Commentary:

The Tariff should have two components, namely:

(1) Fixed Payments

- This is based on the capacity made available to the Agency.

(2) Variable Payments

- This is based on the actual amount of Treated Water delivered by the Company to the Agency.

The Tariff to be paid to the Company shall be reduced in the event the following occur:

(1) failure of the Company, due to its own action or inaction, to deliver Treated Water in an amount equivalent to NDQ;

(2) failure of the Company, due to its own action or inaction, to deliver Treated Water complying with Treated Water Specifications; or

(3) failure of the Company, due to its own action or inaction, to deliver Treated Water in accordance with the Agreement due to a Political Force Majeure Event.

In the event of a Political Force Majeure Event or should the availability of Raw Water be reduced due to causes not attributable to either Party (ex. drought), then the Agency should pay the Company an amount equivalent to the fixed component of the Tariff.