FUNDING DEED - Kangaroo Island Council - Welcome · FUNDING DEED in relation to the ... partnership, body corporate, association, local authority, ... 1.2.11 any body which no longer

DATED DAY OF 2016

FUNDING DEED

in relation to the Kangaroo Island Airport Upgrade Project

BETWEEN

MINISTER FOR TRANSPORT AND INFRASTRUCTURE

(“Minister”)

-AND-

KANGAROO ISLAND COUNCIL

(“Grantee”)

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KI Airport Funding Deed Kangaroo Island Council CSO156661FSO5671377

TABLE OF CONTENTS

1. DEFINED TERMS & INTERPRETATION ...................................................................12. PURPOSE ..................................................................................................................63. TERM .........................................................................................................................64. GRANTEE'S OBLIGATIONS......................................................................................65. COORDINATION........................................................................................................86. CONTRACT REPRESENTATIVES ............................................................................97. NO RELIANCE ON INFORMATION ...........................................................................98. GRANTEE’S WARRANTIES ....................................................................................109. PROJECT.................................................................................................................1010. DIRECTIONS............................................................................................................1211A. PREPAYMENT.........................................................................................................1211. TIME AND PROGRESS ...........................................................................................1212. FUNDING .................................................................................................................1413. GST ..........................................................................................................................1614. FINANCIAL ACCOUNTS AND RECORDS ..............................................................1715. INSURANCE ............................................................................................................1916. INDEMNITY ..............................................................................................................1917. LIMITATION OF LIABILITY - MINISTER..................................................................2018. INTELLECTUAL PROPERTY RIGHTS ....................................................................2019. TERMINATION.........................................................................................................2020. REPAYMENT EVENTS ............................................................................................2121. CONSEQUENCES OF REPAYMENT EVENT..........................................................2222. SUSPENSION ..........................................................................................................2323. DISPUTE ..................................................................................................................2324. VARIATIONS............................................................................................................2425. ASSIGNMENT..........................................................................................................2426. CONFLICT OF INTEREST .......................................................................................2427. CONFIDENTIALITY..................................................................................................2428. NOTICES..................................................................................................................2629. MISCELLANEOUS...................................................................................................2730. TRUSTEE OBLIGATIONS........................................................................................2931. INDUSTRY PARTICIPATION POLICY.....................................................................29

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SCHEDULE 1 COMMERCIAL DETAILSSCHEDULE 2 PROJECT BRIEFSCHEDULE 3 PROJECT PARTNERSHIP FRAMEWORKSCHEDULE 4 REPORTSSCHEDULE 5 GRANTEE’S INDUSTRY PARTICIPATION

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DEED dated day of

PARTIES:

MINISTER FOR TRANSPORT AND INFRASTRUCUTRE a body corporate pursuant to theAdministrative Arrangements Act 1994 (SA) of Level 12, Roma Mitchell House, 136 North TceAdelaide, Adelaide, South Australia 5000 (“Minister”)

AND

KANGAROO ISLAND COUNCIL a body corporate established under the Local GovernmentAct 1999 (SA) ABN 93 741 277 391 of 43 Dauncey Street, Kingscote. South Australia 5223(“Grantee”).

BACKGROUND:

A. On 6 October 2015, the State Government approved $9 million funding for theKangaroo Island Airport upgrade contingent on the Kangaroo Island Council receivingthe Federal “National Stronger Regional Funds” funding component. On 7 December2015 the Commonwealth Government advised the Grantee that the project had beensuccessful in obtaining $9 million NSRF funding.

B. The Minister has agreed to give the Grantee a grant, being the total sum of $9 millionexclusive of GST (“Grant”) for the purpose of assisting with the upgrade of theKangaroo Island Airport at Kingscote which includes runway lengthening andstrengthening, apron expansion and construction of a new and upgraded terminal.

C. The Minister proposes to grant the Funds to the Grantee for the purposes of and toenable the Grantee to deliver the Project.

D. The parties agree that the Funds shall be granted on the terms and conditions of thisDeed.

IT IS AGREED:

1. DEFINED TERMS & INTERPRETATION1.1 Defined terms

In this Deed, the following defined terms apply unless the context requiresotherwise:Annual Report means the Annual Report referred to in Schedule 4.

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Application means the Grantee’s application for Funding and its attachments,as well as additional information provided to the Minister after the Minister’sreceipt of that application for Funding which the Minister determines is to beincluded as part of that application for Funding.Asset means any item of tangible property, purchased, leased, created orotherwise brought into existence wholly, or in part, with the use of the Funds,or for which the cost has been reimbursed by the Funds, which has at thattime a value of over $5,000 inclusive of GST, but does not include IntellectualProperty.Business means the business of the Grantee that is subject to this Deed andis directly and/or indirectly involved in delivery of the Project and does notinclude any unrelated business that the Grantee may own or have an existingor future interest in whether in South Australia or otherwise.Business Day means Monday to Friday excluding public holidays in SouthAustralia.CASA means the Civil Aviation Safety Authority.CASA Compliance means compliance with the rules and standards of theCivil Aviation Regulations 1988 (CAR), the Civil Aviation Safety Regulations1998 (CASR) and the Manual of Standard (MOS) 139 - Aerodromes and CivilAviation Safety Regulations.

Commencement Date means the date on which this Deed has beenexecuted by both parties.Commonwealth means the Commonwealth of Australia.Company Associate means a related body corporate or subsidiary of theGrantee within the meaning of the Corporations Act 2001 (Cth).Completion Date means the date specified in Schedule 1 (or such other dateagreed in writing by the PCB).Confidential Information means information disclosed by, or on behalf of, aparty to this Deed or by the Commonwealth that:(a) is by its nature confidential or by the circumstances in which it is

disclosed is confidential; or(b) is designated by the disclosing party as confidential or identified in terms

connoting its confidentiality,but does not include information which is or becomes public knowledge otherthan by a breach of this Deed or information which is included in this Deed.Control has the meaning given it in section 50AA of the Corporations Act2001 (Cth).Construction Contractor means a contractor or professional servicesconsultant engaged by the Grantee in relation to the Works or the Project.Deed means this Deed of Grant including all Schedules attached hereto andany document incorporated into this Deed by reference. Deed also includesany amendments and variations made to, and in accordance with, this Deed.Enabling Works Contract means a contract between the Grantee and anappointed construction contractor.End Date means the date specified in Schedule 1.

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Final Report means the Final Report referred to in Schedule 4.Funds or Funding means the funds payable to the Grantee under this Deedfor delivery of the Project in accordance with the Project Brief.Funds Amount means the amount specified in Item 8Grantee Representative means the person so appointed in accordance withclause 6.1.2 and named in Schedule 1.Governmental Agency means any Commonwealth or State governmentdepartment, authority, instrumentality or agency.Insolvency means:(a) an administrator is appointed to the Grantee or action is taken to make

such an appointment;(b) the Grantee resolves to be wound up;(c) an application is made to a court for an order or an order is made that

the Grantee be wound up (whether on grounds of insolvency orotherwise);

(d) the Grantee ceases to carry on Business;(e) a receiver or a receiver and manager of property of the Grantee is

appointed whether by court or otherwise;(f) an application is made to a court for an order appointing a liquidator or

provisional liquidator in respect of the Grantee or any one of them isappointed, whether or not under an order;

(g) the Grantee enters into a compromise or arrangement with its creditorsor a class of them; or

(h) the Grantee is or states that it is unable to pay its debts when they falldue.

