Between Transit New Zealand Alliance · PDF fileProject Alliance Agreement. ... Set policy and...

Project Alliance Agreement (PAA) Between

Transit New Zealand

[name of constituent organisation] [name of constituent organisation] [name of constituent organisation]

For the design, construction and commissioning of the

PPrroojjeecctt NNaammee

NOTES: This document is proposed as a starting point for development of the eventual Project Alliance Agreement. Proponents are requested to give constructive feedback on this draft PAA in their written submissions (refer section 6.1 of RFP). The key elements of the IPAA will be agreed with the preferred proponent. The PAA will be developed to final form during the PAAt Based on a template used on some alliances in Australia, it caters for the situation where there is one constructor organisation and one designer organisation. The final form of the PAA will be revised to suit the structure of the preferred proponent. While Transit supports the general principles and the commercial arrangements embodied within this draft, Transit has not yet undertaken a thorough review of the document. A

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Full Delivery For Early Completion Project Name Transit Contract No. Contract Number PAA Issue (draft 1)

Contract Number & Name SM031 App D4 Issue 4: March 2008 D4-FD-PAA-Trial 4 Page PAA 1 Printed: 25/02/2009

Project Alliance Agreement

Table Of Contents Project Alliance Agreement


Names Of Parties / Background 3 Part A: Roles, Responsibilities And Behaviours 4 1 Overriding Commitments 4 2 Primary Performance Obligations 4 3 Project Alliance Board ("PAB") 5 4 Resolution of Disagreements 6 5 Project Alliance Management Team 7 6 Assignment 8 Part B: Performance Of The Work 9 7 Project Management Plan 9 8 Possession And Care 9 9 Quality of Services and Products 10 10 Health and Safety 11 11 Environmental Management 12 Part C: Commercial Arrangements 13 12 Compensation to OAP1 & OAP2 13 13 Goods and Services Tax 13 14 Invoices and Payments 13 15 Audit of Financial Transactions 15 16 Insurances 16 17 Changes and Variations 19 18 Title and Ownership 20 19 Not used 20 Part D: Time, Progress & Completion 21 20 Time And Progress 21 21 Completion Certificates 21 Part E: Default 23 22 Termination Of Work For Convenience 23 23 Termination of Work for Default 24 Part F: Information & Communication 26 24 Intellectual Property 26 25 Confidentiality / Public Statements 26 26 Formal Written Notices 26 Part G: Interpretation 28 27 Interpretation 28 Part H: Signature Page 29 Schedule 1: Definitions 30 Schedule 2: Scope Of The Alliance Works 34 Schedule 3: Alliance Charter 35 Schedule 4: Requirements & Minimum Standards 36 Schedule 5: Organisation Chart 37 Schedule 6: Materials To Be Provided By Transit 38 Schedule 7: Terms Of Compensation 39 Schedule 7: Terms Of Compensation - Appendix 1 45 Schedule 8: Progress Payment Certificate 46 Schedule 9: Practical Completion Payment Certificate 47 Schedule 10: Final Payment Certificate 48 Schedule 11: Variation Notice / Approval 49 Schedule 12: Certificate Of Practical Completion 50 Schedule 13: Certificate Of Final Completion 51 Schedule 14: Annexure 52


Names of Parties / Background


Names Of Parties / Background

This Project Alliance Agreement (“PAA’) is made on <<<Day, Date, Month, Year>>> between Transit New Zealand of <<insert address details>> (“Transit”) and OTHER ALLIANCE PARTICIPANT 1 (a constructor) of <<insert address details>> (“Other Alliance Participant 1” or “OAP1”) and OTHER ALLIANCE PARTICIPANT 2 (a designer) of <<insert address details>> (“Other Alliance Participant 2” or “OAP2”) Background a) Background information on the Project. b) The parties entereed into an Interim Project Alliance Agreement dated <<<Date>>>

whereby OAP1 and OAP2 undertook pre-construction activities associated with the Project.

c) Having agreed on a Target Cost and other risk:reward parameters for the Project the Alliance Participants wish to enter into an alliance for the fdull delivery of the Project under the terms set out in this PAA.

d) In this PAA words and expressions not otherwise defined in the main text of this PAA will have the meanings assigned to them in Schedule 1, except where the context requires otherwise.


Part A: Roles, Responsibilities And Behaviours



The Alliance Participants agree as follows:

1 Overriding Commitments 1.1 Commitment to Alliance Principles 1.1.1 The Alliance Participants hereby commit to work together in a manner so as to

achieve the successful delivery of the Alliance Works. 1.1.2 The Alliance Participants have developed, committed to and signed off on the

Alliance Charter in Schedule 3. The Alliance Participants undertake to adhere to the principles set out in the Alliance Charter (the “Alliance Principles”).

1.2 Commitment to act in good faith 1.2.1 Each Alliance Participant undertakes to conduct its activities arising out of this PAA

in good faith. Acting in good faith in this case includes: a) Being fair, reasonable and honest; b) Doing all things reasonably expected of it by another Alliance Participant and by

this PAA; c) Not impeding or restricting another Alliance Participant’s performance; and d) Giving as much weight to the interests of the Project as to one’s own self

interest. 2 Primary Performance Obligations 2.1 Alliance Participants collectively 2.1.1 The Alliance Participants collectively shall design, construct, commission and

handover the Alliance Works: a) On or before the Target Completion Date; b) So that they:

• Meet the “Requirements and Minimum Standards” prescribed by Transit as set out in Schedule 4,

• Are free from defects by the Date of Final Completion, • Do not infringe any patent, copyright, registered design, trademark or name

or other protected right; c) In a diligent skilful workmanlike manner; d) In compliance with all applicable laws; e) With the aim at all times of minimising cost expenditure.

2.1.2 OAP1 will provide Staff, Labour, Construction Plant, project management services, subcontracts and Materials (apart from Materials expressly provided by Transit) as necessary to perform the Work under the Alliance.

2.1.3 OAP2 will be the primary provider of Design Services and will provide Staff within the Alliance Management Team referred to in clause 5.1 (“the AMT”).

2.1.4 Transit will be the primary provider of resources to commission the facilities and will provide one or more Staff within the AMT.

2.1.5 Unless expressly stated in this PAA or agreed otherwise Transit and OAP2 will not be obliged to provide any Labour, Construction Plant, subcontracts or Materials.




2.2 Transit’s specific obligations 2.2.1 Transit shall:

a) Provide access to the Site to enable the Alliance Participants to undertake the Work under the Alliance; and

b) Pay the Other Alliance Participants in accordance with the terms of this PAA. 3 Project Alliance Board ("PAB") 3.1 Establishment, duties & authority 3.1.1 The PAB is hereby established with an overall charter to administer this PAA and

provide guidance to the Alliance Participants with respect to the Work under the Alliance.

3.1.2 The Alliance Participants must implement all decisions and directions of the PAB (and of Transit where expressly provided for in this PAA) in respect of the Work under the Alliance given in accordance with this PAA.

3.2 Representation 3.2.1 The PAB will consist of one or more senior representatives from each of the Alliance

Participants (the “PAB Members”). 3.2.2 At the time of execution of this PAA and unless and until advised otherwise by an

Alliance Participant the PAB Members are those persons nominated in the Annexure.

3.2.3 Subject to clause 3.2.4, an Alliance Participant may replace its PAB Member(s) at any time, or nominate a substitute (“Substitute PAB Member”) by giving notice in writing to the other Alliance Participants at least 24 hours prior to the change in representation.

3.2.4 The Alliance Project Manager or acting Alliance Project Manager may not act as a Substitute PAB Member.

3.2.5 In respect of any matter which is within the powers of the PAB as contemplated by this PAA, the individual PAB Members (and their Substitute PAB Members) are hereby authorised to bind the Alliance Participant they represent to the decisions of the PAB.

3.3 Voting and decision-making protocols 3.3.1 All decisions by the PAB will be by vote as follows:

a) Each PAB Member (or Substitute PAB Member) will be entitled to cast a vote. b) All votes must be cast. c) Every decision by the PAB must be unanimous – i.e. it must be supported by all

PAB Members. 3.4 Duties of the PAB 3.4.1 The duties of the PAB are to:

a) Set policy and give philosophical and strategic direction for the alliance within the boundaries set out in this PAA.

b) Appoint persons to the AMT, monitor the performance of the AMT and implement appropriate measures to correct undesirable trends.




c) Set, review and revise limits of delegated authority as appropriate. d) Issue various directions, approvals and decisions as required by this PAA. e) Initiate and/or approve the commitment of resources to the Project and provide

corporate support as necessary. f) Resolve any differences / issues that are referred to it. g) Provide leadership and set a visible example for all to see of the Alliance

Principles in action at a senior level. 3.5 Meetings of the PAB 3.5.1 Prior to the Date of Practical Completion the PAB will hold a meeting at least every

month. 3.5.2 After the Date of Practical Completion, the PAB will meet as often as is necessary to

enable it to fulfil its duties under this PAA. 3.6 Minutes of meetings 3.6.1 The Alliance Participants will arrange for a secretary (“the PAB Secretary”) who will

attend all PAB meetings. 3.6.2 The PAB Secretary will record all resolutions of the PAB and all actions arising out

of each PAB meeting. 3.6.3 The PAB Secretary will issue copies of the “Resolution & Action Notes” by e-mail or

fax to each PAB Member, to the Alliance Project Manager, the External Alliance Auditor and others as appropriate within 2 days after each PAB meeting.

4 Resolution of Disagreements 4.1 Procedure for handling disagreements 4.1.1 The Alliance Participants will try to settle any Alliance Disagreement in good faith in

a manner consistent with the Alliance Principles. 4.1.2 If despite their efforts, an Alliance Disagreement remains unresolved, an Alliance

Participant, if it wishes to pursue the matter, may give a written notice to each of the other Alliance Participants requesting that the Alliance Disagreement be considered by the PAB.

4.1.3 The PAB will consider any Alliance Disagreement referred to it and will give due consideration to submissions by all Alliance Participants, to any recommendation by the Alliance Project Manager in respect of the Alliance Disagreement and to any other relevant information.

4.2 No arbitration or litigation 4.2.1 Except as provided in clause 4.2.2 below it is the intention of the Alliance

Participants: a) that the PAB will deal with any Alliance Disagreement and the Alliance

Participants will do their utmost to ensure that the PAB is able to fulfil this crucial function effectively and efficiently; and

b) that there will be no arbitration or litigation between the Alliance Participants on any Alliance Disagreement.




4.2.2 A failure by any Alliance Participant to perform any obligation or to discharge any duty under or arising out of this PAA will not give rise to any enforceable obligation at law or in equity whatsoever save and except to the extent that the failure also constitutes an Event of Default.

5 Project Alliance Management Team 5.1 Organisation Chart 5.1.1 The day-to-day management of the Work under the Alliance will be by an Alliance

Management Team (“the AMT”) made up of persons from the Alliance Participants, selected on a “best-for-Project” basis.

5.1.2 The AMT will be headed by the Alliance Project Manager. 5.1.3 Unless agreed otherwise by the PAB the AMT will be structured along the lines set

out in the Organisation Chart in Schedule 5. 5.2 Appointment of Alliance Project Manager 5.2.1 The Alliance Project Manager is the person nominated as such in the Organisation

Chart. 5.2.2 The PAB may remove or replace the Alliance Project Manager at any time. 5.2.3 The PAB may:

a) Appoint a person to act as Alliance Project Manager on an interim basis during any period in which the Alliance Project Manager is unavailable; and/or

b) Make different appointments for different stages of the Work. 5.2.4 The Alliance Project Manager or acting Alliance Project Manager will report to the

PAB and attend PAB meetings as required by the PAB but will have no voting rights.

5.3 Duties of Alliance Project Manager 5.3.1 The Alliance Project Manager will be responsible to the PAB and will carry out the

duties of the Alliance Project Manager set out below and as directed by the PAB. 5.3.2 The Alliance Project Manager must act within the prescribed financial and other

limits as advised by the PAB. Items or decisions outside those delegated limits must be referred to the PAB for a decision.

