Appendix 1: Glossary
Associate, for the purposes of Chapter 38 (Probity) only, generally includes any related body corporate of the private party and any officer, employee, agent, contractor, consultant or adviser of a member of the private party group for the particular project.
Availability Failure means a Service Failure which affects one or more functional areas or units of a facility.
Base Case Financial Model refers to the base case financial model agreed between the parties as at the date of Financial Close, as updated, amended or adjusted from time to time in accordance with section 14.5 of Chapter 14 (Payment provisions). The Base Case Financial Model typically includes all costs, revenues and payments between parties and all parameters and assumptions underlying these calculations.
Base Case Weighted IRR means the average internal rate of return to both equity and debt providers, expressed as a percentage, that is stated in the Base Case Financial Model. (This should be differentiated from the Base Case Equity IRR, which represents the internal rate of return only to equity providers.) In these CPs for Social Infrastructure, the Base Case Weighted IRR is normally applied in relation to the calculation of Termination Payments.
Change in Control means a change:
(b) in the board of directors or decision making control of influence;
(c) in the parties who are able to cast (or control the casting of) 20 per cent or more of the votes at a general meeting; or
(d) in the shareholding which affects 20 per cent or more of shares.
Change in Law has the meaning given to it in section 20.1 of Chapter 20 (General Change in Law).
Commercial Acceptance means, in a two-stage Completion process, the stage of the works where all of the specified tests and completion criteria have been satisfied, to the satisfaction of the completion certifier as described in section 10.5.1 of Chapter 10 (Construction and Completion).
Compensation means the payment of compensation calculated in accordance with Chapters 17 (Compensation Events) and 18 (Compensation payable) and otherwise in accordance with these CPs for Social Infrastructure.
Compensation Events means those events which entitle the private party to Compensation in accordance with Chapter 17 (Compensation Events).
Compensation Principles means the principles set out in Chapter 18 (Compensation payable).
Completion occurs when the private party has constructed a facility to government's requirements and the facility is deemed suitable for occupation and use. Where a two-staged completion process is used (see section 10.5.1(c) of Chapter 10 (Construction and Completion)) the project agreement may distinguish between:
(e) "Technical Completion" - i.e. completion of technical requirements, but with some minor defects remaining and with certain tests remaining to be carried out to satisfy the completion certifier the operations can commence; and
(f) "Commercial Acceptance" - upon the occurrence of which operations can commence).
References to "Completion" may include references to "Technical Completion" or "Commercial Acceptance", or both, as appropriate.
Conditions Precedent has the meaning given to that term in
Contracted Services means those services described as such in Chapter 12 (Service requirements and Services Specifications).
Control means, for the purposes of Chapter 29 (Change of ownership/control), the ability or capacity to determine the outcome of decisions about the relevant entity's financial and operating policies.
Date for Commercial Acceptance means the contractual target date for Commercial Acceptance (refer to definition of Date for Completion).
Date for Completion means the contractual target date for Completion. Where a two-staged completion process is used (refer to section 10.5.1(c) of Chapter 10 (Construction and Completion)), this term may also be used to refer to one or both of, or may be substituted by one or both of, "Date for Technical Completion" or "Date for Commercial Acceptance", depending on the context.
Date for Technical Completion means the contractual target date for Technical Completion (refer to definition of Date for Completion).
Date of Completion means the actual date Completion is certified to have been achieved.
Default Termination Compensation Amount has the meaning given to that term in section 26.1 or 26.1.1 of Chapter 26 (Termination Payments), depending on the option selected in respect of payments to be made to the private party on termination.
Default Termination Event has the meaning given to that term in Chapter 25 (Termination). "Default Termination Event" may be defined by various names in different project agreements, including "Termination Event".
Design Requirements are the requirements for the design of the facility as set out in the Output Specifications, the design documentation bid by the private party and included in the project agreement as at contractual close, and the other design requirements set out in the project agreement.
