2.6 Calculation of Indexation of Monthly Unitary Charge
♦ The Annual Unitary Charge relevant to the Payment Period (APy) is calculated by applying indexation to the Base Annual Variable Element (VEb) on the Base Date by reference to changes in RPI(X) in accordance with the following formula:
Where:
APy | = | the Annual Unitary Charge relevant to the Contract Year (y); |
VEb | = | the Base Annual Variable Element for the year relevant to the Payment Period (m) that is provided in the Schedule of Charges in the Project Agreement (taken as 30% of APy)5, stated at price levels pertaining to the Base Date; |
FEb | = | the Base Annual Fixed Element of the UP that is not indexed (taken as 70% of APy6 for illustrative purposes) for the year relevant to the Payment Period (y) that is provided in the Schedule of Charges in the Project Agreement, stated at price levels pertaining to the Base Date; |
RPI(X)y | = | the value of the RPI excluding mortgage repayments (RPI(X)) as at the date when the indexation is to be given effect; |
RPI(X)b | = | the value of RPI(X) in respect of the Base Date. |
♦ The relevant index to be applied is the Retail Price Index all items excluding mortgage interest payments (RPI(X)). RPI(X) statistics are provided by the Office for National Statistics, Consumer Prices and General Inflation Division and are released monthly (Table RP05 – National Statistics).
♦ Indexation will be applied annually on the anniversary of the Base Date to the relevant base Annual Unitary Charge contained in the Schedule of Charges as amended from time to time through a Benchmarking Exercise or through change implemented under clause 60 (Authority and Contractor Changes).
♦ If the Schedule of Charges is amended through a Benchmarking Exercise or through change implemented under clause 60 (Authority and Contractor Changes), all Base Date in-year figures shall be re-based to the Base Date using the RPI(X) indices as a deflator. The restated base figure shall then be used to determine the on-going Unitary Charge following the Benchmarking or Change which may arise as a result of Compensation Events, Qualifying Changes in Law, Refinancing and Variations.
♦ If the RPI(X) for any month in which part of the Annual Unitary Charge is required to be indexed has not yet been published, then the indexation of such part of the Annual Unitary Charge for the relevant Contract Year shall be based on the most recently published available RPI(X) figure prior to the month required. The indexation will be calculated in accordance with paragraph 2.7.1. Such indexation will take effect from the anniversary of the Base Date with any under or overpayment of the Annual Unitary Charge by the Authority accruing because of the indexation in accordance with paragraph 2.7.1 to be included as an adjustment to the Monthly Unitary Payment in the subsequent monthly invoice.
♦ For the avoidance of doubt, the cost of non-domestic rates and Utilities is not included in the Annual Unitary Charge for the purpose of calculating the indexation. The payment of Utilities is dealt with in Part IX of this Schedule.
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5 30% is based on an assumed value of services which may change depending on what the actual service value is within the financial model.
6 70% is based on an assumed value of services which may change depending on what the actual service value is within the financial model.