Interest Rate means a rate of interest equal to the official cash rate publishedby the Reserve Bank of Australia plus 2%.Legislative Requirements includes:(a) Acts, ordinances, regulations, by-laws, orders, awards and

proclamations of the Commonwealth and the State or Territoryapplicable to the Project;

(b) certificates, licences, consent, permits, approvals and requirements oforganisations having jurisdiction applicable to the Project;

(c) Australian Standards, ISO Standards, the Building Code of Australia,and any other relevant standards or codes; and

(d) any policies or procedures of the Minister or the Commonwealth asnotified to the Grantee from time to time.

Liability means any liability or indebtedness, present or future, contingent oractual.Loss means any cost, expense, loss, damages, Liability or other amount.Minister’s Representative means the person appointed in accordance withclause 6.1.1 and so named in Schedule 1.

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Milestone means a stage of completion of the Project set out in the EnablingWorks Contract (howsoever described).Payment Notice has the meaning given to it in clause 12.2.1.PCB means the Project Control Board referred to in Schedule 3.Prepayment means an amount payable in advance to the Grantee inaccordance with clause 11A for the purpose of the Project and which will notexceed the amount specified in Item 9 of Schedule 1.Project means the project described in, or which can reasonably inferredfrom, the Project Brief.Project Brief means the detailed description of the Project as set out inSchedule 2.Repayment Amount means all amounts paid by the Minister to the Grantee

under this Deed up to the Repayment Date including any Prepaymentsmade under clause 11A.

Repayment Date means the date upon which the Minister demands paymentof the Repayment Amount from the Grantee.Repayment Event means any of the events described in clause 20.Reports means each of the Reports specified in Schedule 4.Security Interest means any security interest (including a “security interest”as defined under the Personal Property Securities Act 2009 (Cth)) andincludes a bill of sale, charge, lien, pledge, mortgage, lease or encumbranceof any kind.State means the State (being the government) of South Australia.Term has the meaning given to it in clause 3.Works means the works to deliver and construct the Project as set out in theEnabling Works Contract.

1.2 InterpretationIn this Deed, except where the context otherwise requires:1.2.1 the singular includes the plural and vice versa, and a gender includes

other genders;1.2.2 another grammatical form of a defined word or expression has a

corresponding meaning;1.2.3 a reference to a clause, paragraph, schedule or annexure is to a

clause or paragraph of, or schedule or annexure to, this Deed, and areference to this Deed includes any schedule or annexure;

1.2.4 a reference to a document or instrument includes the document orinstrument as novated, altered, supplemented or replaced from timeto time;

1.2.5 a reference to A$, $A, dollar or $ is to Australian currency;1.2.6 a reference to a party is to a party to this Deed, and a reference to a

party to a document includes the party's executors, administrators,successors and permitted assigns and substitutes;

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1.2.7 a reference to a person includes a natural person, partnership, bodycorporate, association, local authority, Governmental Agency or otherentity;

1.2.8 a reference to a statute, ordinance, code or other law includesregulations and other instruments under it and consolidations,amendments, re-enactments or replacements of any of them;

1.2.9 the meaning of general words is not limited by specific examplesintroduced by “including”, “for example” or similar expressions;

1.2.10 a rule of construction does not apply to the disadvantage of a partybecause the party was responsible for the preparation of this Deed orany part of it;

1.2.11 any body which no longer exists or has been reconstituted, renamed,replaced or whose powers or functions have been removed ortransferred to another body or agency, is a reference to the bodywhich most closely serves the purposes or objects of the first-mentioned body;

1.2.12 if a party consists of more than one person, this Deed binds themjointly and each of them severally; and

1.2.13 a reference to writing includes all modes of representing orreproducing words in a legible, permanent and visible form.

1.3 HeadingsHeadings are for ease of reference only and do not affect interpretation.

1.4 Inconsistency1.4.1 In the event of any ambiguity, conflict or inconsistency between:

(a) the clauses of this Deed including the Schedules; and(b) any Annexure; or(c) any other document incorporated by reference,the ambiguity, conflict or inconsistency shall be resolved in the orderof precedence set out in this clause 1.4 with clause 1.4.1(a) havingprecedence over clause 1.4.1(b) and so on.

1.4.2 If ambiguity, conflict or inconsistency is discovered by either party,then the party discovering it must promptly give notice to the other,and the Grantee must comply with the fair and reasonableinstructions of the Minister's Representative as to the course it mustadopt in respect of such conflict or inconsistency.

1.5 Unfettered discretionWhere the Minister is required to act reasonably under this Deed, it shall notbe required to take into account the Grantee's interest.

1.6 Nature of relationshipThis Deed does not create a relationship between the Minister and theGrantee of partners, joint venturers, fiduciaries, employer and employee orprincipal and agent.

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2. PURPOSE2.1 The Funds are not a gift, rather it is a grant provided on the terms of this

Deed.2.2 The Grantee must only use the Funds for the purpose of advancing the

Project in accordance with this Deed. The Grantee must not use the Fundsfor any other purpose.

2.3 This Deed or the provision of the Funds does not oblige the Minister to provideany funds for the Project in excess of the Funds Amount.

2.4 Except for the Minister’s role on the PCB and Project Team, the provision ofthe Funds is the Minister's only involvement in the Project. The Minister is notobliged to carry out any works or progress the Project in any other way.

2.5 Any Loss incurred by the Grantee under or in connection with the Project inexcess of the Funds shall be to the Grantee's own account, unless approvedotherwise in writing by the Minister prior to the Loss being incurred.

3. TERMThis Deed starts on the Commencement Date and ends on the End Date unless it isterminated earlier in accordance with its terms (“the Term”).

4. GRANTEE'S OBLIGATIONS4.1 The Grantee must:

4.1.1 use the Funds only for the Project and in accordance with this Deed;4.1.2 use reasonable skill, care and diligence that is expected of a

professional person, entity or organisation (as applicable) in theGrantee's field of expertise, or such higher standard as the Granteehas represented in writing to the Minister in relation to this Deed;

4.1.3 carry out the Project diligently, effectively and in good faith;4.1.4 carry out the Project in accordance with:

(a) this Deed;(b) all applicable Legislative Requirements;(c) any applicable recognised and best professional Australian and

industry standards relevant to the Grantee's field of expertise;and

(d) any safety, health, employment, environment, quality,indigenous heritage policies, plans or procedures, or any otherpolicies, plans or procedures, notified by the Minister to theGrantee from time to time;

4.1.5 ensure that anyone engaged on the Project by the Grantee will beappropriately qualified, skilled and trained to fulfil the role for whichthey have been engaged;

4.1.6 remain fully responsible for the Project despite any review, commenton, approval or acceptance of any aspect of the Project by theMinister;

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4.1.7 as soon as practicable after becoming aware of any matter orcircumstance which may adversely affect or has adversely affectedthe scope, timing or carrying out of the Project, give written notice tothe Minister detailing the matter or circumstance and its anticipatedeffect on the Project;

4.1.8 ensure that no conflicts of interest arises during the Term that couldaffect the Grantee's ability to perform its obligations under this Deed;

4.1.9 upon the Minister’s request, permit the Minister to inspect allbuildings, fixtures, fittings, machinery, implements, utensils, stock-in-trade and other things related to the Project and belonging to theGrantee or in which the Grantee may have an interest of whatevernature;

4.1.10 comply with its constitution or rules, if applicable;4.1.11 ensure that all payments of Funds it makes to Construction

Contractors or other third parties are correctly made and properlyauthorised and that it maintains proper and diligent control over itsincurring of liabilities in respect of its Project;

