[State the terms and conditions for the adjustment of the Company/User Fee.
A sample user fee adjustment procedure culled from a Philippine BOT-ICT contract is presented below for reference purposes only:
The user fee that may be applied in the next Review Period (the "New User Fee") is as follows:
New User Fee t+1 = AFt x Initial Fee
where: | : |
|
Subscript t | : | Denotes the Review Period under evaluation |
Subscript t+1 | : | Denotes the next Review Period |
AF | : | Adjustment Factor (indexation formula reflecting changes in inflation, foreign exchange rate, etc.) |
Initial Fee | : | Proposed User Fee in the Winning Financial Proposal |
The Approved User Fees may be adjusted based on the conditions and guidelines set forth below:
■ The review of the User Fees will be conducted at the end of every [●] (the "Review Period") starting from [●]. The scheduled dates for the review of User Fees are as follows: [●].
■ Outside the scheduled dates for the review of the User Fees, either the Agency or the Company can call for a review of the User Fees under either of the extraordinary conditions set forth below:
o When the prevailing foreign exchange rate moves away from the "reference foreign exchange rate" by at least [●]%. The term "reference foreign exchange rate" shall mean the average foreign exchange rate during the previous Review Period or, prior to the end of the first Review Period, the foreign exchange rate of [●] Pesos for (1) one US dollar.
o When the monthly inflation rate at the national level or the month-on-month change in the Consumer Price Index (CPI) reaches at least [●]%. The inflation rate referred to in this provision shall be that rate as published by the National Statistics Office.
■ Under extreme conditions or extraordinary circumstances, such as a peso devaluation of more than 50% within a month, the Parties shall meet and negotiate the appropriate adjustment of the User Fees.
■ There shall be no escalation in the User Fees for the first [●] years from the start of operations of the Project, except under extraordinary conditions stated above.
■ The Agency reserves the right to file for an increase in the User Fees contingent on the regulatory body's approval, the affordability of service to end-users, the reasonableness of the financial rate of return to the Proponent, and the Proponent's ability to meet the prescribed service levels.
■ The User Fees cannot be increased more than [●] times a year.
■ There should be at least [●] months between changes in the User Fees.]