Under a typical waste PFI/PPP contract, the Contractor commits that it will provide the Services from the Services Commencement Date to the expiry of the Contract. There are, however, circumstances in which the Contractor is prevented from providing the Services as scheduled. For certain types of event that constitute Compensation Events, it is only fair that the Contractor should be granted time extensions, relieved from liability, and/or compensated as appropriate.
If the Contractor believes that a Compensation Event has caused or is likely to cause the Contractor to:
• experience a delay in achieving specified key dates relating to the Works, to the commissioning of the Facility or to Service Commencement;
• be unable to meet its contractual obligations; or
• incur costs or lose third party revenue (including Third Party Income),
the Contractor can claim relief from its obligations and compensation under the procedure set out in the WIDP Contract (Clause 39). It is best practice for the Contract Manager to involve the Authority's Legal Department at an early stage of discussions relating to Compensation Events.