4.1.12 maintain accounting records in accordance with generally acceptableaccounting principles so as to enable all receipts and paymentsrelated to the Project to be identified (and all receipts and expenditureof the Funds to be separately identified) in the Grantee’s accountsand reported in accordance with this Deed, and to enable the audit ofthose records in accordance with Australian accounting standards;

4.1.13 prepare financial statements in accordance with Australianaccounting standards at the end of each financial year or, if the Termis less than one year at the end of the Term. The financial statement,signed by an appropriate senior office holder shall be submitted to theMinister no later than one calendar month after the expiry of theTerm;

4.1.14 where the Funding is in excess of $1 million (GST exclusive) in afinancial year or in excess of $1 million (GST exclusive) over theTerm of the Project, prepare financial statements in the nature ofgeneral purpose financial statements;

4.1.15 where requested by the Minister, provide management accounts,annual reports, financial statements and any other information ordocuments relevant to the Grantee’s operations;

4.1.16 not use any of the following as any form of security for the purpose ofobtaining or complying with any form of loan, credit, payment or otherinterest:

(a) the Funds;(b) this Deed or any contract between the Minister and the

Grantee; or(c) any obligations owed under this Deed or under any contract

between the Minister and the Grantee,unless the prior written consent of the Minister has been obtained;

4.1.17 provide all reasonable assistance to the Minister as the Ministerrequests for the purpose of the Commonwealth undertaking a finalreview of the Project;

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4.1.18 demonstrate to the Minister whenever required that all requirementsof this Deed for protection of the environment have been met;

4.1.19 not apply for or receive any form of funding or financial assistancefrom any Governmental Agency in connection with the activities of theGrantee contemplated by this Deed without first notifying the Minister;and

4.1.20 in performing works deal with and dispose of hazardous materials inaccordance with all Legislative Requirements.

4.2 The Grantee acknowledges and agrees that Funds will not be paid for claimsinvolving the Grantee’s own labour, the use of the Grantee’s pre-existingequipment, or any arrangement involving payment to relatives or closeassociates of the Grantee, unless the Minister’s Representative is satisfiedthat:4.2.1 the claim is for work that is an essential element in implementing the

Project;4.2.2 the person who performs the work is suitably qualified, insured and

appropriately licensed to carry out the work;4.2.3 the time taken to perform the work and the cost of the work is

assessed by the Minister’s Representative to be consistent andcompetitive with current local commercial market rates;

4.2.4 in the case of equipment, the equipment is suitably insured and theoperator is appropriately licensed to carry out the work; and

4.2.5 in all cases the arrangement is bona fide and not a sham.4.3 The Grantee acknowledges and agrees that Funds will not be paid for claims

involving ongoing labour costs associated with operating and maintaining newor improved infrastructure and equipment, or ongoing operational andmaintenance costs.

4.4 The Grantee must not assign, transfer, convey, novate, sell or otherwisedispose of or part with possession of (in whole or in part) any real or personalproperty in relation to which the Funds have been applied by the Granteewithout first obtaining the written approval of the Minister.

4.5 On expiry or termination of this Deed the Grantee must provide a report on thelevel of any unexpended Funds and the Grantee must repay any part of theFunds which is unexpended to the Minister, unless the Minister gives writtenapproval for the Grantee to retain the money.

4.6 The Grantee must notify the Minister if it becomes entitled to receive anyfinancial or in-kind assistance from a third party (other than theCommonwealth) in respect of the Project.

4.7 The Grantee must ensure that all works and services performed in connectionwith the Project are performed in a professional and workmanlike manner inaccordance with acceptable industry standards.

5. COORDINATION5.1 The Grantee acknowledges that the Minister may engage consultants or

contractors to provide services to the Minister in relation to the Project (at theMinister’s cost).

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5.2 The Grantee shall:5.2.1 liaise, cooperate and confer with contractors as is reasonably

required by the Minister; and5.2.2 not do anything that will impede or interfere with the contractors.

6. CONTRACT REPRESENTATIVES6.1 Throughout the Term:

6.1.1 the Minister shall ensure that it has appointed and notified, in writing,the Grantee of its Minister’s Representative (including any changes tothe identity or details of that representative promptly after the changeoccurs); and

6.1.2 the Grantee shall ensure that it has appointed and notified, in writing,the Minister of its Grantee Representative (including any changes tothe identity or details of that representative promptly after the changeoccurs).

6.2 The Minister’s Representative and the Grantee Representative must both beauthorised by the relevant appointing party to:6.2.1 receive and accept on that party's behalf any notice given by the

other party under or in connection with this Deed; and6.2.2 bind the appointing party with respect to all matters relating to this

Deed.

7. NO RELIANCE ON INFORMATION7.1 Unless otherwise provided in this Deed, the Minister does not warrant and will

have no Liability to the Grantee in tort (including negligence), equity or understatute for any Loss suffered or incurred by the Grantee, arising out of or inconnection with:7.1.1 any representation, warranty promise or statement (in each case,

whether express or implied) made by the Minister in respect of theProject; or

7.1.2 the completeness, adequacy, accuracy or content of the informationor the interpretations, deductions or conclusions which are given inthe drawings and specifications or in any reports, maps, drawings,diagrams or other information made available or disclosed to theGrantee by or on behalf of the Minister in respect of the Project eitherprior to or after the Commencement Date.

7.2 The Grantee acknowledges that it has not entered into this Deed in reliance ofany representation, warranty, promise or statement made by the Minister orany person on behalf of the Minister in respect of the Project.

7.3 The Grantee acknowledges that this Deed constitutes legal, valid and bindingobligations on the part of the Grantee which are enforceable against it inaccordance with its terms.

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8. GRANTEE’S WARRANTIES8.1 The Grantee warrants to the Minister that:

8.1.1 at the Commencement Date and as at the date or dates upon whichthe Funds are advanced to the Grantee no Repayment Event hasoccurred or is occurring;

8.1.2 the Grantee is qualified to carry on and is carrying on the Business;8.1.3 the Grantee has the power to enter into and perform its obligations

under this Deed and has taken the necessary corporate action toauthorise the entry into and performance of this Deed;

8.1.4 there are no threatened actions or proceedings before any Court orother body which will or are likely to materially adversely affect thefinancial position of the Grantee or its ability to perform its obligationsunder this Deed;

8.1.5 the Grantee is not in material default under any law, indenture,mortgage, trust deed, agreement or other instrument or arrangementby which it is bound;

8.1.6 the information contained in:(a) the Application (or information provided in relation to the

Application by or on behalf of the Grantee after the Applicationwas lodged); and

(b) any accounts, certificates, schedules or other documentssupplied to the Minister relating to the Grantee,

is, to the best of the Grantee’s knowledge and belief, true andaccurate in all respects and the opinions and forecasts expressedtherein (if any) are held bona fides and have been made on areasonable basis and there are no material facts known to theGrantee relating to the Grantee which could or might affect thewillingness of the Minister to enter into an agreement with theGrantee in terms similar to the terms of this Deed which have notbeen disclosed to the Minister.

8.2 The Grantee warrants to the Minister that, as at the Commencement Date, theGrantee believes on reasonable grounds that the Grantee will remain viableuntil at least 31 December 2019.

8.3 The Grantee acknowledges that the warranties made in this clause 8 haveinduced the Minister to agree to provide the Funds to the Grantee.

8.4 The Grantee acknowledges that each of the warranties in clause 8.1 shallsurvive the execution of this Deed and the provision of the Funds under thisDeed and will be correct and complied with in all material respects on theCommencement Date, the date or dates upon which the Funds are advancedto the Grantee, and thereafter until the End Date as if repeated continuouslyby reference to the circumstances existing at the time of such repetition.