5.3.3 The Alliance Project Manager will be accountable for ensuring that the “objectives” set out in the Alliance Charter in Schedule 3 are achieved.

5.3.4 The Alliance Project Manager will be responsible for: a) Day-to-day management of the AMT such that the Work under the Alliance is

carried out in accordance with the requirements set out in this PAA or as otherwise directed by the PAB;

b) Implementing the directions and decisions of the PAB. c) Issuing a Weekly Report to the PAB Members each week by e-mail in the

format prescribed by the PAB. d) Issuing a Monthly Report to the PAB Members, and the External Alliance

Auditor by e-mail in the format and on the day prescribed by the PAB. e) Attending PAB meetings as required by the PAB.




f) Providing leadership to the AMT and setting an example of the Alliance Principles in action.

g) Other duties as directed from time to time by the PAB. 5.3.5 The Alliance Project Manager will consult with the other leaders within the AMT and

make every reasonable effort to arrive at a consensus on all matters affecting the Work under the Alliance. However there is no requirement that the decisions and directions of the Alliance Project Manager must have the full support of all members of the AMT.

6 Assignment 6.1.1 No Alliance Participant may assign any of its rights, obligations or interest in this

PAA to any person or company without the prior written consent of the other Alliance Participants.


Part B: Performance Of The Work



7 Project Management Plan 7.1.1 The Alliance Participants have already prepared a draft Project Management Plan

(“PMP”). 7.1.2 The Alliance Project Manager will submit a proposed final version of the PMP for

approval by the PAB in the first PAB meeting following the execution of this PAA. 7.1.3 The final PMP will:

a) Set out key policies relating to the Work under the Alliance; b) Specify the delegated limits of financial and general authorities and the protocols

for review and change of those delegated limits. c) Include detailed plans / procedures for the management of all key aspects of the

Work under the Alliance including, but not limited to the following plans: • Design Management Plan • Site Establishment Plan • Construction Plan including schedule • Commissioning Plan • Project Systems Plan • Finance and Administration Plan • Health & Safety Plan • Quality System Plan • Environmental Management Plan • Procurement Plan • Stakeholder Management Plan

d) Specify what aspects of the PMP can be amended by the Alliance Project Manager and what aspects can only be amended by the PAB.

7.1.4 The Alliance Participants will at all times adhere to the procedural and other requirements stated in the PMP as amended from time to time, including all the various Plans that are embodied within the PMP.

8 Possession And Care 8.1 Possession of Site 8.1.1 Transit will give the Alliance Participants sufficient possession of the Site to enable

the Alliance Participants to perform the Work under the Alliance in accordance with this PAA.

8.1.2 Any delay by Transit in giving the Alliance Participants possession of the Site will not be a breach of this PAA, but may be grounds for a Variation in accordance with clause 17.2.1.

8.2 Demobilisation and clean-up 8.2.1 The Alliance Participants will maintain the Site in a safe, clean and tidy condition. 8.2.2 Upon completing the Work under the Alliance and prior to the issue of the Certificate

of Practical Completion, the Alliance Participants will:




a) remove all Construction Plant, buildings and other temporary structures and all equipment, surplus materials and rubbish from the Site; and

b) leave the whole of the Alliance Works in a safe, clean and tidy condition to the satisfaction of Transit.

8.3 Care of the Alliance Works 8.3.1 The Alliance Participants will be responsible for the care, safety, protection, security,

maintenance, repair, reinstatement and clean-up after use, of the Alliance Works from the date of execution of this PAA until the Date of Practical Completion.

8.3.2 Subject to clause 9.5, Transit will be responsible for the care of the Alliance Works after the Date of Practical Completion.

8.3.3 Nothing in clause 8.3.2 will lessen the Alliance Participants' obligation to attend to Alliance Defects pursuant to clause 9.5.2.

9 Quality of Services and Products 9.1 General 9.1.1 The Alliance Participants will ensure that the Alliance Works and the Work under the

Alliance are of the highest quality consistent with the requirements of this PAA. 9.1.2 The Alliance Participants will, unless stated otherwise in this PAA, supply everything

necessary for the proper completion of the Work under the Alliance. 9.1.3 The Alliance Participants will ensure that all Materials they provide are:

a) correctly designed, fabricated and installed to the standards set out in this PAA; and

b) suitable for their intended use. 9.1.4 The Alliance Participants will obtain written warranties in favour of Transit from

Suppliers and Subcontractors, to the extent that such warranties are relevant, that Materials are: a) correctly designed, fabricated and installed to the standards set out in this PAA;

and b) suitable for their intended use.

9.2 Quality System Requirements 9.2.1 As part of the PMP the Alliance Participants will establish, implement and maintain a

Quality System Plan in respect of the Work that complies with the requirements of ISO9001.

9.2.2 Each Alliance Participant shall at all times provide each of the other Alliance Participants with full access to all Records connected with the Quality System Plan where such access is necessary for assessment of an Alliance Participant's performance.

9.2.3 The Alliance Participants, individually or collectively, or the Alliance Project Manager may at any time arrange for audits of the Quality System.

9.3 Materials provided by Transit 9.3.1 Schedule 6 contains a list of Materials which it is intended will be provided by

Transit. Schedule 6 gives details of quantities, method of supply and responsibility for transport.




9.3.2 Upon discovering a defect or problem with Materials supplied by Transit the Alliance Participants will immediately notify the Alliance Project Manager and Transit giving details of the defect or problem.

9.4 Inspection and testing 9.4.1 The Alliance Participants will carry out inspection and testing of the Alliance Works

and the Work under the Alliance as required by and in accordance with the requirements set out in this PAA and applicable laws and regulations.

9.4.2 At all times, the Alliance Participants and their authorised nominees will have the right to: a) inspect and test, or witness the inspection or testing of, any and all of the

Materials and workmanship furnished by the Alliance Participants, their Subcontractors, Suppliers, employees, agents and representatives.

b) access the off-Site premises of Suppliers and Subcontractors for the purpose of conducting inspections and testing, to the extent that the subcontract or supply agreement enables such access.

9.5 Defective Work 9.5.1 Transit, the PAB or the Alliance Project Manager may at any time prior to the Date

of Final Completion issue an Alliance Defect notice (“ADN”) directing the Alliance Participants to attend to the rectification of Alliance Defects.

9.5.2 Upon receipt of an ADN the Alliance Participants will rectify the Alliance Defect within the period stated in the ADN and in accordance with any other requirement stated in the ADN.

9.5.3 Transit will be entitled to rectify an Alliance Defect itself or engage others to do the rectification work if: a) Transit considers the rectification must be carried out urgently for safety,

environmental or other reasons of urgency; or b) Transit considers that the Alliance Participants will not be able to undertake the

rectification work in the time and/or manner specified in the ADN. Costs incurred by Transit for rectification work carried out by Transit or a 3rd party under this clause 9.5 will be treated as Transit Alliance Costs.

10 Health and Safety 10.1 General commitment 10.1.1 The Alliance Participants will make every reasonable effort to provide and maintain

a workplace free of accidents and injuries. 10.2 Compliance 10.2.1 The Health & Safety Plan (“H&S Plan”) which forms part of the PMP shall be

consistent with the requirements of relevant legislation. 10.2.2 In carrying out the Work under the Alliance the Alliance Participants will ensure that

they comply with: a) the latest H&S Plan approved by the Alliance Board; b) all relevant legislation including regulations in force under that legislation;




c) all reasonable safety directives, procedures and work instructions issued by the Alliance Project Manager, and/or the authorised safety officers of Transit, or other authorised personnel.

10.3 Obligations under safety legislation 10.3.1 For the purposes of relevant health and safety legislation each Alliance Participant

will be deemed to be the employer in respect of all operations that are within its control and/or the control of its subcontractors, suppliers, employees and agents.

10.4 Safety audits 10.4.1 The Alliance Project Manager and/or the Alliance Participants, either individually or

collectively, may at any time carry out audits on the H&S Plan and/or the Alliance Participants’ compliance with the Safety Plan.

10.4.2 The Alliance Participants shall provide all documents, access and assistance necessary to facilitate such audits.

10.4.3 If any non-conformance in the H&S Plan is detected, the Alliance Participants shall immediately rectify the non-conformance.

11 Environmental Management 11.1 General commitment 11.1.1 The Alliance Participants undertake to exercise the utmost care to prevent, in the

course of performing the Work under the Alliance, pollution or any damage to the environment.

11.1.2 The Alliance Participants must comply with all reasonable environmental directives and procedures issued by the PAB and/or the Alliance Project Manager.

11.1.3 The Alliance Participants must obtain, comply with, and promptly hand over to Transit any licence or approval required by the Environmental Protection Agency in connection with the Alliance Works.

11.2 Environmental Management Plan 11.2.1 The Environmental Management Plan which forms part of the PMP must be

consistent with all relevant legislation. 11.2.2 The Alliance Participants must not commence any work on Site, apart from survey

work, until the Environmental Management Plan has been approved by the PAB. 11.2.3 The Alliance Participants must at all times comply in all respects with the

Environmental Management Plan.


Part C: Commercial Arrangements



12 Compensation to OAP1 & OAP2 12.1 Terms of compensation 12.1.1 The compensation set out in the Terms of Compensation in Schedule 7 will be the

sole compensation to the Other Alliance Participants for the complete fulfilment of all their obligations under this PAA.

13 Goods and Services Tax 13.1 Interpretation / application 13.1.1 This clause 13 applies if any of the Alliance Participants become liable to pay GST

in relation to any goods or services supplied under this PAA. 13.2 Particulars of GST 13.2.1 For the purposes of each of the various Payment Certificates referred to in clause

14 the Other Alliance Participants will provide the necessary progress billing information to the Alliance Project Manager in a form that constitutes a valid Tax Invoice.

13.2.2 The Alliance Project Manager will provide to Transit all relevant OAP1/OAP2 Tax Invoices so as to enable Transit to claim an Input Tax Credit for GST included in such certificates, as allowable under GST Law.

13.3 Apportionment of Consideration 13.3.1 If any part of the consideration under this PAA is referable to both a Taxable Supply

and anything that is not a Taxable Supply, the Value of any Taxable Supply shall be determined as required by the GST Law.

13.4 Payments to Transit 13.4.1 In the event that OAP1 and/or OAP2 are required to pay an amount to Transit which

constitutes consideration for a Taxable Supply, OAP1 and/or OAP2 shall, at the same time as making the payment which constitutes consideration, reimburse Transit for the amount of Transit’s GST liability and Transit shall at that time issue to OAP1 and/or OAP2 a Tax Invoice in the correct form.

14 Invoices and Payments 14.1 General 14.1.1 An Alliance Participant who owes money to another Alliance Participant pursuant to

this PAA will pay the other Alliance Participant interest compounded daily using the annual rate of interest stated in the Annexure for any time the payment remains overdue.

14.1.2 The amounts to be included in the various payment certificates referred to in this clause 14 will be calculated in accordance with the formulae in clause S7-9.

14.2 Prior to Practical Completion 14.2.1 At the times or periods specified in the Annexure the Alliance Project Manager will,

with input from the Alliance Participants, prepare and submit a Progress Payment Certificate to Transit for an amount calculated in accordance with clause S7-9.1, in the form set out in Schedule 8 with the declaration in Part 2 signed by the External Alliance Auditor, and accompanied by:




a) A valid Tax Invoice for OAP1; and b) A valid Tax Invoice for OAP2.

14.2.2 Within the time specified in the Annexure Transit will pay the Other Alliance Participants the amounts certified in the Progress Payment Certificate.

14.2.3 All progress payments will be deemed to be provisional payments on account and subject to a final verification audit by the External Alliance Auditor.

