Board has adequate remedy where Project Co fails to do this. Condition B will not be the appropriate standard for some other facets of the Facilities (e.g components relating to fire protection, health and safety, statutory requirements etc.). Boards should ensure that such requirements are also dealt with.
222 Boards to consider appropriate period.
223 Standard form on demand bond. Alternatively, Boards may withhold an appropriate percentage of the Service Payments (which will provide it with adequate protection against failure to carry out the works) as a retention pending completion of the Handback Works.