11.1.1 Value for money

The circumstances where government may seek payment of liquidated damages for any period of delay in achieving Completion42 will be determined on a value for money basis. Consideration will be given to a number of factors including the potential for higher costs of the bid (which may ultimately be passed through to users), remedies otherwise available to government under the project agreement to recover costs arising from a private party delay (e.g. indemnities) and erosion of the operating term.

Where there is a fixed Contract Term, erosion of the operating term as a result of late achievement of Completion and therefore reduction in the revenue able to be generated by the private party may be sufficient incentive to ensure timely Completion. In such a circumstance government may consider that it is not value for money to also recover liquidated damages.43

_________________________________________________________________________________________________
42 As distinct from the liquidated damages payable by the construction sub-contractor to the private party for any period of delay.

43 On this basis these NCPs for Economic Infrastructure do not consider relief in the form of extension of time for Completion however this may be appropriate in circumstances where government considers it appropriate to seek liquidated damages. Refer to NCPs for Social Infrastructure for discussion on the impact of relief events on the Completion Date and how this relates to the enforceability of liquidated damages.