In the event of termination of the Project Deed by the State for convenience, the State will be liable to Project Co for, amongst other things, amounts reasonably and properly incurred by Project Co and payable to the Key Subcontractors, subject to the restrictions set out in clause 9.3(g) of the PV Standard Project Deeds. Clause 9.3(g) reflects the following principles:
• the State agrees that the Key Subcontractor will be entitled to costs and a percentage of the unpaid balance of the contract sum;
• the State requires certainty as to the percentage of the unpaid balance of the contract sum that will be payable, by including that amount in the Project Deed and requiring the Respondents to bid it in their Proposals. This ensures that the State is able to quantify this exposure before terminating the Project for convenience and avoids protracted negotiations or Disputes over quantum on a termination for convenience; and
• in respect of the percentage of the unpaid balance of the contract sum payable, the Key Subcontractor will be entitled to the lesser of:
- the specified percentage of the unpaid balance of the contract sum that would have been payable to the relevant Key Subcontractor in accordance with the Key Subcontract, but for the State's termination for convenience; and
- the specified percentage of the unpaid balance of the contract sum that would have been payable to the relevant Key Subcontractor but for the State's termination for convenience, for the 12 month period from the date of the termination.
The State will not pay termination amounts to Key Subcontractors other than where the State terminates the Project Deed for convenience.