17.1.3  Payment of Entitlement

(a)  Government has the option of paying Compensation for a Compensation Event by:

(i)  a lump sum payment;

(ii)  milestone payments, matching delivery of the relevant works; or

(iii)  subject to the private party's agreement, extending the operating term.

(b)  If government requires the private party to fund an amount up-front and that amount is above a specified threshold,55 the private party must use its commercial and prudent endeavours to obtain competitive financing for such costs. If the private party is unable to obtain financing acceptable to government,56 government may instead choose to pay those costs by way of a lump sum payment.

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55  To be agreed on a project specific basis but is intended to be set at a fairly low level in light of the value of the project.

56  Jurisdictions may choose to extend this requirement to circumstances where the private party reasonably believes that such financing will have a material adverse effect on it.