Disclosed Information means all information and documentation provided by government to the private party in respect of the project, including the invitation for expression of interest and the Project Brief.
Environmental Law means the common law, statutes, regulations and other subordinate instruments relating to the environment (such as State environment protection policies and industrial waste management policies).
Environmental Notice means any direction, order, demand or other requirement to take any action or refrain from taking any action in respect of the project site or facility or its use:
(g) from any relevant authority;
(h) whether written or otherwise; and
(i) in connection with any Environmental Law.
References to "Environmental Notice" include references to "Clean Up Notice" or such other equivalent notice under other jurisdictions' Environmental Laws.
Estimated Fair Value means, for the purposes of "Option 1" in Chapter 26 (Termination Payments), the amount of consideration at which an asset is traded, the value agreed upon in an arm's length transaction between knowledgeable and willing parties who are under no compulsion to act. Fair value is similar to market value. In these CPs for Social Infrastructure, Estimated Fair Value is calculated by reference to the formulae in section 26.1.2 of Chapter 26 (Termination Payments).
Event of Default means an event described in section 24.1 of Chapter 24 (Default) which, if uncured, will entitle government to terminate the project agreement.
Financial Close means the date on which the last Condition Precedent is satisfied or waived and the obligations of each party to the project agreement becomes binding. See further Chapter 2 (Conditions Precedent to Financial Close).
Force Majeure Events has the meaning given to that term in section 21.1 of Chapter 21 (Force majeure).
Force Majeure Compensation Amount has the meaning given to that term in section 26.2 or 26.2.1 of Chapter 26 (Termination Payments), depending on the option selected in respect of payments to be made to the private party on termination.
Force Majeure Termination Event means a Force Majeure Event which results in government or the private party terminating the project agreement, as set out in section 21.3.1 of Chapter 21 (Force majeure). The term "Force Majeure Termination Events" captures termination resulting from a Force Majeure Event and termination pursuant to the uninsurability provisions in section 23.4 of Chapter 23 (Insurance).
Full Service Commencement Date means the date on which Contracted Services and government's core services may commence to be provided in, and in respect of, the facility (which is usually prescribed as the Date of Completion or the day after that date).
Functional Brief means that part of the Output Specifications that describes the functional and design principles and requirements that must be addressed by the private party in its design of the facility, including the purposes for which government is procuring delivery of the project and the facility, the intended uses of the facility, a description of the accommodation and components required and the functional areas and relationships within the facility.
General Services Specifications has the meaning given to that term in section 12.2.1(c)(i) of Chapter 12 (Service requirements and Services Specifications).
Good Industry Practice means the degree of skill, care, prudence, foresight and practice which would reasonably and ordinarily be expected from time to time of a skilled and experienced person, engaged in the same type of undertaking as that of the private party or its sub-contractors, under the same or similar circumstances as the implementation of the project.
Government Default means a default by government, including in the circumstances described in section 25.4 of Chapter 25 (Termination).
High Risk Site has the meaning given to it in section 4.4.2(b) of Chapter 4 (Environmental issues and Site Conditions).
Illegality Event means the occurrence of any of the following events:
(j) the private party or a material sub-contractor ceases to hold a consent or breaches applicable Law and such failure or breach is, in the opinion of government, material to the performance of the private party's obligations under the project agreement and is not remedied within 30 days or the earlier of:
(i) the date on which government notifies the private party of the breach; or
(ii) the date on which the private party becomes aware of the breach;
(k) any Project Contract being revoked, repudiated or terminated, or ceasing to be legal, valid and binding and enforceable against the private party or any other person (other than government), other than as contemplated by or permitted in accordance with the Project Contracts, or a Project Contract becomes or is claimed to become invalid, void or voidable in any material respect, and the event is not remedied within 30 days of the relevant event occurring or, in the event of a claim, is shown, within 30 days, to the satisfaction of government to be frivolous, vexatious or without proper legal basis; or
(l) it is or becomes unlawful for the private party or a material sub-contractor to perform any of its obligations under the Project Contract, provided that, where such event occurs as a direct result of a general Change in Law, the event is not remedied within 30 days of the relevant event occurring.
