At any time during the Term, the State may direct Project Co to undertake a Modification in connection with the Project. This may be done by issuing a Modification Order or requesting Project Co to provide a Modification Proposal. Such a Modification may include a decrease, omission, deletion or removal of any part of the Project Activities provided that the State may not omit all or substantially all of the Development Activities or the Services. If Project Co undertakes a State Initiated Modification, it will be entitled to be compensated for its costs properly and reasonably incurred in undertaking the Modification as calculated in accordance with the Change Compensation Principles.
The following additional events will be treated as a State Initiated Modification and clause 35 of the PV Standard Project Deeds and the Change Compensation Principles will apply:
• a State Approval Event (see section 2.8.2);
• a Contamination Compensation Event (see section (a)(i)2.13.4);
• a Compensable Change in Mandatory Requirements (see section 2.44.2);
• loss or damage to the Project Assets occurs and the State directs Project Co to repair or rebuild the Project Assets, but only where:
- the loss or damage to the Project Assets was caused by a Day 1 Uninsurable Risk or an Uninsurable Risk;
- Project Co is unable to recover insurance proceeds under an Insurance to repair or rebuild the Project Assets as a result of a State Insurance Breach (see section 2.51.3 for further information on State Insurance Breach); or
- the State directs that repair or reinstatement to different specifications to that of the Project Assets which suffered the loss or damage; or
• loss or damage to the Project Assets occurs, the State does not direct Project Co to repair or rebuild the Project Assets and omits that part of the Project Assets from the Project.
To ensure that any State Initiated Modification is managed efficiently, after Project Co has submitted a Modification Proposal, the parties must meet to discuss the Modification Proposal and may agree on how certain issues in respect of the Modification are managed.