23.5.3.1 The Contractor should receive a termination payment which leaves it in the position it would have been in had the Contract run its full course.
23.5.3.2 Regardless of whether or not the asset has any alternative use, the level of compensation on a voluntary termination should be the same as the level proposed on a termination for Authority default (see Sections 23.1.3 and 23.1.3.9 (Compensation on Termination for Authority Default)).
23.5.3.3 Again, the Contract should clarify what happens to the asset following such full payout. It would usually be expected to revert to the Authority.
Required drafting is as follows:
23.5.1 Voluntary Termination by the Authority
(a) The Authority may terminate the Contract at any time on or before its Expiry Date by complying with its obligations under paragraphs (b) to (d) below.96
(b) If the Authority wishes to terminate the Contract under this Clause, it must give notice to the Contractor stating:
(i) that the Authority is terminating the Contract under this Clause 23.5.1 (Voluntary Termination by Authority);
(ii) that the Contract will terminate on the date specified in the notice, which must be a minimum of [30] days after the date of receipt of the notice; and
(iii) whether the Authority has chosen to exercise its option under paragraph (c) below.
(c) On termination, the Authority shall have the option to require the Contractor to transfer its right, title and interest in and to the Assets to the Authority or as directed by the Authority.
(d) The Contract will terminate on the date specified in the notice referred to in paragraph (b) above;
23.5.2 Compensation on Voluntary Termination
On termination under Clause 23.5.1(d) above, the Authority shall pay the Contractor within thirty (30) days of the Notice Date an amount equal to the amount payable under Clause 23.1 (Authority Default) less an amount equal to half of the Lifecycle Surplus as at the Termination Date in accordance with Section 24 (Calculation and Payment of Early Termination Payments).
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96 This could arise, for example, if the Authority did not wish the Project to continue for reasons unconnected with the Contractor.