9. PROJECT9.1 Reports

9.1.1 The Grantee must provide to the Minister the Reports at the timesand in the manner specified in Schedule 4.

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9.1.2 If the Minister requires further information in respect of, or anamendment to, a Report under clause 9.1.1, the Grantee mustpromptly provide that information or amended Report to the Minister(this process shall be followed until such time as the Ministerapproves or rejects the amended Report under this clause 9.1).

9.1.3 If the Grantee fails to provide additional information or to amend aReport as requested under clause 9.1.2, the failure or rejection of theReport will constitute a default.

9.2 Project Delivery9.2.1 The Grantee must deliver the Project in accordance with the Project

Brief in Schedule 2. The Project Brief can only be varied by writtenagreement of the PCB.

9.2.2 Each party must perform the roles and functions allocated to it inaccordance with Schedule 3.

9.3 Assets9.3.1 The Grantee must:

(a) ensure that all equipment and material purchased as part of itsProject:(i) is new (unless otherwise specified);(ii) is free from defects in materials, manufacture,

workmanship and installation;(iii) conforms to any legally applicable Australian standards or

other applicable industry standards;(iv) is installed correctly;(v) is of merchantable quality;(vi) is fit for purpose; and(vii) is consistent with the nature and character of the Project;

(b) not sell or dispose of any Asset, or deal with or use any Assetother than in accordance with this clause, without obtaining theMinister’s prior written approval, which may be given subject toany conditions the Minister requires;

(c) hold all Assets securely and safeguard them against theft, loss,damage, or unauthorised use;

(d) maintain all Assets in good working order;(e) if required by law, maintain registration and licensing of all

Assets;(f) be fully responsible for, and bear all risks relating to, the use or

disposal of all Assets; and(g) reinstate any Asset acquired with the Funds that is lost,

damaged or destroyed during the Term of this Deed.9.3.2 The Grantee consents to the Minister registering on the Personal

Property Security Register any one or more Financing Statements orFinancing Change Statements in respect of any Security Interestcreated by or contemplated under this clause, and undertakes to do

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all things reasonably required by the Minister to enable the Minister todo so.

9.3.3 The Grantee must promptly do anything required by the Minister toensure that any Security Interest granted to the Minister is a perfectedSecurity Interest and must ensure that any other Security Interestsregistered by third parties over an unfixed Asset are either dischargedpromptly or subordinated to the Security Interest of the Minister.

9.3.4 The Minister agrees to discharge any Security Interest created underthis clause, within 90 days of the End Date.

9.3.5 In clauses 9.3.2 to 9.3.5 (inclusive), capitalised expressions notdefined elsewhere in this Deed have the meaning given to them in thePersonal Property Securities Act 2009 (Cth).

10. DIRECTIONS10.1 Directions by the Minister

10.1.1 The Grantee must comply with all reasonable directions given by theMinister in respect of the Grantee’s obligations under this Deed.

10.1.2 A direction by the Minister under or in connection with this Deed (forexample, a direction to provide additional reports or information orattend meetings with the Minister or its agents, advisors andcontractors) shall be in writing.

11A PREPAYMENT11A.1 The Grantee may claim Prepayment, as an advance payment against the

Funds (but not as a payment claim), at any time before the Completion Date ifall the following apply:11A.1.1 the total amount claimed for Prepayment is no more than the amount

stated in Item 9 of the Schedule; and11A.1.2 the Prepayment does not exceed the remaining balance of the Funds

less any amount that the Minister considers payable by the Granteeto the Minister; and

11A.1.3 the Grantee has established to the Minister’s satisfaction that thePrepayment will be utilised to pay subcontractors and suppliers forgoods or services under an Enabling Works Contract or othercontract for a purpose related to the Project; and

11A.1.4 the Grantee has assigned to subcontractors and suppliers theirrespective shares of the Prepayment by effective writtenassignments, and has notified the Minister of the assignments,including the amounts assigned to each subcontractor or supplier.

11A.2 The Minister must pay the amount claimed within 14 days after the Granteeprovides evidence that all the conditions in clause 11A.1 have been met.

11A.3 The total Prepayment amount will be set off against payment claims asdetermined by the Minister during the course of the Project.

11. TIME AND PROGRESS11.1 General

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The Grantee must complete the Project by the Completion Date.11.2 Payment

11.2.1 The Grantee may submit a request for payment of Funds at the endof each calendar month for Works on the Project completed in thatcalendar month. Subject to the other provisions of this clause 11.2,Funds will be paid in arrears for Works completed and invoiced to theGrantee for a calendar month. Whether the Project or a portion ofWorks (as applicable) has been completed shall be determined by theMinister.

11.2.2 When the Grantee believes it has achieved completion of the Projector completion of Works (as applicable), it must submit to theMinister’s Representative:(a) a Report which substantiates that the Grantee has delivered or

completed the Works;(b) evidence which satisfies the Minister that the Grantee has

incurred and paid costs in an amount of at least the monetaryamount in the Funds request including any reports orcorrespondence prepared by the independent cost consultantsengaged by the Grantee; and

(c) a claim in accordance with clause 12.1 for the payment ofFunds in relation to the reimbursable costs invoiced to theGrantee with respect to that Work.

11.2.3 On receipt of the information specified in clause 11.2.2, and within 16days of receipt, the Minister will notify the Grantee in writing as towhether it believes that the Project or the Work (as applicable) hasbeen completed.

11.2.4 The Minister may have regard to information and representationscontained in the Application when determining whether the Project orWork (as applicable) has been completed. A material inconsistencybetween information and representations contained in the Applicationand the actual Project activities undertaken by the Grantee is asufficient ground for the Minister (at his discretion) to determine thatthe Project or Work (as applicable) is not completed.

11.2.5 Without limiting any other right the Minister may have under thisDeed, the Minister is not required to provide any Funds until suchtime as it is satisfied that the Project or Work (as applicable) has beencompleted.

11.2.6 Despite any Funds not being provided by the Minister under clause11.2.5, the Grantee must continue to perform its obligations underthis Deed.

11.2.7 The Grantee must take all reasonable steps to minimise delay incompletion of its Project, and must immediately notify the Minister if itbecomes aware that it will be delayed.

11.2.8 The Grantee's obligations under this clause 11.2 are in addition to theGrantee's obligations to provide Reports under clause 9.1.

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12. FUNDING12.1 Claim for Payment

12.1.1 A claim by the Grantee for payment of an amount of the Funds must:(a) be in the form of a valid tax invoice as defined in the A New Tax

System (Goods and Services Tax) Act 1999 (Cth) (“GST Act”);and

(b) be accompanied by such invoices, receipts, documents,evidence of insurance, records and other information as theMinister’s Representative may require relating to the claim forpayment of an amount of the Funds; and

(c) be accompanied by a certificate from an officer of the Grantee(duly authorised by the Grantee in that regard) certifying that:(i) the evidence submitted by the Grantee pursuant to clause

11.2.1 is true and correct; and(ii) the reimbursable costs in relation to which the claim for

payment of Funds has been made, relates to Workproperly delivered or completed.

