81.5  Replacement of Sub-Contractors

81.5.1  Without prejudice to the Contractor's right to terminate and/or replace any Sub-Contractor in accordance with Clause 81.3.2 on the substitution or replacement of a Sub-Contractor due to a breach or default under the relevant Sub-Contract, on not more than one occasion during the Works Period and two occasions during the Services Period (provided that during the Contract Period the Contractor may not exercise its rights under this Clause on more than two occasions), on the substitution or replacement of a defaulting Sub-Contractor, the Contractor may elect that for the purposes of Clause 67 (Termination for Contractor Default) only any:

(a)  warning notices or Final Warning Notices in respect of Clause 67.4 (Persistent Breach); and/or

(b)  [failure to accept Contract Waste at the Facility to which Non-Acceptance Deductions apply];157 and/or

(c)  any failure to [process Contract Waste at the Facility]; and/or

(d)  any failure to [meet the Target Landfill Tonnage]

in each case relating to the relevant Services in respect of which the Sub-Contractor is being replaced, shall be disregarded. The Contractor shall notify the Authority on or before the appointment of any such substitute or replacement Sub-Contractor whether it elects for this Clause 81.5 to apply on that occasion.

81.5.2  Where an election is made pursuant to Clause 81.5.1 above then, for the purposes of Clause 67 (Termination for Contractor Default) only, no accrued Deductions [or performance points] or any warning notices or final warning notices in respect of Clause 67.4 (Persistent Breach) shall apply for the purposes of limbs [(b); (n); (o) and (p)] of the definition of Contractor Default in respect of the relevant Services during a period of [two (2)] months from the date on which those Services are first provided by the replacement or substitute Sub-Contractor. For the avoidance of doubt, Deductions may still be made from the Unitary Charge during that period pursuant to Schedule 4 (Payment Mechanism) but such Deductions shall not be included in the calculation of the [termination trigger].

81.5.3  Any election pursuant to Clause 81.5.1 shall be of no effect where the proposed relevant substituted or replaced Sub-Contract is with an Affiliate of either the Contractor or the substituted or replaced Sub-Contractor as the case may be or a Shareholder as the case may be and the Contractor has not been granted the prior written consent of the Authority to make such election (not to be unreasonably withheld or delayed).

______________________________________________________________________________________

157  To be consistent with Payment Mechanism triggers to termination.