14.3 After Practical Completion 14.3.1 Within the number of days specified in the Annexure after the Date of Practical

Completion Transit will ensure that the External Alliance Auditor: a) Conducts a comprehensive audit of OAP1, OAP2 and Transit Records to

determine the amount payable to/from OAP1/OAP2 pursuant to clause S7-9.2; and

b) Discusses his findings with the Alliance Project Manager; and c) Submits a detailed audit report to the PAB and Transit; and d) Together with the Alliance Project Manager, prepares Part 1 of a Practical

Completion Payment Certificate in the form set out in Schedule 9 and submits it to the PAB for approval.

14.3.2 Within the number of days specified in the Annexure after the PAB receives the partially completed Practical Completion Payment Certificate: a) the PAB will make a determination of the amounts owing to or owed by Transit

as the case may be; and b) the PAB Members will correct Part 1 as necessary and sign Part 2 of the

Practical Completion Alliance Payment Certificate. 14.3.3 Within 14 days after the PAB Members have signed the Practical Completion

Payment Certificate: a) Transit will make payments to OAP1 and/or OAP2; or b) OAP1 and/or OAP2 will make payments to Transit, as the case may be in accordance with the Practical Completion Payment Certificate.

14.4 Final Alliance Payment 14.4.1 Transit will ensure that within the number of days specified in the Annexure after

the Date of Final Completion the External Alliance Auditor: a) Conducts a comprehensive final audit of OAP1, OAP2 and Transit Records to

determine the amount payable to/from OAP1/OAP2 pursuant to clause S7-9.3; b) Discusses his findings with the Alliance Project Manager; c) Submits a detailed audit report to the PAB and Transit; and d) Together with the Alliance Project Manager, prepares Part 1 of a Final Payment

Certificate in the form set out in Schedule 10 and submits it to the PAB for approval.

14.4.2 Within the number of days specified in the Annexure after the PAB receives the partially completed Final Alliance Payment Certificate:




a) The PAB will make a final determination of the amounts owing to or owed by Transit as the case may be; and

b) The PAB Members will correct Part 1 as necessary and sign Part 2 of the Final Payment Certificate.

14.4.3 Within 14 days after the PAB Members have signed the Final Payment Certificate: a) Transit will make payments to OAP1 and/or OAP2; and/or b) OAP1 and/or OAP2 will make payments to Transit, as the case may be, in accordance with the Final Payment Certificate.

14.4.4 The payments made in accordance with the Final Payment Certificate will be deemed to be in full and final settlement of all entitlements to compensation arising pursuant to the Terms of Compensation in Schedule 7, unless a further payment becomes due under clause 16.7 below.

15 Audit of Financial Transactions 15.1 General 15.1.1 The Alliance Participants acknowledge that it is of paramount importance to Transit

that all commercial aspects of this PAA are administered in a transparent manner that demonstrates to all Alliance Participants that all payments made under this PAA are in accordance with the terms of this PAA.

15.2 External Alliance Auditor 15.2.1 The person or company nominated in the Annexure has been appointed by Transit

as the External Alliance Auditor and the Alliance Participants hereby accept that person or company as the External Alliance Auditor.

15.2.2 The External Alliance Auditor's overriding brief from Transit is to ensure in respect of all payments made pursuant to this PAA that Other Alliance Participants receive their exact entitlement as set out in Schedule 7.

15.2.3 Transit will ensure that any reports or advice from the External Alliance Auditor that raise concerns about the amounts claimed or reimbursed to OAP1 and/or OAP2 are brought to the attention of the PAB at the next PAB meeting.

15.2.4 Provided it has given prior notice in writing to Other Alliance Participants, Transit may appoint a different person or company to be the External Alliance Auditor.

15.2.5 References in this PAA to the External Alliance Auditor will include the authorised representatives of the External Alliance Auditor.

15.3 Audit of OAP1 & OAP2 Records 15.3.1 Until such time as all payments under this PAA have been made, the External

Alliance Auditor will have access at all reasonable times to the personnel and Records of Other Alliance Participants that are related to the compensation received by or due to Other Alliance Participants pursuant to this PAA.

15.3.2 The External Alliance Auditor will have the right to reproduce any of the Records referred to in clause 15.3.1.

15.3.3 The costs incurred by Transit pursuant to this clause 15.3 will not be considered to be Transit Alliance Costs for the purposes of this PAA, regardless of the findings of the audit.




15.4 Audit of Transit’s Records 15.4.1 If either OAP1 or OAP2 wishes to carry out an audit of any of Transit’s Records

related to the amounts due to OAP1/OAP2 under this PAA, it will engage the External Alliance Auditor to conduct the audit on its behalf.

15.4.2 If the External Alliance Auditor declines or is unable to undertake an audit of Transit’s Records on behalf of OAP1 or OAP2 then OAP1/OAP2 may engage an Alternative Auditor to undertake the audit.

15.4.3 Until such time as all payments under this PAA have been made the External Alliance Auditor or the Alternative Auditor will have access at all reasonable times to the personnel and Records of Transit that are related to the compensation received by or due under this PAA to the Alliance Participant that commissioned the audit.

15.4.4 The External Alliance Auditor or the Alternative Auditor will have the right to reproduce any of the Records referred to in clause 15.4.3.

15.4.5 The costs incurred by OAP1/OAP2 in carrying out an audit of Transit’s Records including the costs of engaging the External Alliance Auditor and/or an Alternative Auditor will not be reimbursed regardless of the outcome of the audit.

15.5 Retention of Records 15.5.1 Without limiting an Alliance Participant’s obligations at law, the Alliance Participants

will preserve and maintain in good condition and in an easily accessible filing and retrieval system all Records until such time as all payments under this PAA have been made.

16 Insurances 16.1 Insurance of the Works 16.1.1 Before the Alliance Participants commence any physical work on Site the Alliance

Participant nominated in the Annexure will take out a contract works insurance policy (the “CWI policy”) covering the Alliance Works against loss or damage resulting from any cause whatsoever until the Date of Final Completion.

16.1.2 Unless agreed otherwise by the PAB: a) The CWI policy must comply with the specific requirements set out in this clause

16.1; and b) The terms of the CWI policy must be consistent with the terms of the draft

contract works insurance policy appended to this PAA. 16.1.3 The CWI policy shall be effected with an insurer approved by the PAB. 16.1.4 The CWI policy shall be in the joint names of the Alliance Participants and shall

cover Transit, the Other Alliance Participants and all Subcontractors employed from time to time in relation to the Alliance Works for their respective rights, interests and liabilities.

16.1.5 The CWI policy shall cover the care of the Works and things in storage off Site and in transit to the Site.

16.1.6 The CWI policy shall be for an amount in respect of any one occurrence not less than the sum stated in the Annexure.

16.1.7 The excess under the CWI policy shall be no more than the amount stated in the Annexure.




16.2 Public liability insurance 16.2.1 The Alliance Participant nominated in the Annexure shall take out a public liability

policy of insurance in the joint names of Transit, the Other Alliance Participants before the Alliance Participants commence any Work under the Alliance that might give rise to an entitlement to claim under that policy.

16.2.2 Unless agreed otherwise by the PAB: a) The public liability policy must comply with the specific requirements set out in

this clause 16.2; and b) The terms of the public liability policy must be consistent with the terms of the

draft public liability insurance policy appended to this PAA. 16.2.3 The public liability policy shall be effected with an insurer approved by the PAB. 16.2.4 The terms of the public liability policy must be approved by the PAB, and unless

agreed otherwise the public liability policy shall meet the specific requirements set out in this clause 16.2.

16.2.5 The public liability policy shall, in relation to the Work under the Alliance: a) Cover the Alliance Participants for their respective rights and interests and

liabilities to 3rd parties; and b) Cover all Subcontractors employed from time to time by the Alliance Participants

for their respective rights and interests and their liabilities to 3rd parties in regard to all Work under the Alliance carried out by those Subcontractors on or adjacent to the Site; and

c) Cover each Alliance Participant’s liability to each of the other Alliance Participants for loss of or damage to property (other than property required to be insured by clause 16.1) and the death of or injury to any person (other than liability which is required by law to be insured under a workers compensation policy of insurance)

from the date of this PAA until the Date of Final Completion. 16.2.6 The public liability policy shall be for an amount in respect of any one occurrence

not less than the sum stated in the Annexure. 16.2.7 The excess under the public liability policy shall be no more than the amount stated

in the Annexure. 16.2.8 Subject to clause 16.2.9 below, each Alliance Participant (“the Indemnifier”) agrees

to indemnify each of the other Alliance Participants (each an “Indemnified Participant”) against claims by a 3rd party against the Indemnified Participant in respect of: a) Personal injury including death, disease and mental as well as bodily injury; or b) Death; or c) Loss of or damage to any property arising out of or as a consequence of the carrying out by the Indemnifier of the Work under the Alliance.




16.2.9 The Indemnifier’s liability to indemnify an Indemnified Participant under clause 16.2.8 above shall be reduced proportionally to the extent that an act or omission of the Indemnified Participant, or employees or agents of the Indemnified Participant, may have contributed to the loss, damage, death or injury.

16.3 Professional Indemnity Insurance 16.3.1 Before the Alliance Participants commence any Work under the Alliance that might

give rise to a claim for breach of professional duty, the Alliance Participant nominated in the Annexure shall take out a professional indemnity policy of insurance (“the PI policy”) covering OAP1, OAP2 and Transit for: a) Their legal liability to 3rd parties for breach of professional duty arising out of the

Work under the Alliance; and b) Loss or damage suffered by the Alliance Participants as a result of the acts

errors or omissions of any of the Alliance Participants. 16.3.2 To the extent that OAP1 or OAP2 incurs additional cost in procuring the PI policy

that it would not have incurred in the course of its normal business operations, that additional cost will be treated as a limb 1 reimbursable item pursuant to Schedule 7.

16.3.3 Unless agreed otherwise by the PAB: c) The PI policy must comply with the specific requirements set out in this clause

16.3; and d) The terms of the PI policy must be consistent with the terms of the draft

professional indemnity insurance policy appended to this PAA. 16.3.4 The PI policy shall be effected with an insurer approved by the PAB. 16.3.5 The terms of the PI policy must be approved by the PAB, and unless agreed

otherwise the PI policy shall meet the specific requirements set out in this clause 16.3.

16.3.6 The PI policy shall be maintained until the date of Final Completion and for a run-off period beyond the Date of Final Completion as stated in the Annexure.

16.3.7 The PI policy shall be for an amount in respect of any one occurrence not less than the sum stated in the Annexure.

16.3.8 The excess under the PI policy shall be no more than the amount stated in the Annexure.

16.4 Insurance of employees 16.4.1 Each Alliance Participant shall maintain insurances until the Date of Final

Completion against liability for death of or injury to its employees including liability by statute and at common law.

16.4.2 OAP1’s employee insurance policy and OAP2’s employee insurance policy shall each be extended to indemnify Transit for Transit’s statutory liability to persons employed by the Other Alliance Participants.

16.4.3 The Alliance Participants shall ensure that every Subcontractor is similarly insured. 16.5 Insurance of vehicles / equipment 16.5.1 Each Alliance Participant will take out and maintain appropriate insurances until the

Date of Final Completion for any vehicles and/or equipment that it utilises in carrying out the Work under the Alliance.




16.5.2 The cost of such insurances and the risk of any excesses associated with claims under those policies will be deemed to be included in the rates reimbursed to the Other Alliance Participants for vehicles and/or items of equipment that they provide.

16.6 Notices of potential claims 16.6.1 The Alliance Participant(s) responsible for taking out and maintaining the CWI,

public liability and/or PI policies shall, as soon as practicable, inform Transit and the PAB in writing of any occurrence that may give rise to a claim under any of those policies and shall keep Transit and the PAB informed of subsequent developments concerning the claim.

16.6.2 The Alliance Participants shall ensure that Subcontractors in respect of their operations similarly inform Transit and the PAB.

