(a) (State elects to conduct a tender): If the State elects to conduct a tender for the New Contract in accordance with section 3.1(a)(i), sections 3.2 and 3.3 will apply.
(b) (Object of Tender Process): The objective of the Tender Process is to establish a Highest Compliant Tender Price.
(c) (Calculation of Default Termination Payment): The Default Termination Payment will be calculated as follows:
TP = A - C - D - E - F - G - H + J - M
where:
TP = the Default Termination Payment;
A = the Highest Compliant Tender Price. In determining item A, the Tender Process must:
A. assume:
1) a Compensation Date determined under paragraph (a)(ii) of that definition (which will be subject to adjustment to reflect the actual date on which the Compensation Date occurs);
2) that the Project Activities are carried out in accordance with, and to the standards set out in, the PSDR and otherwise in accordance with this Deed;
3) that the provisions with respect to payment of the State Contributions, Floating Rate Component and Service Payments continue to apply as provided for in this Deed;
4) that any breach of this Deed and any deductions for Abatements occurring prior to the Compensation Date will be disregarded for the purposes of the New Contract; and
5) that the Project Documents will be amended as required to reasonably allow for an incoming provider to carry out the Project Activities in accordance with, and to the standards set out in, the PSDR and otherwise in accordance with this Deed; and
B. take into account:
1) the costs (if any), and their timing, which are required to be incurred to complete the Works in accordance with this Deed and to achieve Commercial Acceptance;
2) the reinstatement or repair costs (if any) and their timing, including a reasonable contingency against Project risks, which are required to be incurred with respect to the Project Assets and the Site, to enable carrying out of the Project Activities until the Final Expiry Date, in accordance with and to the standards set out in the PSDR and otherwise in accordance with this Deed; and
3) any costs, and their timing, required to be incurred to enable the entity (who is to become the new "Project Co") to carry out the Project Activities in accordance with, and to the standards set out in, the PSDR and otherwise in accordance with this Deed and otherwise to perform Project Co's obligations under the Project Documents,
but excluding any costs in relation to which the State will retain the benefit of any retention amount under clause 27.7(l);
C = the Tender Costs;
D = any Liability of Project Co to the State under the State Project Documents, including all amounts in respect of which the State is entitled to exercise a right of set-off under this Deed (but subject to clauses 43.11(c) and (d) (other than clause 43.11(d)(vi)(E)(3)));
E = any additional costs reasonably incurred by the State as a direct result of the Default Termination Event (but subject to clauses 43.11(c) and (d) (other than clause 43.11(d)(vi)(E)(3)));
F = to the extent the aggregate of all Post Termination Quarterly Amounts equates to a negative number, the absolute value of the aggregate of all such amounts calculated under this Deed. For the avoidance of doubt the Default Termination Payment is reduced where the aggregate of all Post Termination Quarterly Amounts equates to a negative number;
G = any gains which have accrued, or will accrue, to Project Co as a result of the termination of this Deed or termination of any other Project Documents;
H = the aggregate of:
i) Insurance proceeds:
A. that would have been received before the Expiry Date but for an Insurance Failure Event and which if so received would have been, or would have been required to be, applied towards any other component of the Default Termination Payment calculated under this section 3; and
B. received or receivable by Project Co at any time during the period between the Expiry Date and the Compensation Date, except for Insurance proceeds:
1) that are required under the Project Documents to be (and are) applied to repairing or reinstating the Works or the Project Assets; or
2) representing Insurance indemnification of Project Co against liabilities to third parties;
(ii) any other amounts owing to Project Co; and
(iii) any credit balances standing in accounts held by or for the benefit of Project Co on the Expiry Date (other than those amounts which Project Co holds on trust for a subcontractor in those accounts in accordance with the Finance Documents),
in each case only to the extent it has not otherwise been taken into account in the determination of the Default Termination Payment under this section 3;
J = any amounts owing by the State to Project Co under the State Project Documents as at the Expiry Date (including amounts of any State Contribution, Floating Rate Component or Service Payments which have accrued but not been paid as at the Expiry Date); and
M = any third party amounts paid to Project Co at any time during the period between the Expiry Date and the Compensation Date.
In calculating items A to M, there will be no double counting of amounts. Without limitation, the value of any unpaid State Contribution may be taken into account in item A paragraph (A)(3) as an amount payable under the New Contract, or in item J as an amount payable to Project Co, but not both.