Following the submission of the PPP Data Tables and inclusion in the annual Budget Process each Availability PPP will be granted an annual capital appropriation budget reflecting the capital element of the forecast Service Payment liabilities. This capital appropriation is provided to make Principal repayments on the PPP and is not included in the CEAL of the 'Relevant Entity'.
For any grant funded Relevant Entities, the principal agency will be granted an annual recurrent appropriation reflecting the capital element of the forecast Service Payment, which will then be provided to the grant funded Relevant Entity as a capital grant.
As mentioned in Reporting Stage 3, the traditional project's CEAL will be replaced by a new CEAL for the PPP, coinciding with when the completed asset is recognised on the Relevant entity's accounts. This revised CEAL will include any interest capitalised by the SPV during the Construction Phase only if there are no capital savings (relative to the traditional project’s CEAL) to draw upon.
The global recurrent element of the Service Payment may be met through the Relevant Entity's existing budget or through an additional recurrent appropriation if approved through the Budget process as a Measure or Parameter and Technical Adjustment (PTA).
Appropriations and budget controls may be adjusted for supplementary recurrent elements of the Service Payment as a Measure or PTA. Additional funding will be provided to the Relevant Entity for any interest expense element.
A standing government approval (for the project term) should be sought for changes in interest and other liabilities and payments assumed by Treasury, to avoid seeking government approval each year.
Funding of other (original and additional) supplementary recurrent elements will be decided and approved on a case by case basis through the Budget process. The contingency should be reflected in the total PPP project's budget, just like it is for a traditional project, and managed in accordance with TC 14-29 (Management of Contingency Provisions for Major Projects)