16.7 Pass through of insurance payouts 16.7.1 To the extent that OAP1 or OAP2 receives payment under either the CWI policy or

the PI policy that reimburses any cost loss or expense that was reimbursed or is reimbursable under this PAA then OAP1/OAP2 shall pass on that payment to Transit in full, and if that payment is received by Transit after the date when all the PAB Members have signed the Final Payment Certificate pursuant to clause 14.4.2, then within a further 21 days Transit shall: a) Arrange for the External Alliance Auditor to recalculate the Final Payment

Certificate to take into account the income received under the policy; and b) Issue further payments to Other Alliance Participants such that the total amounts

paid to Other Alliance Participants under this PAA are in accordance with the recalculated Final Payment Certificate.

16.8 Cross Liability 16.8.1 Any insurance required to be effected by the Alliance Participants in joint names

shall include a cross-liability clause in which the insurer agrees to waive all rights of subrogation or action against any of the persons comprising the insured and for the purpose of which the insurer accepts the term "insured" as applying to each of the insureds as if a separate policy of insurance had been issued to each of them (subject always to the overall sum insured not being increased thereby).

17 Changes and Variations 17.1 Power to direct Changes 17.1.1 Either Transit or the PAB may direct a Change and the Alliance Participants will

comply with any such direction. 17.2 When is a Change a Variation? 17.2.1 For the purposes of this PAA, a Change will only be considered to be a Variation if:

a) The PAB decides there is: • a significant increase or decrease in the scope of the Work under the

Alliance; or • a change in the fundamental parameters underlying the design of the

Alliance Works; or b) There is a suspension of the Work under the Alliance pursuant to clause 20.2.1;

or




c) Other circumstances arise which, in the opinion of the PAB justify a Variation. 17.3 Variation approval process 17.3.1 No adjustment to compensation in respect of a Variation will be made unless and

until the PAB has approved the Variation. For this purpose the PAB shall use the form in Schedule 11.

17.3.2 The amounts to be paid to the Other Alliance Participants will be adjusted for Variations in accordance with clause S7-7 in Schedule 7.

18 Title and Ownership 18.1 Transfer of title to goods 18.1.1 All Materials furnished by OAP1 and/or OAP2 and their Suppliers and

Subcontractors in connection with the Work under the Alliance become the property of Transit upon the earlier of the following events: a) Transit pays OAP1 and/or OAP2 for the Materials; or b) The Materials are delivered to the Site.

18.1.2 The Alliance Participants will ensure that the contracts they enter into with Suppliers and Subcontractors are consistent with the provisions of clause 18.1.1.

18.2 Ownership of residual items 18.2.1 All items supplied by Transit will remain the property of Transit regardless of

whether or not they are incorporated into the Alliance Works or consumed in performance of the Work under the Alliance.

18.2.2 Any item for which OAP1 or OAP2 receive reimbursement under clauses S7-2 or S7-3 that is excess to what is required to complete the Work under the Alliance will, prior to Final Completion, be: a) sold to a 3rd party, OAP1 or OAP2, in which case the proceeds of that sale will

be taken into account in calculating the Final Actual Cost under clause S7-8.2; or b) retained by Transit in which case an adjustment will be made when calculating

the Final Actual Cost under clause S7-8.2 as though that item had been sold to a 3rd party at fair market value.

18.3 Liens and encumbrances 18.3.1 The Alliance Participants will ensure that the Alliance Works are free of all liens,

encumbrances and claims of 3rd parties unless Transit has given prior written approval for such liens, encumbrances or claims.

19 Not used


Part D: Time, Progress & Completion



20 Time And Progress 20.1 Progress and handover 20.1.1 The Alliance Participants will take all reasonable steps to undertake and handover

the Alliance Works on or before the Target Completion Date, in accordance with or ahead of the programme embodied in the Project Management Plan.

20.1.2 The PAB may adjust milestones and dates for completion to take account of Variations.

20.2 Suspension of Work 20.2.1 The Alliance Participants will comply with any notice in writing issued by Transit or

the PAB to suspend any portion of the Work. 21 Completion Certificates 21.1 Certificate of Practical Completion 21.1.1 When the Alliance Project Manager considers that the Alliance Works have reached

Practical Completion, the Alliance Project Manager will complete and sign Part 1 of the Certificate of Practical Completion contained in Schedule 12 and issue it to the PAB for consideration.

21.1.2 Within 21 days of receiving the notice referred to in clause 21.1.1 the PAB will consider the Certificate of Practical Completion and will either: a) Complete Part 2 of the Certificate of Practical Completion certifying the Date of

Practical Completion; or b) Issue a list of Alliance Defects which the PAB has decided must be rectified prior

to the issue of the Certificate of Practical Completion. 21.1.3 When the Alliance Project Manager considers that the Alliance Participants have

attended to the Alliance Defects referred to in clause 21.1.2 b) the Alliance Project Manager will issue a further Certificate of Practical Completion to the PAB pursuant to clause 21.1.1, and the process repeated until the PAB issues a completed Certificate of Practical Completion pursuant to clause 21.1.2 a).

21.2 Certificate of Final Completion 21.2.1 When the defects period stated in the Annexure has elapsed after the Date of

Practical Completion, and provided the Alliance Project Manager is not aware of any outstanding Alliance Defects, the Alliance Project Manager will complete and sign Part 1 of the Certificate of Final Completion contained in Schedule 13 and issue it to the PAB for consideration.

21.2.2 Within 21 days of receiving the notice referred to in clause 21.2.1 the PAB will consider the Certificate of Final Completion and will either: a) Complete Part 2 of the Certificate of Final Completion certifying the Date of Final

Completion; or b) Issue a list of Alliance Defects directing the Alliance Participants to rectify those

Alliance Defects.




21.2.3 When the Alliance Project Manager considers the Alliance Participants have attended to the Alliance Defects referred to in clause 21.2.2 b) the Alliance Project Manager will issue a further Certificate of Final Completion to the PAB pursuant to clause 21.2.1 and the requirements of clause 21.2.2 and clause 21.2.1 will continue to apply until the PAB issues a completed Certificate of Final Completion pursuant to clause 21.2.2 a).


Part E: Default


Part E: Default

22 Termination Of Work For Convenience 22.1 Transit right to terminate for convenience 22.1.1 Transit has the right at any time and for any reason to direct that all Work under the

Alliance cease permanently, by issuing a Notice of Termination to the Alliance Participants, with a copy of the notice to the Alliance Project Manager and each of the PAB Members, giving details of Transit’s requirements for cessation of the Work.

22.2 Alliance Participants’ obligations 22.2.1 Upon receiving a Notice of Termination the Alliance Participants will, subject to the

overriding obligation to maintain a safe workplace and comply with all relevant laws, immediately cease all Work under the Alliance and/or take such other action as directed in the Notice of Termination.

22.2.2 If requested to in writing by Transit, the Other Alliance Participants will execute and deliver to Transit all required documents and take all steps necessary to vest in Transit the rights and benefits, future duties and obligations of OAP1/OAP2 under existing agreements related to the Project between OAP1/OAP2 and their Subcontractors and Suppliers.

22.3 Transit’s obligations to pay 22.3.1 The PAB will determine the amounts to be paid to the Other Alliance Participants in

the event of a termination under clause 22.1 subject to the following guiding principles: a) OAP1/OAP2 will each receive fair compensation consistent with the terms of

compensation in Schedule 7 for all Work under the Alliance actually carried out and liabilities incurred in respect of the Work under the Alliance, including: i) Net Cost (limb 1), Fee (limb 2) and gain/pain share (limb 3) payable in accordance with

Schedule 7, for all Work under the Alliance executed prior to the date of termination; ii) the cost of Materials reasonably ordered by OAP1/OAP2 which OAP1/OAP2 are legally liable

to accept, but only if the Materials become the property of Transit upon payment; iii) costs and liabilities reasonably and properly incurred by OAP1/OAP2 prior to the date of

termination in the expectation of completing the whole of the Alliance Works; iv) reasonable demobilisation costs; v) reasonable costs of complying with any directions given by Transit upon or subsequent to

termination.

b) OAP1/OAP2 will not recover any Fee or suffer penalty in respect of that portion of the Alliance Works which does not get completed as a result of the termination.

22.3.2 The Other Alliance Participants will be entitled to submit an invoice to Transit for the amount determined by the PAB pursuant to clause 22.3.1 and Transit must pay OAP1/OAP2 that amount within 30 days of receiving the invoice.

22.4 Transit’s right to continue project 22.4.1 If Transit terminates the Work under the Alliance pursuant to clause 22.1 Transit will

have the right to complete the Work under the Alliance itself or contract with other persons or companies to complete the Work under the Alliance.


Part E: Default


22.4.2 Such continuation by Transit will not give rise to any rights or entitlements for OAP1/OAP2 beyond those rights and entitlements expressly set out in this PAA.

23 Termination of Work for Default 23.1 Default by OAP1 23.1.1 Upon an Event of Default by OAP1, Transit may give written notice to OAP1, with a

copy to OAP2, advising of Transit’s intention to exercise its rights under clause 23.1.3 if OAP1 does not take action to the satisfaction of Transit to remedy the Event of Default within 7 days.

23.1.2 A notice given under clause 23.1.1 must state that it is a notice under clause 23.1.1 and give detailed particulars of the alleged Event of Default.

23.1.3 If OAP1 fails within 7 days after receipt of a notice given under clause 23.1.1 to take action to the satisfaction of Transit to remedy the Event of Default, then without prejudice to any other right or remedy of Transit, Transit may exercise all or any of the following rights: a) Transit may at any time thereafter wholly or partly suspend payment due to

OAP1 under this PAA until the Event of Default has been remedied. b) Transit may at any time thereafter employ and pay a 3rd party to replace OAP1 in

the performance of the Work under the Alliance and in doing so may use all Construction Plant provided by OAP1 as necessary.

c) OAP1 shall promptly assign to Transit, without payment, the benefit of any subcontracts for the performance of any part of the Work under the Alliance;

d) As and when directed by Transit in writing (and not before), OAP1 will remove from the Site any Construction Plant and other property provided by OAP1.

e) The OAP1 PAB Member(s) will be replaced by an Transit nominee. f) Transit may offset against monies otherwise due or to become due to OAP1

under this PAA, any loss or damage incurred by Transit as a result of the Event of Default by OAP1.

23.2 Default by OAP2 23.2.1 Upon an Event of Default by OAP2, Transit may give written notice to OAP2, with a

copy to OAP1, advising of Transit’s intention to exercise its rights under clause 23.2.3 if OAP2 does not take action to the satisfaction of Transit to remedy the Event of Default within 7 days.


23.2.3 If OAP2 fails within 7 days after receipt of a notice given under clause 23.2.1 to take action to the satisfaction of Transit to remedy the Event of Default, then without prejudice to any other right or remedy of Transit, Transit may exercise all or any of the following rights: a) Transit may at any time thereafter wholly or partly suspend payment due to

OAP2 under this PAA until the Event of Default has been remedied. b) Transit may at any time thereafter employ and pay other persons to replace

OAP2 in the performance of the Work under the Alliance. c) The OAP2 PAB Member will be replaced by an Transit nominee.


Part E: Default


d) Transit may offset against monies otherwise due or to become due to OAP2 under this PAA, any loss or damage incurred by Transit as a result of the Event of Default by OAP2.

23.3 Default by Transit 23.3.1 On the occurrence of an Event of Default by Transit an Aggrieved Alliance

Participant may give written notice to Transit, with a copy to the other Alliance Participant, advising of its intention to exercise its rights under clause 23.3.3 if Transit does not take action to the satisfaction of the Aggrieved Alliance Participant to remedy the Event of Default within 7 days.