Insolvency Event includes voluntary and involuntary winding up (except for the purposes of a reconstruction, merger or consolidation), administration, insolvency (including inability to pay debts as and when they fall due and failure to comply with a statutory demand), the appointment of a receiver, receiver and manager, controller or provisional liquidator, or entering into arrangements with creditors, or bankruptcy.
IP has the meaning given to that term in section 37.1(a)(i) of Chapter 37 (Intellectual property).
KPIs means "key performance indicators", being the financial or non-financial indicators used to measure progress or success of the private party during the operating term, on critical factors relevant to the project, and which will normally vary depending on the Contracted Services and other attributes of the project. KPIs are often included in the contractual arrangement because they may serve as the basis for certain payments to the private party.
Law has the meaning given to that term in section 20.1.1 of Chapter 20 (Change in Law).
Lifecycle Costs means those costs associated with maintenance, refurbishment and disposal of an asset over the duration of that asset's life, over and above those costs expended on initial capital acquisition and installation.
Loss has the meaning given to that term in section 33.1.1(a) of Chapter 33 (Indemnities, warranties and contractual claims).
Low Risk Site has meaning given to it in section Error! Reference source not found. of Chapter 4 (Environmental issues and Site Conditions).
Minor Works has the meaning given to that term in section 19.8 of Chapter 19 (Modifications).
Modification means a change to the project made in accordance with Chapter 19 (Modifications).
Output Specifications means government's minimum design and construction requirements. This is usually a set of documents prepared by government and included as part of the Project Brief documentation. It will usually include the Functional Brief, technical specifications, architectural specifications, engineering specifications, design specifications and master plan principles. This set of documents may be defined by various names, including the "Technical Specifications", "Project Specifications", "Design Brief" and other variations.
Panel, for the purposes of Chapter 31 (Dispute resolution), has the meaning given to that term in section 31.1 of that Chapter.
Permitted Security Interest means a security interest to which government has provided its prior consent, or which is created under an agreement with government or a lien which arises solely by operation of Law in the ordinary course of ordinary business.
Persistent Breach means:
(m) a specified number of defaults (whether of the same or different type and class) (excluding Service Failures) occurring in a specified period (whether or not remedied); or
(n) where, in the government's opinion, there has been a persistent or repeated failure by the private party to comply with its obligations (noting that, in some jurisdictions, this is limited to where these persistent breaches frustrate the performance or implementation of the project agreement, or which has a material adverse effect on the provision of core services by government),
which continue or recur after a notice of warning in respect of such breaches has been delivered by government (noting that, in certain jurisdictions, subsequent continuance, or recurrence, must occur a specified number of times within a limited period, before a Persistent Breach is deemed to have occurred).
PMS or Performance Monitoring System means a system typically comprising a suite of indicators and procedures agreed upon in the project agreement, primarily for the purpose of determining whether the private party is delivering the Contracted Services to the Services Specifications. See further section 13.1 of Chapter 13 (Performance monitoring and review).
Probity Event has the meaning given to that term in section 38.2 of Chapter 38 (Probity).
Project Brief means government's request for tender issued to the market in respect of the project. This will usually include:
(o) general project information and instructions to bidders on the tender process;
(p) a commercial framework summary;
(q) government's evaluation criteria and the tender schedules to be completed by bidders;
(r) the Output Specifications;
(s) draft Project Contracts (including the project agreement and Services Specifications); and
(t) any other relevant information (such as site assessment reports to be provided to bidders (if any)).
Project Contracts means the contracts entered into by government and the private party (respectively) in respect of the project, which usually include the project agreement, construction sub-contract, facility management sub-contract, direct deeds with the private party's major sub-contractors and financiers, the independent completion certifier agreement (where such a certifier is engaged by the private party and government) and tenure documents (such as leases or licences).
