The following rules for calculating compensation payable (if any) in respect of a Change Compensation Event apply:
(a) (Relief Events): for any Change Compensation Events that are Relief Events, compensation will be calculated subject to clause 43.10(a);
(b) (Insured Risk): for any Change Compensation Events that are Insured Risks, compensation will be calculated subject to clause 43.10(b);
(c) (GST): unless otherwise specifically agreed, any reference in the Change Notice or any other document pursuant to this Schedule to cost, price, value, sales, revenue, rates, fees or a similar amount will be a reference to that amount exclusive of GST;
(d) (Margins): the State will not pay or otherwise compensate Project Co for any Margin of Project Co, the D&C Contractor, the Services Contractor or any other Subcontractor engaged by Project Co for the works or services the subject of the relevant Change Compensation Event (or loss of such Margin) other than for the Agreed Margin and then, only where Project Co is expressly entitled to be paid that Agreed Margin in accordance with Table 1 of these Change Compensation Principles;
(e) (Margin excluded from Base Costs): Base Costs must not include:
(i) any Margin for Project Co, the D&C Contractor, the Services Contractor or any Subcontractor engaged by Project Co to carry out the works or services the subject of the relevant Change Compensation Event; or
(ii) Prolongation Costs, Development Phase Finance Interest or Operational Phase Force Majeure Event Costs.
The Margin payable to a Subcontractor engaged by the D&C Subcontractor, the Services Subcontractor or a Subcontractor engaged by Project Co to carry out the Works or Services the subject of the Change Compensation Event, will be included in the Base Costs payable to the D&C Subcontractor, Services Contractor or Subcontractor engaged by Project Co;
(f) (no Base Costs for Project Co): the additional costs incurred by Project Co for managing the relevant Change Compensation Event or otherwise are included in the Project Co Margin and no costs incurred by Project Co in respect of the Change Compensation Event other than Consultant Costs can be included in the Base Costs unless otherwise agreed by the State;
(g) (Defect rectification): notwithstanding anything else in this Deed, to the extent that Project Co:
(i) is granted an extension of time under clause 26.9 or clause 26.10; or
(ii) is granted relief under clause 32.2 or clause 32.3,
in relation to any of its Defect rectification obligations, Project Co will not be entitled to any compensation under these Change Compensation Principles;
(h) (reasonably and properly incurred): it is a condition precedent to Project Co's entitlement to the payment of any Base Costs, Prolongation Costs, Development Phase Finance Interest or Operational Phase Force Majeure Event Costs under these Change Compensation Principles that such costs were or will be reasonably and properly incurred by the relevant party to whom the costs are payable;
(i) (Pricing options): The State may require the relevant Change Compensation Event to be priced and paid for in accordance with one of the following options (and may accordingly require Project Co to price the Change Compensation Event in the Change Notice using one or more of the following options):
(i) fixed price - whereby, the State must pay Project Co, or Project Co must pay the State, a fixed amount, irrespective of the Costs actually incurred by Project Co or its Associates in respect of the Change Compensation Event;
(ii) capped price - whereby the State must pay Project Co, or Project Co must pay the State, the lesser of the amount(s) specified in the Change Response and the amount(s) of actual Base Costs incurred, plus any applicable Agreed Margin calculated in accordance with section 3 or section 4 (as applicable) of these Change Compensation Principles;
(iii) reimbursable cost - whereby the State must pay Project Co, or Project Co must pay the State, the Base Costs incurred or that will be incurred, plus any applicable Agreed Margin calculated in accordance with section 3 or section 4 (as applicable) of these Change Compensation Principles; or
(iv) any other option agreed by Project Co and the State,
in which case, sections 7.2(j) to 7.2(m) will apply.
(j) (Project Co request): Before preparing a Change Notice in respect of an event for which the State may require the relevant Change Compensation Event to be undertaken in accordance with one of the options referred to in section 7.2(i), Project Co must ask the State which of those options the State would like Project Co to adopt for inclusion in the Change Notice.
(k) (State Response): Provided the State responds within 2 Business Days of any request referred to in section 7.2(j), Project Co must:
(i) include in its Change Notice all details relevant to the option requested by the State; and
(ii) calculate the amount payable for the Change Compensation Event under section 3 or section 4 (as applicable) in accordance with the State's response.
(l) (Minor Modifications): Where the Change Compensation Event is a Minor Modification, Project Co will calculate the amount payable to it in accordance with clause 35.13(d) using one or more of the above options referred to in section 7.2(i) where requested by the State to do so.
(m) (Default position): If the State does not respond in accordance with section 7.2(k), or does not make a request in accordance with clause 7.2(i), Project Co may calculate the amount payable on a reimbursable cost basis in accordance with section 3 or section 4 (as applicable) of these Change Compensation Principles and the relevant terms of the Deed.
(n) (Key Subcontractors and Competitive Tender): where:
(i) Project Co is required to conduct a Tender Process in accordance with these Change Compensation Principles for the relevant Change Compensation Event in accordance with section 9; and
(ii) the D&C Contractor or Services Contractor is the successful respondent in the Tender Process,
the Margin charged by the D&C Contractor or the Services Contractor (as applicable) for the work or services the subject of the relevant Change Compensation Event cannot exceed the applicable Construction Margin or Services Margin set out in Table 2 or 3;
(o) (Corporate financing or financial administration costs excluded from Base Cost): Base Costs must exclude any costs related to movements in working capital, or costs related to drawing on corporate debt facilities generally;
(p) (Uninsurable risks): where Insurance proceeds would have been payable in respect of an event for which Project Co is entitled to compensation in accordance with Table 1, but the event is an Uninsurable Risk, the amount payable by the State will not, in the aggregate, exceed the amount that is equal to the insurance proceeds that would have been payable under the relevant Insurances that would have applied had the event continued to be insurable under those Insurances; and
(q) (Modification Proposal): the Consultant Costs payable for the preparation of a Modification Proposal, subject to any agreement between the parties or direction by the State in accordance with clause 35.3(c), must be calculated in accordance with section 7.1. If the State directs Project Co to proceed with a Modification for which a Modification Proposal has been prepared, the calculation of the amount payable for that Modification in accordance with these Change Compensation Principles excludes the amount payable for the preparation of the relevant Modification Proposal.