Table 1 on the following page lists some events that would require consultation with the ISFU. Consultation should occur irrespective of whether the private party or the government entity is initiating the event. Category A Events are those that are automatically considered material, whereas Category B Events only require consultation if they are material Events. For some projects, objective materiality thresholds may be defined in the project's protocol as agreed between Treasury and the government entity.
Table 1: Events requiring consultation with the ISFU
Category A Event | Primary Reason for consultation |
Waiver or change to a Condition Precedent (CP) or the timing of a CP | Affects timing and pre-conditions of financial close |
Planning Approval conditions | Project timing (possibly including financial close), scope, affordability and risk allocation |
Change of ownership, control or financier, or major subcontractor | Government consent, reputation risk, base case financial model implications, consistent treatment with any other affected PPP contracts |
Refinance (non-vanilla where contractually specified) or new hedging arrangements | Government consent, base case financial model implications, administration of refinancing gain share mechanisms |
Default or termination | Government reputation, risk to continuity of service delivery, Impact to State Finances |
Step-in | Government reputation, risk to continuity of service delivery, Impact to State Finances |
Force Majeure | Service continuity, Impact to State Finances |
Benchmarking or market testing process | Market knowledge and reputation, impact to Service Payments and Service Specification, possible flow-on effects to other contractual terms, Impact to State Finances |
Satisfying the conditions of a Conditional Debt Pay Down, or other State contributions | Impact to State finances, verification of Base Case Financial model |
Changes to the Base Case Financial Model | Impact to State finances, possible impact on the calculation of termination payments |
End of term arrangements, e.g. handover or extension | Government consent, asset condition to ensure service continuity, Impact on State Finances |
Delay in construction completion or operation commencement dates | Impact to State finances, Government reputation in delivering infrastructure and services |
Category B Event | Primary Reason for consultation |
Infrastructure/Service Modifications, variations or augmentations | Project Scope, Project Affordability, State finances, timing, risk allocation |
Dispute or claim, including defects | Impact to State finances |
Relief (Extension or Intervening) events | May impact on asset readiness and availability of full service delivery |
Compensable (Extension or Intervening) events or material Adverse Effect events | Impact to State finances, availability/quality of service delivery |
Performance issue (e.g. high/repeated abatements) | Project viability, service continuity/quality, government reputation and avoiding undesirable precedents (in case of abatement relief/waiver) |
Changes to the payment mechanism or price | Impact to State finances, risk allocation and key performance indicators |