23.3.3 If Transit fails within 7 days after receipt of a notice given under clause 23.3.1 to take action to the satisfaction of the Aggrieved Alliance Participant to remedy an Event of Default, then, without prejudice to any other right or remedy of the Aggrieved Alliance Participant, the Aggrieved Alliance Participant may exercise all or any of the following rights: a) Wholly or partly suspend its performance of the Work under the Alliance,

including removal of some or all of its Construction Plant from the Site, until the Event of Default is remedied.

b) Offset against monies otherwise due or to become due to Transit under this PAA, any loss or damage incurred by it as a result of the Event of Default by Transit.

23.3.4 If Transit fails within 28 days after receipt of a notice given under clause 23.3.1 to take action to the satisfaction of the Aggrieved Alliance Participant to remedy the Event of Default, then upon issuing a written notice to Transit, with a copy to the other Alliance Participant, the Aggrieved Alliance Participant will be released from any further obligation to perform the Work under the Alliance.

23.3.5 Without limiting any other rights it may have an Aggrieved Alliance Participant will be entitled to receive fair compensation consistent with the terms of compensation in Schedule 7 for all Work under the Alliance actually carried out and liabilities incurred in respect of the Work under the Alliance up to the date of the notice under clause 23.3.4 above, including those elements of compensation listed in items i) to iv) in clause 22.3.1 above.


Part F: Information & Communication



24 Intellectual Property 24.1.1 Unless agreed otherwise, all Intellectual Property Rights created in any document,

matter or thing prepared or written under or in accordance with this PAA will vest in Transit.

24.1.2 Transit grants the Other Alliance Participants a non-exclusive irrevocable royalty-free licence to use the Intellectual Property Rights.

24.1.3 Nothing in this clause 1 is intended to vest in Transit Intellectual Property Rights in OAP1’s or OAP2’s pre-existing business methodologies.

24.1.4 The Alliance Participants undertake that in carrying out the Work under the Alliance, they will not infringe the Intellectual Property Rights of any person or company.

25 Confidentiality / Public Statements 25.1 Confidentiality 25.1.1 Each Alliance Participant will ensure that any information identified as confidential,

or which should reasonably be recognisable as confidential, acquired by it as a result (either directly or indirectly) of its entering into this PAA will be kept confidential subject to the following exemptions: a) information which is in the public domain or could have been legally acquired by

an Alliance Participant had it not entered into this PAA, will not be considered confidential;

b) an Alliance Participant may disclose confidential information to the extent required by law;

c) an Alliance Participant may disclose specific items of confidential information in accordance with the terms of any prior written consent between the Alliance Participants.

25.2 Public statements 25.2.1 The Other Alliance Participants undertake that they will not, except with the prior

written consent of Transit or as required by law, make any reference, comment or statement relating to the Alliance Works, the Work under the Alliance or this PAA which may be published, broadcast, shown or displayed in any medium including books, magazines, the Internet, newspapers, periodicals, radio, television or films.

25.3 Compliance of servants and agents 25.3.1 Each Alliance Participant will take specific steps to ensure that its servants and

agents observe the obligations set out in clauses 25.1 and 25.2 as may be reasonably required by the other Alliance Participants. Such steps may include the execution by an Alliance Participant’s servants and agents of an agreement or deed imposing confidentiality obligations.

26 Formal Written Notices 26.1 Service of notices 26.1.1 To be valid, a written notice under this PAA must be delivered by:

a) Hand delivery; or b) Certified mail; or c) Facsimile transmission




addressed in accordance with the details given for each Alliance Participant in the Annexure or to such other address advised in writing by an Alliance Participant.

26.1.2 Electronic communication by e-mail will not constitute a valid notice under this PAA (unless agreed otherwise in writing by the Alliance Participants), but a hard copy of an e-mail may be issued as a valid notice using any of the means listed in clause 26.1.1.

26.1.3 A written notice or written advice under this PAA will be deemed to have been received:

By Deemed to be received Hand at the time of delivery Certified mail when signed for as received by the receiver Facsimile at the time recorded on the transmitting fax machine as substantiated

a fax transmission report, provided: (i) The transmission was sent to the correct number; and (ii) The time of transmission is not contradicted by the incoming fax

report.


Part G: Interpretation


Part G: Interpretation

27 Interpretation 27.1 Interpreting the text 27.1.1 In this PAA, words and expressions not otherwise defined will have the meanings

assigned to them in Schedule 1, except where the context requires otherwise. 27.1.2 Headings and sub-headings in this PAA are inserted for convenience only and shall

not be used in interpreting the text. References to clauses and Schedules shall, unless otherwise stated, refer to clauses and Schedules within this PAA. Clause prefixed with “S7-“ refer to clauses in Schedule 7.

27.1.3 A reference to a clause includes all the lower level clauses, which are subordinate to that clause.

27.1.4 Any reference to currency in this PAA, as in "dollars" or "$", will be a reference to New Zealand currency, unless stated otherwise.

27.2 Waiver/Severability/Scope 27.2.1 None of the provisions of this PAA may be varied, waived, discharged or released,

except with the prior written consent of the Alliance Participants. This clause may not itself be waived except with the prior written consent of the Alliance Participants.

27.2.2 If for any reason any one provision or group of provisions in this PAA is held to be invalid or unenforceable at law it will not affect the validity of the remaining provisions of this PAA which can be given effect without the invalid provision(s), and in this respect the provisions of this PAA are declared to be severable.

27.3 Nature of relationship 27.3.1 This PAA is not intended to create nor will it be construed as creating any legal

partnership, joint venture or fiduciary relationship between the Alliance Participants and it will not give rise to any obligations between the Alliance Participants apart from those obligations expressly stated in this PAA or imposed by law.

27.3.2 Each Alliance Participant is an independent entity, and for the purposes of this PAA, the employees, agents or Subcontractors of one Alliance Participant will not be deemed to be employees, agents or Subcontractors of another Alliance Participant, unless deemed otherwise by law.

27.4 Governing law 27.4.1 This PAA will be governed by the laws of New Zealand.


Part H: Signature Page


Part H: Signature Page

THE COMMON SEAL of OTHER ALLIANCE PARTICIPANT 1 was affixed hereto in the presence of:

Signature of Secretary / Director Signature of Director

Name of Secretary / Director - printed

) ) ) ) ) ) ) ) ) ) )

Name of Director – printed

THE COMMON SEAL of OTHER ALLIANCE PARTICIPANT 2 was affixed hereto in the presence of:

Signature of Secretary / Director Signature of Director

Name of Secretary / Director - printed

) ) ) ) ) ) ) ) ) ) )

Name of Director – printed

SIGNED for and on behalf of TRANSIT NEW ZEALAND in the presence of:

Signature of witness

Signature

Name of witness – printed Address of witness - printed

) ) ) ) ) ) ) ) ) ) ) ) )

Name of signatory - printed


Schedule 1: Definitions



Aggrieved Alliance Participant

An Alliance Participant who suffers loss or damage due to an Event of Default by Transit.

Alliance Charter The charter contained in Schedule 3 which the Alliance Participants have developed, committed to and signed off on.

Alliance Defect A defect or omission in the Alliance Works discovered on or before the Date of Final Completion, and includes: a) Any defect in materials or workmanship; b) Damage caused to the Alliance Works prior to 5pm on the Date of Practical

Completion regardless of the cause of that damage; and c) Damage caused to the Alliance Works after 5pm on the Date of Practical

Completion but only if the damage is caused by the Alliance Participants in the course of completing the Work under the Alliance.

ADN A notice issued by Transit, the PAB or the Alliance Project Manager pursuant to clause 9.5.1.

Alliance Disagreement Any difference of opinion and/or conflict between the Alliance Participants arising out of the Work under the Alliance, the Alliance Works or this PAA.

Alliance Participants Means Transit, OAP1 and OAP2.

Alliance Principles The principles set out in the Alliance Charter.

Alliance Project Manager The person nominated as such in the Organisation Chart in Schedule 5 or as otherwise appointed by the PAB.

Alliance Works The structures, plant and other things to be furnished, fabricated, constructed, installed, erected or commissioned by the combined efforts of the Alliance Participants and handed over to Transit under this PAA. The scope of the Alliance Works is described in Schedule 2.

Alternative Auditor Means a reputable auditor engaged by OAP1 and/or OAP2 pursuant to clause 15.4.2 to undertake an audit of Transit’s Records.

Alliance Management Team, AMT

The group of persons referred to in clause 5.1.1

Annexure The Annexure included which appears after the last Schedule.

Certificate of Final Completion

A certificate issued pursuant to clause 21.2.2 a) signed by all PAB Members certifying the date by which the Alliance Participants have satisfied all their obligations in respect of the Alliance Works.

Certificate of Practical Completion

A certificate issued pursuant to clause 21.1.2 a) signed by all PAB Members certifying the date when the Alliance Works reached Practical Completion.

Change A change in the scope, timing or nature of the Work under the Alliance directed by Transit or the PAB including the deletion of work.

claim(s) Includes all demands, judgments and causes of action asserted by any party and any rights, liabilities, damages and reasonable costs and expenses (including legal fees) in any way relating thereto.

Construction Plant All machinery, appliances, plant, equipment, tools, vessels, temporary buildings, huts and sheds, scaffolding, formwork and any other things required for the performance of the Work under the Alliance but not for incorporation in the Alliance Works.

Date of Final Completion The date stated on the Certificate of Final Completion signed by all PAB Members pursuant to clause 21.2.2, being the date as confirmed by the PAB that the Alliance Participants satisfied all their obligations in respect of the Alliance Works.

Date of Practical Completion

The date stated on the Certificate of Practical Completion signed by all PAB members pursuant to clause 21.1.2, being the date that the Alliance Works reached Practical Completion.

Design Services The creation, development and detailing of designs and preparation of associated drawings, specifications, samples, models, patterns and the like as required for the construction and commissioning of the Project.




Environmental Management Plan

Has the meaning given to it by clause 11.2.1.

Event of Default

An Event of Default is deemed to occur if an Alliance Participant: a) Commits an act or omission amounting to Wilful Misconduct in relation to any

significant duty, obligation, term, condition or stipulation arising out of this PAA; b) Fails to take out or maintain an insurance policy that it is obliged to take out and

maintain pursuant to clause 16 in accordance with the requirements set out in clause 16;

c) Fails to honour an indemnity expressly provided under this PAA; d) Refuses reasonable access for an audit referred to in clause 15.

Event of Default (continued)

An Event of Default is also deemed to occur if an Alliance Participant: a) Informs another Alliance Participant in writing or creditors generally that it is

insolvent; b) Commits an act of bankruptcy; c) Has a bankruptcy petition presented against it; d) Is made bankrupt; e) Has a meeting of its creditors called with a view to:

(i) entering a scheme of arrangement or composition with creditors; (ii) placing it under official management;

f) Enters a scheme of arrangement or composition with creditors; g) Is subject to a resolution passed at a meeting of its creditors to place it under

official management; h) Is placed under official management; i) Has a receiver of its property or part of its property appointed; j) Is the subject of an application to a court for its winding up, which application is

not stayed within 14 days; k) Has a winding up order made in respect of it; and/or l) Has execution levied against it by creditors, debenture holders or trustees or

under a floating charge.

External Alliance Auditor The person or company, referred to in clause 15.2.1.

Final Actual Cost The amount determined pursuant to clause S7-8.2 in Schedule 7.

Final Payment Certificate The form of certificate used pursuant to clause 14.4 and against which the Final Payment is made once Part 2 of the certificate is signed by all PAB Members pursuant to clause 14.4.2 a).

Final Target Cost Has the meaning given to it in clause S7-8.1in Schedule 7.

GST Definitions GST means a tax, levy, duty, charge or deduction together with any related additional tax, interest, penalty, fine or other charge imposed by authority of any GST Law.

GST Law means the law enacted by “[INSERT NAME OF GST LEGISLATION]” and any related tax imposition act (whether imposing tax as a duty of customs, excise or otherwise) and includes any legislation which is enacted to validate, recapture or recoup the tax imposed by any of such acts.