12.2 Time and place for payment12.2.1 Subject to clause 12.4, within 14 days after the Minister has

approved, in writing, completion of Work under clause 11.2.3, theMinister shall:(a) determine the amount of the Funds that is payable to the

Grantee in respect of the Work, being the Minister'sassessment of the Funds applicable to the relevant Work minusthe amount of any debt due to the Minister or any claim by theMinister against the Grantee or any amount which the Ministermay otherwise be entitled to set off, withhold or deduct; and

(b) provide a payment notice, in writing, to the Grantee which:(i) identifies the payment claim to which the payment notice

relates;(ii) indicates the amount of the payment the Minister

proposes to pay; and(iii) if the amount the Minister proposes to pay is less than the

claimed amount, indicates why the amount proposed tobe paid is less and, if it is less because the Minister iswithholding payment for any reason, the Minister'sreasons for withholding payment,

(the “Payment Notice”).12.2.2 If the proposed payment amount indicated by the Minister in the

Payment Notice differs from the amount claimed by the Grantee:(a) the Grantee must withdraw the tax invoice included with the

claim; and(b) may issue a new tax invoice for the portion of the Funds

indicated as payable in the Payment Notice,

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and the Minister shall (subject to clause 13.5) pay the amountinvoiced in accordance with clause 12.3.1 or this clause 12.3.2 withina reasonable time.

12.2.3 If there is any dispute regarding the payment claim or the PaymentNotice, it shall be resolved in accordance with clause 23.

12.3 Payment is on account onlyPayment of Funds shall not be evidence of the value of work or an admissionof Liability or evidence that the Project or Work (as applicable) has beenexecuted satisfactorily or in accordance with this Deed but shall be a paymenton account only.

12.4 Conditions precedent to paymentIt is a condition precedent to the Grantee's entitlement to be paid the Fundsunder this Deed that:12.4.1 the Grantee has submitted to the Minister (to the Minister's

satisfaction):(a) a claim in accordance with clause 12.1;(b) the information required under clause 11.2.2;(c) proof of the insurances required under clause 15;(d) a valid tax invoice as required by clause 13;(e) all information that is required to enable the Minister to verify

any payment claim; and(f) any other information reasonably requested by the Minister;

12.4.2 all costs claimed by the Grantee have been properly incurred inaccordance with this Deed;

12.4.3 all monies payable by the Grantee to its contractors (including theMinister), subcontractors or suppliers that are due and payable havebeen paid;

12.4.4 its claim for the Funds, either alone or in aggregate with otherpayment claims, does not exceed the total of the Funds payable tothe Grantee under this Deed;

12.4.5 the Minister has issued a Payment Notice in accordance with clause12.2.1;

12.4.6 the Minister is satisfied (in the absolute discretion of the Minister) thatthe Grantee has complied in full with its obligations under this Deed,including but not limited to the delivery or completion of the Work inrelation to which the relevant claim for payment of an amount of theFunds is made by the Grantee and has issued a notice, in writing, tothat effect under clause 11.2.3; and

12.4.7 no default under this Deed by the Grantee subsists.12.5 Continued Performance of Project

Notwithstanding any withholding or suspension of any payment of Fundsunder this Deed, the Grantee must continue to perform its Project and itsobligations under this Deed, unless it has obtained the Minister’s prior writtenagreement to the contrary.

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12.6 Release from obligation to pay FundThe Minister shall immediately be released from any obligation to advance anyunpaid portion of the Funds to the Grantee if the Grantee commits asubstantial breach or a breach that cannot be remedied of any representation,warranty or obligation made by it under any other agreement the Grantee mayhave with the Crown in right of the State of South Australia or any otherperson.

13. GST13.1 Interpretation

In this clause 13, a word or expression defined in the GST Act has themeaning given to it in that Act.

13.2 Registration of GranteeThe Grantee acknowledges and represents that:13.2.1 it is registered under the GST Act;13.2.2 it is registered under the A New Tax system (Australian Business

Number) Act 1999 (Cth); and13.2.3 the ABN shown in Schedule 1 is its ABN.

13.3 WithholdingThe Grantee acknowledges that should the representations in clause 13.2 beor become incorrect, the Minister may be obliged under the TaxationAdministration Act 1953 (Cth) to deduct a withholding from the Funds and willnot be obliged to gross up the Funds or make any other compensation to theGrantee.

13.4 InformationThe Grantee must:13.4.1 provide information about the Grantee's GST status and ABN to the

Minister when requested by the Minister; and13.4.2 inform the Minister immediately if the Grantee ceases to be registered

under the GST Act or the A New Tax system (Australian BusinessNumber) Act 1999 (Cth).

13.5 GST gross up13.5.1 Subject to clause 13.6, the Minister will pay an amount calculated by

multiplying the Funds payable by the rate at which GST is levied atthe time of this Deed, unless the Minister considers that no taxablesupply exists in which case the Funds payable will not be grossed up.

13.6 Reimbursements13.6.1 Where the Funds are paid or payable by the Minister to the Grantee

as a reimbursement of monies expended by the Grantee on theProject:(a) the Funds are available to the Grantee only for the GST

exclusive costs incurred by the Grantee to undertake theProject; and

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(b) the GST inclusive amount of the expenses incurred by theGrantee (which are subject to reimbursement) will be firstreduced by any input tax credit the Grantee is entitled to, andthen increased in accordance with clause 13.5.

13.6.2 If a party must reimburse or indemnify another party for a Loss theamount to be reimbursed or indemnified is first reduced by any inputtax credit the other party is entitled to for the Loss, and thenincreased in accordance with clause 14.5.

13.7 Tax invoiceA party need not make a payment for a taxable supply made under or inconnection with this Deed until it receives a valid tax invoice for the supply towhich the payment relates.

14. FINANCIAL ACCOUNTS AND RECORDS14.1 The Grantee must provide the Minister with appropriate and regular

information, records and reports as the Minister may request from time to timeabout:14.1.1 the administration and financial affairs of the Grantee;14.1.2 the progress of and any change to the authorised scope of the

Project;14.1.3 any significant changes to the nature and scope of the activities

conducted by the Grantee;14.1.4 any other matter relevant to the granting of assistance;14.1.5 any other funding or financial assistance promised or received from

any source other than the Minister;14.1.6 the Grantee’s management of the Funding, including, but not limited

to, the economic and efficient use of resources to achieve theoutcomes of the Project; and

14.1.7 the performance of the Grantee’s undertakings and obligations underthis Deed.

14.2 The information provided by the Grantee must be sufficient for the Minister tomake an informed judgement about:14.2.1 the Grantee’s ongoing financial position and its resources and

expertise in relation to the Project;14.2.2 the Grantee’s performance in managing public moneys, acquiring and

using resources economically and efficiently and in achievingspecified objectives in relation to the Project;

14.2.3 the overall effectiveness of the Funding throughout the Term;14.2.4 compliance with Legislative Requirements and generally accepted

accounting principles; and14.2.5 compliance with the Grantee’s constitution and the conditions of this

Deed.14.3 The Grantee must permit any person authorised by the Minister or the

Commonwealth:

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14.3.1 to have access to and be provided with copies of all accountingrecords, documents and information in possession or control of theGrantee which relate to or which may affect the undertaking orcompletion of the Project;

14.3.2 to interview the officers, employees, contractors, representatives andagents of the Grantee on matters pertaining or relating to theoperations of the Grantee or undertaking of the Project;

14.3.3 at all reasonable times during the Term to enter and have access toany premises at which works or activities under or related to theProject are undertaken and allow those permitted to inspect thoseworks or activities; and

14.3.4 at all reasonable times during the Term to have access to any assetsor items, purchased, leased, created or otherwise brought intoexistence wholly, or in part, with the use of the Funds, or for which thecost has been reimbursed by the Funds wherever such assets oritems may be located.

