The Change Procedure provisions were incorporated into the PPP contracts to provide an in built mechanism to allow Authorities to change the facilities and services over time. Accordingly, the extent of grounds for objection (i.e. a Project Co being entitled to refuse outright to carry out a Variation) are limited.
An example, taken from the NPD/hub Contract, relating to High Value Changes, is
1.2 "DBFM Co shall be entitled to refuse a High Value Change that:
1.2.1 requires the Works and/or the Services to be performed in a way that infringes any law or is inconsistent with Good Industry Practice;
1.2.2 would cause any Consent to be revoked (or would require a new consent to be obtained to implement the relevant change in the Works and/or the Services which, after using reasonable efforts, DBFM Co has been unable to obtain);
1.2.3 would materially and adversely affect DBFM Co's ability to deliver the Works and/or the Services (except those Works and/or Services which have been specified as requiring to be amended in the High Value Change Notice) in a manner not compensated pursuant to this Section 4 (High Value Changes);
1.2.4 would materially and adversely affect the health and safety of any person;
1.2.5 would, if implemented, materially and adversely change the nature of the Project (including its risk profile);
1.2.6 is the subject of a High Value Change Notice that cannot reasonably be complied with;
1.2.7 the Authority does not have the legal power or capacity to require implementation of; or
1.2.8 would if implemented adversely affect the enforceability or priority of the security held by or on behalf of the existing Senior Lenders."
We would expect that, in practice these are unlikely to be applicable to Changes to assist in the pathway to NZ, though requests for Changes are likely to require senior lenders consent in most cases (see below) and there is protection for Project Co and the other private sector parties in the provisions relating to required amendments to the Project Agreement and Project Documents (see below).
It is also worth noting that once a formal Change Procedure has been processed to the point where there is an instruction from the Authority to proceed (on the basis of the arrangements agreed through the Change process, Project Co is under a duty to implement that Change on the basis agreed.