Common use of ESTABLISHMENT AND OPERATION OF THE COMPANY Clause in Contracts

ESTABLISHMENT AND OPERATION OF THE COMPANY. 5 (1) The Commonwealth and the States will, to the extent each in its capacity as a shareholder in the Company is able, procure the Company to: (a) negotiate Best Practice Industrial Agreements with the relevant unions leading to an enterprise award as envisaged by Recital B (a) (iii); (b) before the commitment of any capital upgrading have in place best Practice Industrial Agreements which the Company advises provide a basis for commercial operations; (c) commence and conduct national interstate rail freight operations; (d) conduct all marketing and determine pricing for interstate rail freight carried on by the Company; (e) collect and retain all revenue generated by the carriage of interstate rail freight from the date of commencement of operations; (f) take over progressively from the rail authorities of the Commonwealth and the States, in whole or in part, functions of the type listed in Schedule 2 and the management of the associated assets pursuant to the provisions of this Agreement and the agreements entered into pursuant to subclauses 5 (3), 5 (4) and 5 (5); and (g) give effect to this Agreement and to those obligations which by this Agreement are expressed to be obligations of the Company. 5 (2) The Commonwealth, the States and the other States will, and will cause their respective rail authorities to assist the Company, when requested by the Company, to undertake the matters set out in subclause 5 (1), except, in the case of the other States, in relation to the matters set out in paragraph 5 (1) (f). Contracts for Services 5 (3) Prior to and during the Transition Period, at the request of the Company, the Commonwealth and the States shall, and shall cause their respective rail authorities to, enter into contracts with the Company for the provision of rail services to the Company, relating to interstate rail freight. Those contracts will make provision for the following during the Transition Period: (a) The price for services performed under the contracts shall be agreed on the basis that: (i) the initial contract price, to apply for no longer than for the period of 12 months after the date of commencement of operations, will be set having regard to: (A) the Company being able to meet its costs incurred in performing the functions assumed by it in whole or in part, during the period for which the initial contract price applies (being reasonable costs); and (B) the revenue that the rail authority would have received under the Railways of Australia Agreement, had that agreement still applied. and, (ii) thereafter the contract price will, on the basis that the Company has achieved Best Practice Industrial Agreements and is implementing its approved capital investment program, reduce progressively to NRC Standard Costs. (b) liquidated damages, in an amount or by a formula to be agreed between the parties to the contract, to be paid to the Company by the respective rail authorities, or by the Company to the respective rail authorities, in respect of a failure by a party to meet such performance standards as are specified in the contract; (c) the Company and the relevant rail authority are to maintain and make available to each other externally audited accounts of the costs of carrying out their respective obligations under any contract. The accounts shall be in the form specified from time to time by the auditors of the Company in accordance with generally accepted accounting practices. Such accounts shall be retained by the parties to a contract for at least a period of 12 months after the expiration of the contract. These accounts will only be used for the purpose of determining payments pursuant to clause 5. Transfer of Functions 5 (4) (a) Subject to this Agreement, the Commonwealth and the States shall and shall cause their respective rail authorities to permit the Company to assume performance of the functions relating to interstate rail freight of the type listed in Schedule 2, in whole or in part, in accordance with a detailed list of specific functions and the timetable set out in the Corporate Plan and being no later than the end of the Transition Period.