14.4 Audit14.4.1 At any time, upon giving reasonable prior notice, in writing, to the

Grantee, the Minister (or its nominee) may audit the Grantee'sfinancial accounts and records, including financial informationrequired for the preparation of financial statements and invoices toverify the accuracy and completeness or basis of the amountsclaimed or to be claimed from the Minister by the Grantee.

14.4.2 If requested, in writing, by the Minister, the Grantee will make suchfinancial accounts and records available at a mutually convenientlocation during normal business hours together with sufficientcomputer access (for example, computer access where the financialaccounts and records are maintained in electronic format) to enablethe Minister (or its nominee) to audit those financial accounts andrecords.

14.4.3 The Grantee shall provide all reasonable assistance to the Minister(or its nominee) to enable the audit to be carried out.

14.4.4 The Minister will ensure that it (or its nominee) provides a copy of its(or its nominee's) report to the Grantee within a reasonable period oftime after the Minister's receipt of the report in a form satisfactory tothe Minister.

14.4.5 If the audit reveals that any amount claimed, or the financial basis ofany amount claimed, from the Minister by the Grantee is not accurateand complete in all material respects or in accordance with this Deed,then:(a) the Grantee must:

(i) correct the inaccuracy or incompleteness in the affectedfinancial accounts and records and reissue the correctedor completed financial accounts and records to theMinister;

(ii) promptly take steps to remedy the inaccuracy orincompleteness in its monitoring, measuring and reportingsystems; and

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(iii) pay the costs of conducting the audit promptly ondemand; and

(b) if the inaccuracy or incompleteness has affected the amount ofany payment made or to be made by the Minister under thisDeed including any payments to be made on termination, theMinister will determine the necessary adjustment to the affectedpayment and that amount will be deducted from the nextpayment or payments to be made to the Grantee until theadjusted amount is collected, or otherwise it will constitutemonies owing as a debt which is due and payable by theGrantee to the Minister on demand.

14.4.6 If audit discloses any fraud, false, misleading or negligent reporting inthe financial accounts and records, this will constitute a default and aGrantee substantial breach under this Deed.

14.4.7 The Minister's nominee under this clause 14.4 may include any thirdparty, including a qualified auditor, the State or the Commonwealth orany of their respective nominees.

15. INSURANCE15.1 The Grantee must take out and maintain:

15.1.1 if applicable, public liability insurance with an insurer approved by theMinister for a minimum value specified in Schedule 1;

15.1.2 workers compensation insurance as required by law;15.1.3 insurance over any Asset acquired by the Grantee pursuant to this

Deed for its full replacement value;15.1.4 any other policy of insurance:

(a) usually obtained and maintained by a professional and prudentperson pursuing a business enterprise of the same or a similarnature as the business carried on by the Grantee; and

(b) as may be required by any Legislative Requirement,on terms satisfactory to the Minister and which must be maintained by theGrantee for at least the Term and any longer period of time as may berequired by the Minister.

15.2 Prior to Commencement Date, and at any other time as may be requested, inwriting, by the Minister, the Grantee must provide to the Minister evidence ofthe insurances required to be taken out and maintained by the Grantee underthis Deed, including, where it is reasonably possible to do so, furnishing theMinister with certificates of currency or copies of the insurance policy.

16. INDEMNITY16.1 The Grantee will indemnify and keep indemnified the Minister against any

Loss suffered or incurred by the Minister arising out of or in connection with:16.1.1 a breach of this Deed by the Grantee (including a breach of any

warranty);

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16.1.2 an act or omission of the Grantee in relation to this Deed or itsemployees, agents or contractors (other than the Minister); and

16.1.3 without limiting clause 16.1.2, a claim by any person against theMinister in respect of personal injury or death or loss of or damage toproperty arising out of or in connection with the Project caused orcontributed to by the Grantee or its employees, agents or contractors(other than the Minister).

16.2 The Grantee's Liability to indemnify the Minister shall be reducedproportionately to the extent that:16.2.1 any negligent act or negligent omission of the Minister or its

employees, agents or contractors (other than the Grantee); or16.2.2 any act or omission (including a direction) of the Minister or its

employees, agents or contractors (other than the Grantee),contributed to the Loss.

16.3 This clause 16 survives the expiry or termination of this Deed.

17. LIMITATION OF LIABILITY - MINISTER17.1 Subject to clause 17.2, the total aggregate Liability of the Minister to the

Grantee under or in connection with this Deed whether in tort (includingnegligence), equity or under statute shall be limited to the amount specified inSchedule 1.

17.2 The Minister will have no Liability to the Grantee under or in connection withthis Deed whether in tort (including negligence), equity or under statute forspecial, indirect or consequential Loss under or in connection with this Deed,or for Loss in the nature of loss of profit, loss of opportunity, loss of businessor analogous economic loss.

17.3 This clause 17 survives the expiry or termination of this Deed.

18. INTELLECTUAL PROPERTY RIGHTS18.1 Intellectual property

The parties acknowledge and agree:(a) title to all intellectual property held by a party at the

Commencement Date will remain the property of that party;(b) without limiting anything else in this Deed, the Grantee will

indemnify and keep indemnified the Minister against Losssuffered or incurred by the Minister arising out of or inconnection with the completion of the Project by the Granteeinfringing the intellectual property rights of any person.

19. TERMINATION19.1 Termination for convenience

19.1.1 The Minister may terminate this Deed at any time without cause,upon giving 10 days’ notice, in writing, to the Grantee.

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19.1.2 If this Deed is terminated pursuant to clause 19.1.1, the Minister shallpay the Grantee a fair and reasonable fee for the work properlyundertaken in respect of the Project by the Grantee up to andincluding the date of termination together with payment of any costsand expenses reasonably incurred by the Grantee to that date.

19.1.3 In no circumstances will the amount payable under clause 19.1.2exceed the Funds and, if deemed appropriate by the Minister, theMinister may calculate the compensation as a pro-rata of the Funds.

19.2 Termination for Default19.2.1 If at any time a Repayment Event occurs the Minister may

immediately terminate this Deed by giving written notice to theGrantee of the termination.

20. REPAYMENT EVENTSThe occurrence of any of the following events at any time before the Minister has paidFunds to the Grantee in full is a Repayment Event:20.1 if the Grantee is subject to any form of Insolvency;20.2 if the Grantee breaches:

20.2.1 any of its warranties or representations under this Deed; or20.2.2 any of its obligations or undertakings under this Deed and has not

rectified such breach within the reasonable time frame specified in anotice given in writing by the Minister to the Grantee requiringrectification of the breach;

20.3 if a mortgagee enters into possession of any of the Grantee’s assets orproperty in the State or appoints an agent to enter into possession on itsbehalf;

20.4 in relation to this Deed, the Grantee commits a substantial breach of any lawof the Commonwealth, or of a State or Territory;

20.5 the Grantee ceases to carry on the Business;20.6 the Grantee withdraws from the Project;20.7 the Commonwealth withdraws funding or terminates its funding agreement

with the Grantee where such withdrawal or termination is due to a breach bythe Grantee of that agreement;

20.8 if at any time the Minister has compelling reasons or evidence that one ormore statements made in the Application (or information provided by or onbehalf of the Grantee after the Application was lodged) is incorrect,incomplete, false or misleading in a way which would have affected theoriginal decision to approve the Funding;

20.9 if there occurs any material adverse change in the condition or stability of theGrantee which in the reasonable opinion of the Minister could result in theGrantee being unable to perform its obligations under this Deed;

20.10 if there occurs a change in the Control of the Grantee without the previousconsent in writing of the Minister; and

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20.11 the Grantee receives or applies for any form of funding or financial assistancefrom any Governmental Agency in connection with the activities of theGrantee contemplated by this Deed without first notifying the Minister.

