The risks of a change in law are allocated in a similar manner to that in England and Wales, with the public sector retaining the risk of changes in law which were not foreseeable at the date of signature of the project agreement, which discriminate against the project, the project company, PFI/PPP companies or the PFI/PPP sector, or which apply specifically to the facilities in question.
The risk of other changes in law are a private sector risk, with a notable exception where changes in law requiring capital expenditure come into force after construction is completed, and were not reasonably foreseeable. Here the risk is split between the private and public sectors on a sliding scale basis, with the project company's overall exposure being capped. Another exception to the general rule is in relation to Value Added Tax ("VAT"), as the project company does not bear the risk of a change in law which affects the VAT status of the service provided by the project company.