In some contracts, if the tonnage of Contract Waste falls below a defined Guaranteed Minimum Tonnage (GMT) the Authority will be obliged to pay as if the Contract Waste tonnage had been at that defined level. As a result the Authority effectively pays for capacity not being used. Although this is a payment issue, rather than an obligation to deliver waste, the relevant contractual provisions may not necessarily sit in the Payment Mechanism. The Contract Manager should ensure that the Contract Management Manual highlights the connection between the GMT provisions and the Payment Mechanism.
The GMT is normally defined in terms of an annual figure. Given that waste tonnages tend to change gradually over time as a result of long term trends it may be obvious that the tonnage of Contract Waste is going to fall below the GMT in a particular year well before the end of that year. The point at which the GMT provisions oblige the Authority to start paying for capacity not being used for its waste should be defined clearly in the Contract. However before this situation arises the Contract Manager should ensure that all opportunities have been explored for the Authority to provide Top Up Waste (see Section 4.2.4) or for the Contractor to provide Substitute Waste (see Section 4.2.5).