Tax Invoice an invoice in the form required under GST Law

Indemnifier Has the meaning given to it in clause 16.2.8.

Indemnified Participant Has the meaning given to it in clause 16.2.8.

Initial Target Cost Has the meaning given to it in clause S7-1.1.2 in Schedule 7.

Intellectual Property Rights

Means all rights in and relating to copyright, trademarks, patents, designs and any other like rights, including rights to registration of such rights, and rights to protect confidential information, know how and trade secrets.




AMT The group of people demarked by the dotted line on the Organisation Chart in Schedule 5 responsible for leading the wider project team.

Labour Persons engaged to carry out manual work in connection with the Work under the Alliance.

Loss Includes damage or destruction, but excludes normal wear and tear.

Materials The materials, equipment, supplies, plant, machinery and other things required to be incorporated into the Alliance Works.

Transit Alliance Costs Means the costs incurred by Transit: a) Of engaging a 3rd party for the provision of Materials, subcontracts, goods or

services required to perform the Work under the Alliance, but excluding Materials provided by Transit pursuant to clause 9.3; or

b) Which the PAB agrees are Transit Alliance Costs.

PAB The board established pursuant to clause 3.1.

PAB Members The persons who comprise Project Alliance Board as defined in clause 3.2.

PI policy Has the meaning given to it in clause 16.3.

Practical Completion Is that stage in the execution of the Work under the Alliance when: (a) The Alliance Works are complete except for minor omissions and minor

defects: (i) Which do not prevent the Alliance Works from being reasonably capable

of being used for their intended purpose; and (ii) Which the PAB determines the Alliance Participants have reasonable

grounds for not promptly rectifying; and (iii) Rectification of which will not prejudice the convenient use of the Alliance

Works; and (b) Documents and other information required in relation to the Alliance Works,

which in the opinion of the PAB are essential for the use operation and maintenance of the Alliance Works, have been supplied.

Practical Completion Payment Certificate

The form of certificate used pursuant to clause 14.3 and against which the payment after Practical Completion is made once Part 2 of the certificate is signed by all PAB Members pursuant to clause 14.3.2 b)

Progress Payment Certificate

A certificate issued by the Alliance Project Manager and signed by the External Alliance Auditor pursuant to clause 14.2.1 setting out the amounts to be paid on account to the Other Alliance Participants.

Project Management Plan Has the meaning given to it in clause 7.

Quality System Plan Has the meaning given to it under clause 9.2.1.

Records Include, but are not limited to, both electronic and physical versions of records, accounts, ledgers, payroll, quality records, correspondence, instructions, plans, drawings, measurements, calculations, invoices, dockets, receipts, vouchers and computer programs.

Rectify Includes demolish, remove, repair, reconstruct, replace, correct and make good (and “rectification” and “rectified” have corresponding meanings).

Site Means the lands, waters, seabed and other places on, under, in or surrounding the Alliance Works the boundaries of which are stated in the Annexure.

Staff Personnel engaged to carry out planning, supervision, administration and other non-manual work in connection with the Work under the Alliance.

Subcontract Means an agreement between an Alliance Participant and a Subcontractor.

Subcontractor Means a company or person engaged by an Alliance Participant under a Subcontract to perform part of the Work under the Alliance which requires work to be done on Site, but does not include a Supplier.

Substitute PAB Member Has the meaning given to it in clause 3.2.3




Supplier Means a company or person engaged by an Alliance Participant to supply goods or services which do not require the supplier to carry out any physical work on Site beyond the delivery of goods.

Target Completion Date The date nominated in the Annexure, being the date on or before which, unless directed otherwise by the PAB, the Alliance Works will be brought to a stage of Practical Completion.

3rd party Means any person or company not a party to this PAA.

Variation Has the meaning given to it in clause 17.2.

Wilful Misconduct Means: a) An intentional act or omission by an Alliance Participant carried out with

disregard for the harmful consequences for another Alliance Participant, but does not include any error of judgment, mistake, act or omission, whether negligent or not, made in good faith by an Alliance Participant; or

b) Failure by an Alliance Participant to make a payment to another Alliance Participant which has become due under this PAA.

Work under the Alliance Means the work that must be undertaken to complete the Alliance Works to the requirements set out in this PAA, and includes: a) Provision of Staff, Labour, Construction Plant, subcontracts, Materials, and

documents; b) All design services; c) Assistance as necessary to commission the Project; d) All management functions; e) Materials, plant, constructions systems, formwork, falsework and other

temporary works used or consumed in executing the Work under the Alliance but not incorporated into the Alliance Works;

f) Changes including Variations.

Schedule 7 terms Are defined within the text of Schedule 7.


Schedule 2: Scope Of The Alliance Works


Schedule 2: Scope Of The Alliance Works

INSERT a description of the overall scope of the Alliance Works in this Schedule 2. Note this should focus on what it is that is to be delivered – not what is required to be done in order to deliver it! The Alliance Participants must do whatever is required to deliver the Alliance Works. The minimum requirements (eg. minimum performance requirements, operating constraints, specified equipment / minimum standards etc. should be listed in Schedule 4 – not here.


Schedule 3: Alliance Charter


Schedule 3: Alliance Charter

Alliance Charter (As signed by attendees at the Foundation Workshop on Day, Date, Month, Year) [It is expected that the Alliance Charter will be developed at a foundation workshop sometime during the IPAA period.]


Schedule 4: Requirements & Minimum Standards


Schedule 4: Requirements & Minimum Standards

The Alliance Participants will deliver the Alliance Works to the minimum standards and in compliance with any constraints and/or requirements set out in this Schedule 4. • List fundamental design / performance requirements • TO BE DONE DURING THE IPAA AND INSERTED HERE


Schedule 5: Organisation Chart


Schedule 5: Organisation Chart

Organisation Chart INSERT ORGANISATION CHART HERE. The chart must identify what positions / personnel are intended to be part of the Alliance Management Team.


Schedule 6: Materials To Be Provided By Transit


Schedule 6: Materials To Be Provided By Transit

Transit will provide the following materials free-of charge to the Alliance Participants, subject to the notes set out below:

Description of item Quantity to be supplied

Point of supply Comment

Notes:


Schedule 7: Terms Of Compensation



S7-1 OVERVIEW S7-1.1 The Target Cost Estimate S7-1.1.1 Prior to entering into this PAA the Alliance Participants developed an estimate (the “Target Cost

Estimate”) of what they expected at the time it would cost to carry out the Alliance Works. The Target Cost Estimate is summarised in Appendix 1 attached to this Schedule 7.

S7-1.1.2 Referring to Appendix 1, the Initial Target Cost (“ITC”) is the total estimated cost excluding Nominated PC Items, Fees and GST. No allowance has been made in the Initial Target Cost for Variations.

S7-1.1.3 A Final Target Cost (“FTC”) will be determined in accordance with clause S7-8.1.1 which takes account of Variations (clause S7-7 below).

S7-1.2 The “3-limb” compensation model S7-1.2.1 Other Alliance Participants will be compensated for carrying out the Work under the Alliance in

accordance with the following 3-limb model: Limb Description

1 Expenditure on the Work under the Alliance (including mistakes, rework and wasted effort) and Project-specific overheads related to the Work under the Alliance will be reimbursed at actual cost subject to audit.

2 A fixed lump sum to cover profit and non Project-specific overheads. 3 A share of the pain or gain depending on how actual outcomes compare with pre-

agreed targets in cost and non-cost performance areas. S7-1.2.2 The basis of compensation within each limb is explained in detail below. S7-1.2.3 The Alliance Participants will develop procedures and systems to implement the intent of these

Terms of Compensation and which meet the requirements of the External Alliance Auditor. S7-1.2.4 The Alliance Participants will ensure that costs are allocated to separate cost codes as necessary

to ensure that the intent of this Schedule 7 can be implemented, and validated by the External Alliance Auditor.

S7-1.3 Definition of Net Cost S7-1.3.1 For the purposes of this PAA the term Net Cost means a cost incurred or paid directly by OAP1

and/or OAP2 and will exclude any component for profit or non Project-specific overhead. In establishing Net Cost, account will be taken of: a) All cash, trade and other discounts, allowances and credits: b) Statutory liabilities such as accrued entitlement to annual leave, sick time etc. for employees; c) Commissions; and d) Statutory taxes, duties and rebates, including customs duty and sales tax payable by

OAP1/OAP2, but excluding all GST.

S7-2 LIMB 1 (OAP1) S7-2.1 Guiding principles S7-2.1.1 Expenditure by OAP1 on the Work under the Alliance is reimbursable under limb 1, subject to any

adjustments or limitations noted in this PAA. S7-2.1.2 Costs allocated to the alliance by OAP1 that are related to OAP1-owned plant, on-costs on wages

and staff personnel and other internal OAP1 charges: a) Must be consistent with the charges that OAP1 traditionally levies on similar projects; and b) Must not include any component for non Project-specific overheads or profit (but may include

an allowance for the overhead cost of operating the plant department but subject to the test noted in a) above.




S7-2.2 Basis of reimbursement S7-2.2.1 Subject to clause S7-2.1.2 above OAP1 will be paid the Net Cost incurred by OAP1 in performing

the Work under the Alliance, as determined in accordance with the following guidelines: a) Labour and Staff: Reimbursement will be based on actual payroll records with due allowance

for all statutory on-costs and liabilities and other on-costs that OAP1 traditionally applies to Labour and Staff.

b) Construction Plant owned by OAP1: Subject to clause S7-2.1.2, reimbursement will be based on what it actually costs OAP1 to provide the item, taking into account depreciation, maintenance, utilisation and any other factors that are reasonably justified using normal cost accounting methods.

c) Goods and services: Materials, subcontracts and other services will be reimbursed on the basis of the actual net amount paid out by OAP1.

S7-3 LIMB 1 (OAP2) NOTE – This section to be redrafted based on method 1 or 2 (or some other method) to suit the agreed methodology for reimbursement of OAP2’s costs S7-3.1 General (Method 1) S7-3.1.1 Expenditure by OAP2 on the Work under the Alliance is reimbursable under limb 1, subject to any

adjustments or limitations noted in this PAA. S7-3.1.2 OAP2 will be paid the Net Cost incurred by it in performing the Work under the Alliance,

determined as set out below. S7-3.2 Staff and associated overheads S7-3.2.1 OAP2, Transit and the External Alliance Auditor have signed off on a Schedule of Cost Rates

which are intended to reflect the actual costs to OAP2 of providing staff to the Project. S7-3.2.2 Unless agreed otherwise, OAP2 will be reimbursed the corresponding rate shown in the Schedule

of Cost Rates hours for each hour that OAP2 personnel are engaged on the Work under the Alliance.

S7-3.2.3 Time expended discharging the duties of a PAB Member under the PAA is considered to be covered by the Fee$ and will not be reimbursed under limb 1.

S7-3.2.4 The rates will be applied to the hours worked without regard to whether or not the time is “ordinary time” or “overtime”.

S7-3.2.5 All hours and payments will be subject to verification by the External Alliance Auditor. S7-3.2.6 OAP2 will be reimbursed for staff not included in the list using a new rate developed using the

same methodology that was used to arrive at the rates in the Schedule of Cost Rates, to be verified by the External Alliance Auditor.

S7-3.2.7 The rates are deemed to take into account all costs incurred and liabilities accrued by OAP2 associated with the engagement of the person and the work undertaken by that person, not otherwise expressly stated to be reimbursable under this PAA.

