(a) In circumstances where Project Co is considering submitting an Initial Augmentation Proposal in accordance with this section 2.2, which is not invited by the State, Project Co must meet with the State Representative to explain the proposed Augmentation and must not issue an Initial Augmentation Proposal without first advising the State of its intention to do so at least 20 Business Days prior to issuing the Initial Augmentation Proposal.
(b) Subject to section 2.2(a), Project Co may submit to the State a notice entitled "Initial Augmentation Proposal" which must consist of a business case for the proposed Augmentation which must include:
(i) a description of the proposed Augmentation including any unique characteristics of the proposed Augmentation;
(ii) the party that Project Co proposes will deliver the Augmentation if not Project Co;
(iii) the proposed Proponents, including the Lead Proponent and the Delivery Proponent;
(iv) how the proposed Proponent proposes to run the Augmentation Process and demonstrated ability and team capacity to do so (including a team organisation diagram and details of expertise);
(v) an assessment of the anticipated benefits to users of the Project Assets and the State that the Augmentation is expected to generate, including any supporting evidence, and how the proposed Augmentation is in the public interest and will deliver value for money to the State;
(vi) why the State should undertake the proposed Augmentation as:
A. an Augmentation and not as a Modification (including a Modification proposed by Project Co under clause 35.11);
B. a standard competitive tendering or procurement process; or
C. another procurement process whether or not contemplated in the Project Documents;
(vii) a high level summary of the scope and requirements (including functional, technical, performance, and maintenance requirements and standards) for the Augmentation;
(viii) Project Co's desired timeframe and key milestones for delivery of the proposed Augmentation;
(ix) an assessment of the anticipated impact that the proposed Augmentation is likely to have (both during construction and after completion) on the Project Assets, the Project Activities and users of the Project Assets;
(x) a breakdown between capital expenses and operational expenses of the estimated net costs (net of any cost savings or avoided costs) of the proposed Augmentation;
(xi) how the proposed Augmentation meets a State project or service need, including alignment with policy and budget priorities;
(xii) any market sounding;
(xiii) how the proposed Augmentation will be funded (private or public funds) including, if Project Co proposes to procure equity or debt finance and how Project Co proposes to service any such debt or equity;
(xiv) the commercial aspects of the proposed Augmentation, including a high level description of key risks and their allocation;
(xv) the proposed Augmentation Process Fee;
(xvi) the proposed Augmentation Management Fee;
(xvii) the proposed Augmentation Equity IRR;
(xviii) where any debt finance for the Augmentation will not be sourced from traditional debt markets, the proposed cost of the debt;
(xix) a supporting financial model for the proposed Augmentation which identifies the proposed Augmentation Management Fee, Augmentation Process Fee and Augmentation Equity IRR;
(xx) the required level of State support for the proposed Augmentation (financial and otherwise and whether direct and indirect);
(xxi) details of any consultation undertaken with key State stakeholders in respect of the proposed Augmentation and any State stakeholder support;
(xxii) any proposed contractual strategy for the proposed Augmentation;
(xxiii) how competition will be incorporated into the Augmentation Process to the maximum extent practicable and where not possible, the reasons why and other methods that will be used to demonstrate value for money to the State in respect of the proposed Augmentation and to what aspects of the proposed Augmentation they will apply, including any applicable Subcontractor Margin;
(xxiv) whether the proposed Augmentation has been considered by the State previously;
(xxv) aspects of the proposed Augmentation considered to be the subject of or to contain Intellectual Property Rights;
(xxvi) a declaration of any potential or actual conflicts of interest, including all contact between:
A. Project Co, the proposed Proponents, any Project Co Associates or any proposed Proponent Associates; and
B. the State, State Associates or other officials in respect of the proposed Augmentation;
(xxvii) [how the proposed Augmentation meets the Project objectives]; [Note: Include if Project Objectives are provided in the RFP. If included, Project Objectives will need to be defined.] and
(xxviii) any other information necessary or reasonably required by the State to allow the State to conduct an initial assessment of the merits of the proposed Augmentation,
(together the Initial Augmentation Proposal).
(c) Following receipt of an Initial Augmentation Proposal, in addition to its rights under section 4(a), the State may do one or more of the following:
(i) require Project Co to enter into and procure that the Proponents, any relevant Project Co Associates, and any relevant Proponent Associates (as reasonably nominated by the State) enter a deed substantially in the form of the Probity and Process Deed within 10 Business Days after receipt of any such request from the State;
(ii) seek further information or clarification from Project Co to determine whether to proceed with the proposed Augmentation and Project Co must provide, or procure that the relevant Proponent, Project Co Associate or Proponent Associate provides, any such information or clarification as reasonably required by the State within 10 Business Days after receipt of any such request from the State; and
(iii) require Project Co to prepare or assist the State to prepare a business case for the Augmentation to the level of detail typically required by the State for Partnerships Victoria projects and Project Co must prepare, or assist the State to prepare, that business case as reasonably required by the State.