21. CONSEQUENCES OF REPAYMENT EVENT21.1 If at any time before the Minister has paid Funds to the Grantee in full a

Repayment Event occurs:21.1.1 the Minister shall immediately be released from any obligation to

advance any unpaid portion of the Funds to the Grantee; and21.1.2 the Minister may step-in to the role of the Grantee to complete some

or all of the Works. If the Minister so elects:(a) the Grantee must assign to the Minister the Grantee’s rights

and benefits in all its contracts and agreements in connectionwith the Works, warranties and unconditional undertakings,bank guarantees, insurance bonds, other security of a similarnature or purpose and retention held by the Grantee, with effectfrom the date of the Repayment Event;

(b) the Grantee must consent to a novation to the Minister or itsnominee of all subcontracts and its other contracts concerningthe Works, as required by the Minister; and

(c) the Grantee must do everything and sign all documentsnecessary to give effect to clause 21.1.2, and it irrevocablyappoints the Minister as its attorney to do this in its name if itfails to do so .

21.2 Nothing in this clause 21 shall affect the Minister’s right to recover any part ofthe Funds at that time already advanced to the Grantee pursuant to this Deedor any other of the Minister’s rights under this Deed which may have accruedpursuant to this Deed as at the date of the Repayment Event.

21.3 The Grantee acknowledges:21.3.1 that the Minister has concluded that it is in the interests of the public

of the State that he or she should provide the Funds to the Granteebut only upon the terms and conditions of this Deed;

21.3.2 that it is essential to the purpose for which the Funds are advancedpursuant to this Deed that:(a) where Funds are payable for delivery of a Project, the Grantee

uses the Funds for the Project; and(b) the Grantee does not permit a Repayment Event to occur;

21.3.3 that if a Repayment Event occurs the extent of the Loss or damagesustained by the Minister will be extremely difficult to assess orquantify accurately or to otherwise determine precisely;

21.3.4 that the Repayment Amount represents a genuine pre-estimate bythe Minister of the compensation which the Minister believes is fairand reasonable; and

21.3.5 that any amounts payable pursuant to this clause 21 are not and willnot be construed or deemed to be a penalty payable by the Granteefor the purposes of any applicable legal rule or norm.

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21.4 Subject to the provisions of this Deed, if a Repayment Event occurs at anytime, then notwithstanding any previous delay or waiver on the Minister’s part,the whole of the Repayment Amount shall immediately become due andpayable by the Grantee to the Minister as liquidated damages upon demandby the Minister.

22A CASA COMPLIANCE AFTER COMPLETION22A.1 The Grantee agrees to maintain CASA Compliance for the Kingscote

Aerodrome, Kangaroo Island for 20 years from Completion or the actual dateof Completion, whichever is later (“CASA Completion Date”).

22A.2 On the anniversary of the CASA Completion Date, and provided that theGrantee has achieved CASA Compliance for that previous year, one twentiethof the Funds will expire.

22A.3 If the Grantee fails to maintain CASA Compliance at any time within the 20year time period following the CASA Completion Date, then the Grantee willbe required to reimburse to the Minister the proportion of Funds as yetunexpired at the time of failure (rounded up or down to the nearest full year).

22A.4 The Grantee must provide a copy of the annual technical inspection reportand other relevant documentation each year within 21 days of receiving suchreports or documentation. The Grantee must also provide details of actions tomitigate any non-compliance issues identified as part of the technicalinspection process.

22A.5 If the Grantee is required to reimburse the Minster under this clause 22A, theparties agree that clauses 21.3.3, 21.3.4 and 21.3.5 apply to such payments.

22. SUSPENSION22.1 If, in the opinion of the Minister, it is necessary to suspend the Project

because of an act or omission of the Grantee, its agents, employees orcontractors (other than the Minister):22.1.1 for the protection or safety of any person or property; or22.1.2 to comply with a court order;the Grantee shall bear the cost of that suspension.

22.2 The Grantee shall not suspend the Project except with the approval in writingof the Minister.

23. DISPUTE23.1 Either party may, in a case of genuine urgency, seek immediate interlocutory

relief or an interim remedy.23.2 Subject to clause 23.1 neither party may commence legal proceedings without

attempting to resolve the dispute as follows:23.2.1 Level 1: The Infrastructure Delivery General Manager and the

Kangaroo Island Council Chief Executive Officer, must meet andundertake genuine negotiations to resolve the dispute or difference.

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23.2.2 Level 2: If the Level 1 representatives cannot resolve a disputeor difference within 28 days, either party may refer the matter toArbitration. The Arbitrator will be the person nominated in Item 10 ofSchedule 1, or if no person is named, a person nominated by theSouth Australian Chapter of the Institute of Arbitrators and MediatorsAustralia (IAMA) . The arbitration will be conducted by a singlearbitrator in Adelaide, South Australia.

23.3 Notwithstanding the existence of a dispute each party must continue toperform its obligations under this Deed.

23.4 This clause survives any expiry or termination of this Deed.

24. VARIATIONS24.1 No variation of this Deed is binding unless it is agreed in writing and signed by

both parties.

25. ASSIGNMENT25.1 The Grantee must not assign or novate its rights under this Deed without the

prior written consent of the Minister.25.2 The Minister may assign its rights under this Deed without the Grantee's

consent.

26. CONFLICT OF INTERESTWithout limiting clause 4.1.8:26.1 immediately upon becoming aware, the Grantee must notify, in writing, the

Minister of any conflict of interest that arises, or could arise, which may affectthe Grantee's performance of its obligations under this Deed. The notice mustset out the full particulars of the conflict of interest and steps taken by theGrantee to resolve the conflict of interest; and

26.2 the Grantee must comply with the Minister's direction, in writing, to resolve theconflict of interest, including the steps that the Grantee must take to resolvethe conflict of interest.

27. CONFIDENTIALITY27.1 Subject to this Deed, the party to this Deed to whom Confidential Information

is disclosed (“Receiving Party”) must not disclose Confidential Information toany person without first obtaining the written consent of the party disclosingthe information (“Disclosing Party”).

27.2 There will be no breach of the obligations of the Receiving Party under thisDeed if the Confidential Information is legally required to be disclosed orpermitted to be disclosed by this Deed.

27.3 The Minister may disclose this Deed and/or information in relation to this Deedin accordance with the requirements of the Department of Premier andCabinet Circular PCO27.

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27.4 The Receiving Party may disclose Confidential Information to its employees,advisers, agents, consultants and sub-contractors (“Authorised Persons”) if:27.4.1 the Authorised Person needs to know the Confidential Information for

the performance of his or her duties under this Deed;27.4.2 the Receiving Party notifies the disclosure to the Disclosing Party;

and27.4.3 the Receiving Party first makes the Authorised Person aware of the

confidential nature of the Confidential Information and requires theAuthorised Person to treat it confidentially.

27.5 Notwithstanding anything else in this Deed, it is a condition to any permitteddisclosure that the Receiving Party must notify the Disclosing Party promptly ifthe Receiving Party becomes aware of any unauthorised disclosure or use ofConfidential Information by a third party. The Receiving Party must give theDisclosing Party all assistance reasonably required by that party in connectionwith any proceedings which it may institute against any persons for thedisclosure or use.

