Subject to clause 42.7 and any liability of the State for payment of any insurance excess or deductibles which is set out in clause 44.12(b), Project Co bears the risk and cost of the repairing or reinstating of all loss or damage to the Project Assets unless:
(a) (Day 1 Uninsurable Risk, Uninsurable Risk or State Insurance Breach): the loss or damage to the Project Assets was caused by a Day 1 Uninsurable Risk or an Uninsurable Risk or to the extent that Project Co is unable to recover the cost of repairing or reinstating the Project Assets under any of the Insurances under which Project Co would have otherwise been entitled to recover, as a result of a State Insurance Breach, in which case:
(i) the repair or reinstatement of the Project Assets and the impact of this (if any) on the Project Activities will constitute a Modification in respect of which Project Co may issue a Modification Proposal in accordance with clause 35.2(a)(v) and Project Co's or the State's entitlements will be determined in accordance with clause 35 as if the relevant loss or damage was a State Initiated Modification; and
(ii) the State must also indemnify Project Co for all other Liabilities incurred by Project Co as a consequence of the loss or damage to the extent that they are not covered by the Change Compensation Principles,
provided that the amount payable by the State under this clause 42.4(a), together with the cost of preparing any Modification Proposal referred to in clause 42.4(a)(i), must not exceed the amount that is equal to the aggregate of:
(iii) the insurance proceeds that would have been payable under the relevant Insurances had the event been insurable under those Insurances or had the Insurances responded; and
(iv) if clause 42.4(b) also applies, any amount payable by the State to Project Co under clause 42.4(b),
less the aggregate of:
(v) any component of the insurance proceeds that would have been payable under the relevant Insurances (had the event been insurable under those Insurances or had the Insurances responded), which is attributable to the loss of equity return to the providers of the Equity Funding or loss of profit to a Group Member; and
(vi) if clause 42.4(b) also applies, any amount payable by Project Co to the State under clause 42.4(b); or
(b) (State Initiated Modification for different design specification): the State issues a Modification Order in accordance with clause 35.5(c)(i) for the repair or reinstatement in respect of a Modification Request issued by the State in accordance with clause 42.3(b), in which case, Project Co's or the State's entitlement for that part of the Project Asset that is required to be repaired or reinstated to the different design specifications or standards will be the difference between:
(i) the cost of repair or reinstatement to the different design specifications or standards (taking into account any Savings to Project Co as a result of not repairing of rebuilding to the then current specifications and standards); and
(ii) the cost of repair or reinstatement to the then current specifications and standards,
and such amount and any change to the Service Requirements or Services as a consequence of the repair or reinstatement to the different design specifications or standards will be calculated and determined in accordance with clause 35 and the Change Compensation Principles as if the relevant loss or damage was a State Initiated Modification.