The following components of the Defects regime will be considered by the State on a project specific basis:
• where the Project is fully outsourced, and as a consequence Project Co bears the impact of Defects in the Project Asset, the State may limit the Defects that are the subject of the specific Defect rectification obligations;
• the PV Standard Project Deeds provide that the Returned Asset DLP will be 24 Months from the Date of Commercial Acceptance. This may not be appropriate for Returned Assets handed back well before Commercial Acceptance or for Returned Assets handed back after Commercial Acceptance; and
• the Defect regime assumes that rectification, and the commercial incentives for rectification, of Defects in Maintained Assets will be addressed in the Services Specification and the Abatement Regime. The Abatement Regime will need to be calibrated to address a range of Defects and their impacts. Where this is not feasible and Project Co is not rectifying the Defect in accordance with the Project Deed, the State may include in the Project Deed a mechanism for withholding payment until the Defect is rectified. However, this needs to work consistently with any concurrent Abatement Regime and must not give rise to double recovery.
The Project Deed may also include a more detailed regime for managing and accepting non-conformances. These are typically design non-conformances which, if progressed, will result in Defects which it is not practicable for Project Co to rectify. Any such regime should work consistently with the terms of the Project Deed in respect of Defects.