A Partnerships Victoria project deed generally gives the government party the right to invoke a default provision if the private party fails to meet its contractual obligations in a material way. While it is fundamental that a Partnerships Victoria project be treated as a mutually beneficial relationship between the parties, the government party must adequately prepare for any default by the private party. |
Default processes are clearly documented in project deeds, however exercising those rights is complex and requires careful planning. Contractual issues in relation to default are discussed in detail in the National PPP guidelines: commercial principles for social infrastructure (Chapter 24) and National PPP guidelines: commercial principles for economic infrastructure (Chapter 23) (as applicable) and the Partnerships Victoria standard project deed guidance notes.
If a situation arises in which activating the default process may be an appropriate response, a default plan should be developed, if appropriate in conjunction with (and possibly as part of) the service interruption response and step-in plans for the project. The details of the default plan will significantly depend upon the nature and circumstances of the default event.