Common use of EPEC Clause in Contracts

EPEC. EUROSTAT Guide, EUROSTAT will not classify a project as off balance sheet if, at Financial Close, the revenues that the Authority (and/or government more widely) is forecast to receive from users of the asset over the life of the contract will exceed 50% of the total value of payments that the Authority is forecast to make to Project Co over the life of the contract. Revenues and forecast payments should be compared on a net present value basis at Financial Close. The amount of revenues forecast should be those specifically related to the MIM asset. Comprehensive details of revenue generation activities related to the MIM asset must be included in the Authority's outline business case and approved by Welsh Government. Authorities must also seek approval from Welsh Government to any anticipated change to such forecast revenues, to allow ongoing review of statistical treatment. Consideration will also be required in connection with defining the Authority Services to include such activities. Where Project Co undertakes third party revenue schemes, this Clause (and the Agreement generally) will need to be amended, as appropriate. However, as noted above, the amount of third party revenues that the Authority is forecast to receive over the life of the contract (whether through itself charging for the use of the asset or through sharing of revenues Project Co generates) will influence statistical treatment so reference must be made to the thresholds set out at section 5.5 of Chapter 3 the EPEC/EUROSTAT Guide. 11 Any warranties to be given by the Authority must be justified on a project specific basis and should be set out in Clause 53. The drafting in square brackets should be deleted where no relevant warranties are to be provided by the Authority.