Works after Actual Completion Date

39.6  In relation to a Relevant Change in Law referred to in Clause 39.3(c) (Works after Actual Completion Date) (a "Relevant Works Change in Law"):

(a)  for which the Allowable Expenses amounts to less than 0.05% of the Capital Cost of the Facilities (a "De Minimis Amount"), Project Co shall not be entitled to receive any payment, compensation or, save as expressly provided otherwise in this Agreement, any other relief in respect of such Relevant Works Change in Law, save where in any one Contract Year there shall occur more than two (2) Relevant Works Change in Law which each give rise to a De Minimis Amount, in which case the third and each subsequent such De Minimis Amount resulting from a Relevant Works Change in Law in that Contract Year (each an "Additional De Minimis Amount") shall be taken into account for the purposes of:

(i)  calculating the Cumulative Allowable Expenses; and

(ii)  calculating the Board's Cost Share of such Additional De Minimis Amounts; and

(b)  subject to Clause 39.6(a), Project Co shall be entitled to receive compensation from the Board of an amount equal to the Board's Cost Share in respect of such Relevant Works Change in Law. Project Co shall not be entitled to receive any other payment, compensation or (save as expressly provided otherwise in this Agreement) any other relief in respect of any such Relevant Works Change in Law or associated Variations (or the consequences of either) and the provisions of Clause 41.10 (Delay Events - Compensation) shall be construed accordingly. Project Co has accepted the risk of bearing the financial consequences which are not covered by (or exceed) the Board's Cost Share and has had the opportunity of assessing the risk when bidding and agreeing the Service Payments.

39.7  For the purposes of Clause 39.6:

(a)  "Capital Cost of the Facilities" means [Board to include figure by reference to the capital build cost of the Facilities contained in the base case financial model]134; 

(b)  "Allowable Expenses" means the costs and expenses to be incurred by Project Co as a direct consequence of the Relevant Works Change in Law, which shall be calculated on the basis that Project Co shall be placed in no better or worse position than it would have been in had the Relevant Works Change in Law not occurred, taking into account (inter alia) the provisions of Clauses 39.4(c)(v) and 39.4(c)(vi) (Failure to mitigate) and: 

(i)  the extent to which Project Co has been (or will be) compensated as a result of any indexation of the Service Payments under this Agreement;

(ii)  any decrease in its costs resulting from such Relevant Works Change in Law; 

(iii)  any amount which Project Co will recover under any insurance policy (or would have recovered if it had complied with the requirements of this Agreement or of any policy of insurance under this Agreement) which amount, to avoid doubt, shall not include the amount of any excess or deductibles or any amount above the maximum insured amount applicable to any such insurance policy.

(c)  For the purposes of calculating Allowable Expenses in Clause 39.6:

(i)  there shall be taken into account in addition to Capital Expenditure all the costs and expenses to be incurred by Project Co in performing Project Operations as a consequence of the Relevant Works Change in Law including the additional future capital expenditure, maintenance and lifecycle costs;

(ii)  in taking these costs into account they shall be expressed in nominal terms; and

(iii)  all future costs and expenses shall be discounted at the relevant cash balance deposit rates prevailing at the time Project Co makes its application for payment in relation to the Relevant Works Change in Law having regard to the expenditure profile of such costs and expenses.

(d)  "Cumulative Allowable Expenses" means the cumulative amount of the Allowable Expenses from time to time (excluding any De Minimis Amount but including any Additional De Minimis Amount); and

(e)  "Board's Cost Share" means an amount equal to the percentage share of the relevant Allowable Expenses that are to be borne by the Board as indicated in Column 3 in the table below and which is calculated by reference to the ratio that the Cumulative Allowable Expenses at that time bears to the Capital Cost of the Facilities:

Table B

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134 This figures remains set at the base case level throughout the term.