The State's preference is for the availability fee to be the primary component of the Service Payment. It remunerates Project Co for the costs and risks of providing Project Assets which are always available and ready for use in accordance with the services specification in the PSDR and related performance measures. The availability fee puts into effect the State's retention of demand risks - while the costs recovered through availability fees are a matter for bidding, they should typically be the costs of construction (including raising finance) and the fixed costs of maintaining fitness for purpose of the Project Assets (including Project Co costs and lifecycle costs).
The scope of availability is specific to an asset and will differ across projects. Conceptually, availability is a combination of physical function, access and amenity (or quality of experience for users). An Availability Failure occurs where these requirements are not met. Both the concept of availability and Availability Failures are project-specific and will be described in the Payment Schedule and services specification in the PSDR.
The availability fee may comprise sub-components alongside a base fee, for example, a lifecycle maintenance payment. These sub-components are typically separated from the base fee when there is a need to differentiate or separately address either:
• the commencement of a component of the availability fee;
• the indexation of a component of the availability fee;
• the abatement of a component of the availability fee;
• the extent of price risk borne by the State for a component of the availability fee; or
• for transparency of the value of a component of the availability fee.
The Payment Schedule will identify all sub-components of the availability fee and describe the conditions for payment of them.