S7-3.3 Out-of-pocket expenses S7-3.3.1 The Net Cost of any out-of-pocket expenses will be reimbursed under limb 1 to the extent that the

expense is reasonably incurred in performing the Work under the Alliance. S7-3.4 Basis of reimbursement (Method 2) S7-3.4.1 OAP2 will be paid the Net Cost incurred by OAP2 in performing the Work under the Alliance, as

determined in accordance with the following guidelines: a) Staff: Reimbursement will be based on actual payroll records with due allowance for all

statutory on-costs and liabilities and other on-costs as determined by the External Alliance Auditor.

b) Project specific overheads: OAP2 will be reimbursed for the use of its corporate facilities in performing the Work under the Alliance by applying the following multipliers to the staff costs determined under item a) immediately above:




• Permanent staff – normal time (ie. up to 37.5 hrs/wk) XX.XX

• Permanent staff – overtime (ie. hours beyond 37.5 /wk) XX.XX

• Casual staff XX.XX

• Contract staff – normal time XX.XX

• Contract staff – overtime XX.XX c) Reimbursable expenses: OAP2 will be reimbursed the Net Cost of all reasonable out-of-

pocket expenses necessarily incurred by OAP2 in carrying out the Work under the Alliance. S7-4 LIMB 2 - FEE S7-4.1 OAP1 Fee S7-4.1.1 OAP1 will be paid a Fee (“Fee$OAP1”) calculated as follows:

ITCOAP1 x Fee%OAP1 where ITCOAP1 = That portion of the Initial Target Cost allocated to OAP1, as indicated in Appendix 1. Fee%OAP1 = The % figure stated in the Annexure.

S7-4.1.2 Fee$OAP1 will be adjusted in accordance with clause S7-7.2.1 for Variations. S7-4.1.3 Fee$OAP1 will be paid progressively in the manner set out in clause S7-9 below. S7-4.1.4 Fee$OAP1 as adjusted to take account of Variations will be deemed to fully compensate OAP1 for

all expenditure by OAP1 in carrying out the Work under the Alliance not otherwise reimbursed under this PAA.

S7-4.2 OAP2 Fee S7-4.2.1 OAP2 will be paid a Fee (“Fee$OAP2”) calculated as follows:

ITCOAP2 x Fee%OAP2 where ITCOAP2 = that portion of the Initial Target Cost allocated to OAP2, as indicated in Appendix 1. Fee%OAP2 = The % figure stated in the Annexure.

S7-4.2.2 Fee$OAP2 will be adjusted in accordance with clause S7-7.2.2 for Variations. S7-4.2.3 Fee$OAP2 will be paid progressively in the manner set out in clause S7-9. S7-4.2.4 Fee$OAP2 as adjusted to take account of Variations will be deemed to fully compensate OAP2 for

all expenditure by OAP2 in carrying out the Work under the Alliance not otherwise reimbursed under this PAA.

S7-5 LIMB 3 – SHARING OF PAIN:GAIN S7-5.1 General S7-5.1.1 The Alliance Participants will share “gain” or “pain” as detailed below in this clause S7-5

depending on how actual performance compares with pre-agreed targets in both cost and non-cost areas.

S7-5.2 Non-cost performance score - OPS S7-5.2.1 The Alliance Participants have agreed on key performance indicators (KPIs) and methods and

procedures to measure actual performance in non-cost areas. S7-5.2.2 These are set out in a separate document entitled “Procedures for measuring the performance in

non-cost areas”. Pursuant to those procedures an Overall Performance Score (OPS) between 0 and 100 will be calculated.

S7-5.3 Sharing of pain:gain amongst OAPs S7-5.3.1 Any amounts Transit has to pay to the Other Alliance Participants pursuant to this clause S7-5 will

be paid to the respective OAPs in the proportions stated in the Annexure.




S7-5.3.2 Any amounts the Other Alliance Participants have to pay to Transit pursuant to this clause S7-5 will be paid to Transit by the respective OAPs in exactly the same proportions referred to in clause S7-5.3.1.

S7-5.4 Cost overruns S7-5.4.1 Subject to clause S7-5.7.1 below, where the Final Actual Cost exceeds the Final Target Cost the

Other Alliance Participants will pay Transit an amount calculated in accordance with the following formula:

(FAC - FTC) x 50% where

FTC = The Final Target Cost as determined in accordance with clause S7-8.1. FAC = The Final Actual Cost as determined in accordance with clause S7-8.2.

S7-5.5 Cost underruns S7-5.5.1 Where the Final Actual Cost is less than the Final Target Cost Transit will pay the Other Alliance

Participants an amount calculated in accordance with the following formula: (OPS – 50)

(FTC – FAC) x [ 50% + (Sens% x 50

) ]

where OPS = The Overall Performance Score (a number between 0 and 100) referred to in clause S7-5.2

above. Sens% = The sensitivity factor stated in the Annexure.

S7-5.6 Further pain:gain based on OPS S7-5.6.1 Where the OPS exceeds 50 Transit will pay the Other Alliance Participants an amount calculated

in accordance with the following formula: (OPS – 50)

$MaxOPS x [ 50

]

where $MaxOPS = The Non-Cost Fund being the amount stated in the Annexure.

S7-5.6.2 Subject to clause S7-5.7.1 below, where the OPS is less than 50 the Other Alliance Participants will pay Transit an amount calculated in accordance with the following formula:

(50 - OPS) $MaxOPS x [

50 ]

S7-5.7 Cap on OAP1/2 downside risk S7-5.7.1 Notwithstanding how poor the actual outcomes are or what figures are derived by the application

of the various formulae set out in this clause S7-5, Other Alliance Participants will be paid no less under this PAA than the amounts calculated pursuant to: a) Clause S7-2 in the case of OAP1; b) Clause S7-3 in the case of OAP2.

S7-6 PAYMENT / APPLICATION OF GST S7-6.1.1 With each payment pursuant to this PAA the payer shall include with the payment to the payee

the amount of any GST included in the relevant Tax Invoice. S7-6.1.2 The intention is that GST reimbursed to OAP1/OAP2 under this PAA will not be taken into

account in the calculation of the Final Target Cost or the Final Actual Cost. S7-7 VARIATIONS S7-7.1 Notification & approval procedure S7-7.1.1 Upon becoming aware of a Variation or potential Variation, the Alliance Project Manager will

complete Part 1 of the Variation Notice/Approval form provided in Schedule 11 and submit the form, along with appropriate supporting information, to the PAB for review.




S7-7.1.2 If an Alliance Participant considers that circumstances have arisen that might constitute a Variation, it may issue a written notice to the Alliance Project Manager, with a copy to the other Alliance Participants, giving details of the alleged Variation. Upon receiving such notice the Alliance Project Manager will promptly submit a Variation Notice/Approval form with appropriate supporting information to the PAB for review.

S7-7.1.3 The PAB will consider a Variation Notice/Approval at its next scheduled meeting, complete Part 2 and return the completed form to the Alliance Project Manager confirming: a) Whether or not it is a Variation; and b) If it is a Variation:

• the total costs (excluding GST and any limb 2 Fee adjustment ) to be budgeted for that Variation (“Var$”), made up of the following estimate components:

Var$OAP1 The portion of Var$ expected to be expended by OAP1. Var$OAP2 That portion of Var$ expected to be expended by OAP2. Var$Transit Any portion of Var$ expected to be expended directly by Transit.

• the adjustment, if any, to the Target Completion Date. S7-7.2 Adjustment to Fees S7-7.2.1 The Fee otherwise payable to OAP1 will be adjusted for each Variation in accordance with the

following formula: Var$OAP1 x Fee%OAP1

S7-7.2.2 The Fee otherwise payable to OAP2 will be adjusted for each Variation in accordance with the following formula:

Var$OAP2 x Fee%OAP2 S7-7.3 Adjustment to the Target Cost S7-7.3.1 The Initial Target Cost (refer clause S7-1.1.2 and Appendix 1) will be adjusted progressively (up

or down) by each Var$ amount approved by the PAB. S7-7.4 Adjustment to Target Completion Date S7-7.4.1 Unless the PAB decides to adjust the Target Completion Date to take account of Variations or for

some other reason, there will be no adjustment to the Target Completion Date. S7-8 FINAL TARGET / ACTUAL COST S7-8.1 Final Target Cost S7-8.1.1 The Final Target Cost (“FTC”) will be determined as follows:

ITC + ΣVar$ + AdjOther where ITC = The Initial Target Cost shown in Appendix 1

ΣVar$ = The cumulative total of all the adjustments for Variations determined by the PAB under clause S7-7.1.3.

AdjOther = Any adjustment, which may be positive or negative, that the PAB decides should be taken into account in calculating the Final Target Cost.

S7-8.2 Final Actual Cost S7-8.2.1 The Final Actual Cost (“FAC”) will be determined as follows:

ΣIPAA + ΣL1 + ΣTransit$ - Σ$in where ΣIPAA = The total amount allowed in the Target Cost for the IPAA Services provided by the OAPs

(excludes GST)

ΣL1 = The total amount reimbursed to the Other Alliance Participants under limb 1 (excludes GST).

ΣTransit$ = The total aggregate amount of Transit Alliance Costs. [“Transit Alliance Costs” is defined in Schedule 1.]




Σ$in = The net income received by Transit and/or the Alliance Participants from the following sources: a) Payouts from the CWI or PI insurance policies. b) Recovery from claims against 3rd parties to the extent that such claims relate to costs that

have been reimbursed to OAP1/OAP2 under limb 1. c) disposal of items pursuant to 18.2.2.

S7-9 QUANTUM OF PAYMENTS S7-9.1 Prior to Practical Completion S7-9.1.1 Progress Payment Certificates prepared pursuant to clause 14.2 will allow amounts for

OAP1/OAP2 calculated as follows (refer Schedule 8): [(L1TD + L2TD) – ΣPaid] + GST

where L1TD = Cost to date of items reimbursable under limb 1 based on:

a) Actual cost of items which have already been invoiced to and/or paid by OAP1/OAP2; and

b) Accruals for the cost for goods and services which have already been supplied or delivered but which have not yet been invoiced/paid.

L2TD = A % portion of the Fee which will eventually be payable to each respective OAP (including adjustments for approved Variations) based on the % of its component of the Work under the Alliance that has already been completed at the time. In the first progress payment under this PAA, the payment of limb 2 will include the full amount of Fee associated with the IPAA Services carried out by that OAP.

ΣPaid = The total amount previously paid, excluding GST previously paid up to that time under this PAA.

S7-9.2 Upon Practical Completion S7-9.2.1 The Practical Completion Payment Certificate certified by the PAB under clause 14.3.2 will allow

amounts for OAP1/OAP2 calculated as follows (refer Schedule 9): [(L1TD + L2Prov + P/GProv) – ΣPaid] + GST

where L2Prov = A provisional estimate of the total Fee payable including all approved adjustments to date. P/GProv = A provisional estimate of the amount of pain or gain, having made a reasonable allowance

for the cost of attending to Alliance Defects up to the Date of Final Completion.

S7-9.3 Final Payment S7-9.3.1 The Final Payment Certificate certified by the PAB under clause 14.4 will allow amounts for

OAP1/OAP2 calculated as follows (refer Schedule 10): [(L1 + L2 + L3) - ΣPaid] + GST

where L1 = Total cost of items reimbursable under limb 1 based on actual cost of items already invoiced

to and/or paid by OAP1/OAP2. [Accruals are not acceptable.] L2 = The total (limb 2) Fee payable including all adjustments for Variations. L3 = The total painshare or gainshare amount payable pursuant to clause S7-5 above (limb 3).


Schedule 7: Terms Of Compensation - Appendix 1


Schedule 7: Terms Of Compensation - Appendix 1

Summary of Target Cost Estimate The Alliance Participants have agreed on a fully detailed estimate of the costs to carry out and handover

the Alliance Works. The fully detailed elemental build-up of the estimate, a copy of which is in the possession of Transit, is referred to as the Target Cost Estimate (“TCE”). The Target Cost Estimate has been ratified by independent Industry Experts. The Target Cost is summarised below.

Portion of the TCE expected to be expended by OAP1 ITCOAP1 ⎝

Portion of the TCE expected to be expended by OAP2 ITCOAP2 ⎝

Transit Alliance Costs

Initial Target Cost ITC ⎝

Estimated Payments The estimated payments to OAP1/OAP2 are summarised below – ie. if the actual costs were exactly as

per the Target Cost Estimate, and there were no Variations and no payments (either positive or negative) under limb 3 risk:reward.

