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3 These provisions do not give the Board any real control over changes to the funding agreements after contract signature. This approach gives Project Co and its funders comfort that they have flexibility to deal with cost overruns etc, but has been adopted on the basis that:
∙ compensation for Project Co default: will be based on a market value of the unexpired term
∙ compensation for non-Project Co default: will be limited so that repayment of outstanding debt is calculated by reference to an agreed schedule
∙ appropriate limits have been placed on hedging agreements (for example, by allowing only those agreements that comply with an agreed hedging policy to be included within the definition of outstanding debt)
∙ compensation on termination which includes amounts relating to equity will be limited on the relevant basis eferred to in the Scottish Government Health Directorates Guidance.
This is necessary to give Boards comfort in relation to the level of their potential exposure. If compensation is to be calculated on a different basis (bearing in mind DoH and Scottish Government Health Directorates Guidance) these provisions will need to be reviewed accordingly.