Project Default means:
(u) failure by the private party to provide a cure plan, cure an Event of Default within the relevant cure period and otherwise comply with the agreed cure plan and, in certain jurisdictions, otherwise diligently pursue the cure of the default; or
(v) failure to prepare a draft prevention plan which is approved by government, comply with the approved prevention plan, or (in some jurisdictions) comply with government's requirements, as notified, in circumstances where the prevention plan is not accepted by government.
Project Director means government's representative, who in most cases will be authorised to exercise and perform government's day to day rights and obligations under the project agreement and may have additional functions (such as certification of Completion).
Project Specific Change in Law has the meaning given to it section 20.3 of Chapter 20 (Change in Law).
Quality Failure means a Service Failure which is not referable to a specific area or unit of a facility.
Re-financing has the meaning given to that term in section 32.2 of Chapter 32 (Re-financing).
Re-financing Gain has the meaning given to that term in section 32.5.1 of Chapter 32 (Re-financing).
Relief means relief from default / termination granted by government in respect of Relief Events in accordance with the principle set out in Chapter 16 (Relief Events), which 'relief' may translate into:
(w) during the design and construction phase, the granting of extensions of time; and
(x) during the operating term, relief from the performance of obligations and, in some jurisdictions, from abatement.
Relief Events means those events which entitle the private party to Relief, in accordance with the principles of Chapter 16 (Relief Events).
Repeated Failure means a failure caused by the same Service Failure, or substantially the same Service Failure, occurring on more than a specific number of occasions over a specified period. The number of times and the length of the period will be determined on a project-by-project basis.
Reporting Failure means a failure by the private party to correctly report a Service Failure or where the private party has incorrectly calculated the abatement attributable to a Service Failure.
Reviewable Services means services of the type described in section 0 of Chapter 15 (Review and market testing of services) which will be subject to review and market testing in accordance with the principles set out in that Chapter.
Service Failure means a failure caused by the failure of the private party to provide the Services in accordance with the Services Specifications, as further defined and described in Chapter 12 (Service requirements and Services Specifications).
Services Specifications means government's requirements for the provision of the Contracted Services, and will include the General Services Specifications, Specific Services Specifications and performance standards (including KPIs). The Services Specifications can encompass both quantity and quality aspects of the Contracted Services.
Site Conditions has the meaning given to that term in Chapter 4 (Environmental issues and Site Conditions).
Specific Services Specifications has the meaning given to that term in section 12.2.1(c)(ii) of Chapter 12 (Service requirements and Services Specifications).
Step-in Rights has the meaning given to that term in section 27.1.2 of Chapter 27 (Step-in).
Sunset Date means a set period after the Date for Completion, after which if Completion of a facility has not occurred (or is unlikely to occur by the Sunset Date), government will have the right to terminate the project agreement. See further Chapter 25 (Termination).
Technical Completion means, in a two-stage Completion process, the stage of the works where all of the specified tests and Completion criteria have been satisfied, to the reasonable satisfaction of the completion certifier as described in section 10.5.1 of Chapter 10 (Construction and Completion), which stage must occur prior to Commercial Acceptance.
Termination Date means the date on which the project agreement is terminated.
Termination Payment means any payment made by government under Chapter 26 (Termination Payments), following termination of the Project Agreement.
Uninsurable Event means an event which occurs and which results in a particular risk becoming uninsurable. See further section 23.4.2 of Chapter 23 (Insurance).
Voluntary Termination has the meaning given to that term in section 25.3 of Chapter 25 (Termination).
Voluntary Termination Payment Amount has the meaning given to that term in section 26.3 or 26.3.1 of Chapter 26 (Termination Payments), depending on the option selected in respect of payments to be made to the private party on termination.
Works Program means the detailed program of works as required by the Services Specifications, including details of the critical path for the design, construction and commissioning and other activities required in order for the private party to deliver the Contracted Services, and details of the time intervals required to complete each of those stages or activities. The degree of detail, the items to be included and the time periods for each stage in the Works Program will vary depending on the project.