Fit For Purpose is defined to mean fit for its intended purposes, functions and uses as specified in, or reasonably inferred from, the PSDR or any other part of the Project Deed. The Fit For Purpose warranty applies to each different class of assets as follows:
• Maintained Assets (other than Remaining Works): on and from the Date of Commercial Acceptance, by reference to the purposes, functions and uses which are current and apply as at the Date of Commercial Acceptance;
• Maintained Assets (including Remaining Works): on and from the Date of Final Acceptance, by reference to the purposes, functions and uses which are current and apply as at the Date of Final Acceptance;
• Returned Assets: as at the Date of Returned Works Acceptance for the relevant Returned Asset, by reference to the purposes, functions and uses which are current and apply at that date; and
• Returned Assets that were Remaining Works or Returned Works Outstanding Items: on the Date of Final Acceptance, by reference to the purposes, functions and uses which are current and apply as at the Date of Final Acceptance.
Each FFP Warranty is extended to the purposes, functions and uses 'reasonably inferred from' the PSDR and not just those expressly stated in the PSDR. This is because the PSDR may specify particular requirements that are clearly assuming that the Project Assets will be used for a particular purpose without specifying the use itself. It is critical, in order for the FFP Warranty to operate effectively, that the PSDR sets out the purposes and functions of the relevant Project Assets. This should be verified by the legal team drafting the Project Deed.
Under clause 51.3 of the PV Standard Project Deeds, the FFP Warranties for the Maintained Assets repeat every day from Commercial Acceptance to the Expiry Date. The warranty is expanded at the Date of Final Acceptance to include the Remaining Works that by definition are not completed at Commercial Acceptance but are required to be completed by Final Acceptance. The FFP Warranty for each Returned Asset is given at the Date of Returned Works Acceptance for the relevant Returned Asset and is expanded at Final Acceptance but only to cover those Returned Assets that were Remaining Works or those parts of the Returned Assets that were the subject of Returned Works Outstanding Items.
The State is indemnified by Project Co under clause 43.2 of the PV Standard Project Deeds for Liability the State suffers as a consequence of the breach of the FFP Warranties. However, Project Co's Liability is limited by the limitations placed on the indemnity in clause 43.6 and the indirect and consequential loss exclusions in clause 43.11 of the PV Standard Project Deeds. Liability for warranties are also limited by the various statutory limitation periods referred to in section (a)(i)2.2.1.
The State appreciates that a repeating warranty for the Maintained Assets can be a challenge for the construction market but the repetition of the FFP Warranties is fundamental to the long term nature of the Project Deed and the whole of life outcomes that the State is seeking from the PPP. It is therefore a risk that the State expects equity to take, allocate, manage and price as appropriate.
Project Co is required to undertake the Development Activities so that the Temporary Works are Fit for Purpose. This is because the Temporary Works (e.g. scaffolding, temporary by passes etc.) can be significant. As the Fit for Purpose test is by reference to the PSDR, it will be important to ensure that the purposes, functions and uses for the Temporary Works are specified in the PSDR. If they are not, the Project Deed should be amended so that a more general fit for purpose requirement without reference to the PSDR is used for the Temporary Works.