OAP1 OAP2 Total Limb 1 – costs Limb 2 – Fee Sub-total (excluding GST) GST % Totals (including GST) ----------------------------------------------------------------- υ υ υ ------------------------------------------------------------------ Signed by the authorised representatives of the Alliance Participants Name (printed) Signature Date OAP1 OAP2 Transit


Schedule 8: Progress Payment Certificate


Schedule 8: Progress Payment Certificate

Part 1 (to be completed by the Alliance Project Manager) Cut-off Date

1 I attach a Tax Invoice from OAP1 and a Tax Invoice from OAP2 claiming amounts which have been calculated in accordance with clause S7-9.

2 The amounts claimed by Other Alliance Participants are summarised / reconciled below. 3 All back-up information requested by the External Alliance Auditor has been provided to the External

Alliance Auditor.

4 Substantiation information (other than the Tax Invoices) as requested by Transit and/or the External Alliance Auditor is attached.

OAP1 OAP2 Total Total limb 1 reimbursable costs to date L1TD Fee to date based on % completed L2TD

Gross Entitlement to date

Less previous Gross Entitlement / amount paid ΣPaid

Net Entitlement (excluding GST)

GST applicable to Net Entitlement

Amounts payable from this certificate ⎝ Signature of Alliance Project Manager Print name Date

Part 2 (to be completed by the External Alliance Auditor)

1 Although I may not have yet carried out a detailed audit of the Other Alliance Participants’ Records, I am satisfied, based on preliminary investigations of costing Records and other available information, that the amounts included on the attached Tax Invoices and summarised above by the Alliance Project Manager represent with reasonable accuracy the amounts payable to the Other Alliance Participants pursuant to the Terms of Compensation set out in Schedule 7 of the Project Alliance Agreement (“PAA”).

2 Pursuant to clause 14.2.2 of the PAA, Transit must pay the stated amounts to OAP1/OAP2 within ____ days of receiving this signed Progress Payment Certificate.

Signature of External Alliance Auditor Print name Date


Schedule 9: Practical Completion Payment Certificate


Schedule 9: Practical Completion Payment Certificate

Part 1 (by the External Alliance Auditor and the Alliance Project Manager)

OAP1 OAP2 Total Total limb 1 reimbursable costs to date L1TD Provisional estimate of total Fee payable L2Prov Provisional estimate of pain/gain P/GProv

Gross Entitlement to date




Amounts payable from this certificate ⎝

I have carried out a comprehensive audit of the Other Alliance Participants Records and am satisfied that the amounts shown above, which match the attached Tax Invoices from OAP1/OAP2 are payable in accordance with clause S7-9.2.1 in Schedule 7.

I am satisfied that the amounts shown above, which match the attached Tax Invoices from OAP1/OAP2 accurately represent the amounts payable to/from OAP1/OAP2 in accordance with clause S7-9.2.1 in Schedule 7.

Signature of External Alliance Auditor Signature of Alliance Project Manager Date

Part 2 (to be completed / signed by all Project Alliance Board Members)

1 We have reviewed the report by the External Alliance Auditor setting out the findings of his detailed audit following Practical Completion and confirm that the amounts stated above are payable to the Other Alliance Participants (or if shown as negative are payable to Transit from OAP1/OAP2) in accordance with the terms of the Project Alliance Agreement (“PAA”).

2 Pursuant to clause 14.3.3 of the PAA within _____ days of the PAB Members signing this Practical Completion Payment Certificate Transit must pay OAP1/OAP2 (or OAP1/OAP2 must pay Transit as the case may be) the stated amounts.

Signed for OAP1 Signed for OAP2 Signed for Transit Date


Schedule 10: Final Payment Certificate


Schedule 10: Final Payment Certificate

Part 1 (by the External Alliance Auditor and the Alliance Project Manager)

OAP1 OAP2 Total Total limb 1 reimbursable costs L1 Total Fee payable L2

Limb 3

Gross Entitlement




Amounts payable from this certificate ⎝ I have carried out a comprehensive final audit of

the Other Alliance Participants Records and am satisfied that the amounts shown above, which match the attached Tax Invoices from OAP1/OAP2 are payable in accordance with Schedule 7.

I am satisfied that the amounts shown above, which match the attached Tax Invoices from OAP1/OAP2 accurately represent the amounts payable to/from OAP1/OAP2 in accordance with the Terms of Compensation in Schedule 7.

Signature of External Alliance Auditor Signature of Alliance Project Manager Date


1 We have reviewed the report by the External Alliance Auditor setting out the findings of his detailed audit following Final Completion and confirm that the amounts stated above are payable to the Other Alliance Participants (or if shown as negative are payable to Transit from OAP1/OAP2) in accordance with the terms of the Project Alliance Agreement (“PAA”).

2 Pursuant to clause 14.4.3 of the PAA within _____ days of the PAB Members signing this Final Payment Certificate Transit must pay OAP1/OAP2 (or OAP1/OAP2 must pay Transit as the case may be) the stated amounts.



Schedule 11: Variation Notice / Approval


Schedule 11: Variation Notice / Approval

Part 1 (by the Alliance Project Manager) Variation No

1 Having consulted with the leaders of the AMT, I am of the view that the circumstances described below may constitute a Variation.

2 One of the Alliance Participants has advised me that it believes the circumstances described below may constitute a Variation and has asked me to submit this proposal to the PAB.

3 The reasons for believing that it may be a Variation along with full details of the circumstances and particulars of the cost estimates are attached.

4 The components of the estimated costs associated with the Variation are summarised below.

Summary description of the circumstances

Summary of proposed cost estimate Total The Initial Target Cost (from Appendix 1 of Schedule 7) ITC ⎝

Total of all Variations approved to date by the PAB ΣVar$ ⎝

Status of Target Cost prior to this Variation ITC + ΣVar$ ⎝

This Variation – my proposed budget (Var$) a) Portion expected to be expended by OAP1 Var$OAP1 b) Portion expected to be expended by OAP2 Var$OAP2 c) Portion expected to be expended by Transit Var$Transit This Var$

Signature by Alliance Project Manager Date


1 We have reviewed the information provided by the Alliance Project Manager and agree that the circumstances constitute or justify a Variation. We confirm Var$ and individual components making up the Var$ amount as shown above

2 remain unchanged at

We have agreed that the Target Completion Date should

be adjusted to new date ⎝

Signed for OAP1 Signed for OAP2 Signed for Transit

Date


Schedule 12: Certificate Of Practical Completion


Schedule 12: Certificate Of Practical Completion

Part 1 (by the Alliance Project Manager)

1 I believe the Alliance Works have reached a stage of Practical Completion and to the best of my knowledge there are no outstanding Alliance Defects (unless noted otherwise below).

2 I believe the Date of Practical Completion should be declared to be ⎝

3 I request that the PAB Members consider the matter at the next PAB meeting and, pursuant to clause 21.1.2, within the next 21 days: a) Sign Part 2 below confirming that Practical Completion has been reached and confirming the date I

have nominated or a different date as appropriate; or b) Issue a list of Alliance Defects.

Further comments / notes



θ We concur with the Alliance Project Manager that the Alliance Works reached a stage of Practical Completion on

⎝

θ We agree that the Alliance Works have reached Practical Completion, but have determined that the Date of Practical Completion was

⎝

θ The Alliance Works have NOT reached Practical Completion. We hereby direct the Alliance Participants to rectify the Alliance Defects noted on the attached list.



Schedule 13: Certificate Of Final Completion


Schedule 13: Certificate Of Final Completion

Part 1 (by the Alliance Project Manager) 1 12 months have elapsed since the Date of Practical Completion, I am not aware of any Alliance

Defects that are the responsibility of the Alliance Participants and to the best of my knowledge the Work under the Alliance is 100% complete.

2 I believe that the Date of Final Completion should be declared to be ⎝

3 I request that the PAB Members consider the matter at the next PAB meeting and, pursuant to clause 21.2.2, within the next 21 days: a) sign Part 2 below confirming the date I have nominated above as the Date of Final Completion or a

different date as appropriate; or b) issue a list of Alliance Defects.

Further comments / notes



θ We concur with the Alliance Project Manager that the Work under the Alliance is 100% complete and confirm that the Alliance Participants henceforth are under no obligation to undertake any further Work under the Alliance.

θ We agree with the date proposed by the Alliance Project Manager and declare the Date of Final Completion to be

⎝

θ We do not agree with the date proposed by the Alliance Project Manager but rather declare the Date of Final Completion to be

⎝

θ The Alliance Works are NOT 100% complete. We hereby direct the Alliance Participants to rectify the Alliance Defects noted on the attached list.



Schedule 14: Annexure



PAA clause Topic / details Information

2.1.1, 20.1.1 & S7-5.4

The Target Completion Date

Transit OAP1

3.2.2 PAB Members (unless notified otherwise)

OAP2 14.1.1 Rate of interest on overdue payments 14.2.1 The times or period for submission of Progress Payment

Certificate by the Alliance Project Manager

14.2.2 The number of days after receipt of the signed Progress Payment Certificate within which Transit must pay to Other Alliance Participants the amounts certified

14.3.1 Number of days after the Date of Practical Completion for conduct of an audit and submission of the partially completed Practical Completion Payment Certificate to the PAB.

14.3.2 Number of days after receiving the partially completed certificate for the PAB Members to review and sign the Practical Completion Payment Certificate

14.4.1 Number of days after the Date of Final Completion for conduct of a final audit and submission of the partially completed Final Alliance Payment Certificate to the PAB.

14.4.2 Number of days after receiving the partially completed certificate for the PAB Members to review and sign the Final Payment Certificate.

15.2.1 External Alliance Auditor 16.1.1 The Alliance Participant responsible for taking out and

maintaining the CWI policy

For any one occurrence 16.1.6 The minimum amount of cover under the CWI policy In the aggregate

Major perils 16.1.7 The excess under the CWI policy for any one event shall be not more than Minor perils

16.2.1 The Alliance Participant responsible for taking out and maintaining the public liability policy

16.2.6 The minimum amount of cover under the public liability policy

bodily injury 16.2.7 The excess under the public liability policy for any one event shall be not more than

All other claims

16.3.1 The Alliance Participant responsible for taking out and maintaining the PI policy

16.3.6 Period (years) of run-off cover for PI policy beyond the Date of Final Completion

____ years

16.3.7 The minimum amount of For any one occurrence




PAA clause Topic / details Information

cover under the PI policy In the aggregate

16.3.8 The excess under the PI policy for any one event shall be not more than

21.2.1 The defects period 24 months Main contact Address Telephone Facsimile Mobile phone

Contact details for Transit for the service of notices under the PAA

e-mail Main contact Address Telephone Facsimile Mobile phone

Contact details for OAP1 for the service of notices under the PAA

e-mail Main contact Address Telephone Facsimile Mobile phone

26.1.1

Contact details for OAP2 for the service of notices under the PAA

e-mail Schedule 1 Description of

the boundaries of the Site

S7-4.1.1 OAP1 Fee% Fee%OAP1

S7-4.2.1 OAP2 Fee% Fee%OAP2

Fee$OAP1 OAP1’s % share of the OAPs’ pain:gain – based on the following proportion (Fee$OAP1 + Fee$OAP2)

Fee$OAP2

S7-5.3

OAP2 % share of the OAPs’ pain:gain – based on the following proportion (Fee$OAP1 + Fee$OAP2)

S7-5.5.1 Maximum % by which the 50%:50% underrun sharing ratio is to be modified based on the OPS

Sens%

Schedule 7 Terms of

Compensation

S7-5.6 Maximum amount of painshare:gainshare associated with OPS (apart from adjustment of underrun share)

$MaxOPS

Date post:	06-Feb-2018
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