27.6 The Receiving Party indemnifies the Disclosing Party against any Loss ordamage of third parties for which the Disclosing Party may become liable asthe result of:27.6.1 any disclosure or use of the Confidential Information in breach of this

Deed by the Receiving Party; or27.6.2 any unauthorised disclosure or use by an Authorised Person of

Confidential Information.27.7 The Grantee acknowledges that the Minister may disclose Confidential

Information:27.7.1 to Parliament, the Governor, Cabinet or a Parliamentary or Cabinet

committee or subcommittee;27.7.2 to any Governmental Agency, authority, instrumentality, minister or

officer of the State of South Australia to whom it is customary for theMinister to disclose the Confidential Information (whether or not theMinister is legally obliged to do so); or

27.7.3 for the purposes of prosecuting or defending any legal proceedings.27.8 The Grantee acknowledges that the Minister may disclose the Grantee’s

name, address, details of the Grantee’s Project, and any other personalinformation of the Grantee to any Government Agency for the purpose ofascertaining whether the Grantee has applied for or received any form offunding or financial assistance in connection with the activities of the Granteecontemplated by this Deed

27.9 The Minister acknowledges that the Grantee may disclose this Deed andrelated information for the purposes of the Grantee’s Elected Body of ofCouncillors approving the execution of this Deed.

27.10 Publicity27.10.1 The Grantee must obtain the Minister’s written approval for each

public announcement, or publication issued by, the Grantee thatrelates to the Project, the Funds or this Deed prior to the making ofthat announcement or issuing of that publication. In all publications,promotional and advertising materials, public announcements and

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public activities the Grantee must, and must ensure that itscontractors acknowledge the financial and other support provided bythe Commonwealth and the Minister for the Project, in the form andcontaining the information which must be approved by the Ministerprior to the issuing of the publication, material, announcement orundertaking of the public activity.

The Grantee agrees to participate in all promotional or publicity activities inrelation to this Deed as reasonably required by the Minister.

27.10.2 The Grantee must ensure that the Grantee’s employees, agents andsubcontractors are aware of and comply with the provisions of thisclause.

27.10.3 The Minister reserves the right to publicise and report on theawarding of the Funds. The Minister may do this by including inmedia releases, general announcements about the Funds and inannual reports:(a) the Grantee’s name;(b) the amount of the Funds provided; and(c) the title and a brief description of the Project.

27.10.4 The Minister may disclose this Deed and/or information in relation tothis Deed in either printed or electronic form and either generally tothe public or to a particular person as a result of a specific request.Nothing in this clause derogates from the Grantee’s obligations underany provision of this Deed or from the provisions of the Freedom ofInformation Act 1991(SA).

27.11 SurvivalThis clause 27 survives the expiry or termination of this Deed.

28. NOTICES28.1 Method of giving notices

A notice, consent, approval, application or other communication under thisDeed must be in writing, signed by or on behalf of the person giving it,addressed to the person to whom it is to be given and:28.1.1 delivered;28.1.2 sent by pre-paid mail; or28.1.3 sent by email,to that person's address.

28.2 Time of receipt of noticesA notice, consent, approval, application or other communication given to aperson is treated as having been given and received:28.2.1 if delivered, on the day of delivery if delivered before 4.00 pm on a

Business Day, otherwise on the next Business Day;28.2.2 if sent by pre-paid mail, on the day of actual delivery if delivered

before 4.00 pm on a Business Day, otherwise on the next BusinessDay; and

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28.2.3 if sent by email, on the day of actual receipt by the recipient (or uponthe sender receiving an electronic return receipt message generatedby the device on which the email was sent) if received (or if theelectronic return receipt message was received) before 4.00 pm on aBusiness Day, otherwise the next Business Day.

28.3 Address for noticesFor the purposes of this clause 28, a person (“sender”) may take the addressand email address of another person (“recipient”) to be the address and emailaddress set out in the details of the parties in this Deed, unless a differentaddress or email address is notified by the recipient to the sender, then to thelast so notified address or email address.

29. MISCELLANEOUS29.1 Entire Agreement

29.1.1 This Deed contains the entire agreement between the parties as tothe subject matter of this Deed.

29.1.2 All prior agreements and understanding between the parties inrelation to the subject matter of this Deed are superseded.

29.2 CostsEach party must pay its own legal and other costs and expenses ofpreparation, negotiation and execution of this Deed.

29.3 Compliance with LawThe Grantee must comply with the laws in force in South Australia in thecourse of performing its obligations under this Deed.

29.4 Indemnities29.4.1 Each indemnity in this Deed is a continuing obligation, separate and

independent from the other obligations of the parties and survives thetermination of this Deed.

29.4.2 It is not necessary for a party to incur expense or make a paymentbefore enforcing any indemnity conferred by this Deed.

29.5 Waiver and exercise of rights29.5.1 No party waives its rights under this Deed unless it does so in writing.29.5.2 A single or partial exercise or waiver by a party of a right relating to

this Deed does not prevent any other exercise of that right or theexercise of any other right.

29.6 Rights cumulativeExcept as expressly stated otherwise in this Deed, the rights of a party underthis Deed are cumulative and are in addition to any other rights of that party.

29.7 Further stepsEach party must promptly do whatever is necessary to give effect to this Deed.

29.8 CounterpartsThis Deed may consist of a number of counterparts and, if so, thecounterparts taken together constitute one document.

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29.9 No mergerThe rights and obligations of the parties under this Deed do not merge oncompletion of any transaction contemplated by this Deed.

29.10 Severability of provisionsAny provision of this Deed that is prohibited or unenforceable in anyjurisdiction is ineffective as to that jurisdiction to the extent of the prohibition orunenforceability. That does not invalidate the remaining provisions of thisDeed nor affect the validity or enforceability of that provision in any otherjurisdiction, unless this would materially change the obligations of one partywithout a consequential change in the obligations of the other.

29.11 No Mutual LiabilityNothing in this Deed renders a party liable for the debts or liabilities incurredby the other party.

29.12 Set OffAny amount due and payable by the Grantee to the Minister or the Crown inright of the State or any claim to money which the Minster may have (whetherfor damages or otherwise) pursuant to:29.12.1 this Deed;29.12.2 any other agreement that the Grantee may have with the Crown in

right of the State; or29.12.3 any agreement a Company Associate of the Grantee may have with

the Crown in right of the State of South Australia,may be set off against any amount due and payable by the Minister to theGrantee under this Deed.

29.13 Time Is Of The EssenceTime is of the essence in respect of any time, date, or period specified eitherin this Deed or in any notice served under this Deed.

29.14 Consents And ApprovalsWhere the Grantee requires the Minister’s consent or approval under thisDeed, the Minister may in its absolute discretion give or withhold its consent orapproval (subject to any provision in this Deed to the contrary) and if givingconsent or approval, the Minister may impose any condition on that consentthat it considers appropriate and the Minister’s consent or approval will not beeffective unless it is in writing and signed.

29.15 Governing Law and Jurisdiction29.15.1 This Deed is governed by and is to be construed in accordance with

the laws of South Australia.29.15.2 Each party irrevocably and unconditionally submits to the non-

exclusive jurisdiction of the courts of that place and any courts whichhave jurisdiction to hear appeals from any of those courts and waivesany right to object to any proceedings being brought in those courts.

29.16 Negation of Legal Relationship29.16.1 The Grantee, its employees, officers, volunteers, partners,

contractors, and advisers will not, by virtue of this Deed, be or for any

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purpose be deemed to be the Minister’s or the Commonwealth’s legalemployees, partners or agents.

29.16.2 The Grantee must not, and must ensure that its employees, officers,volunteers, partners, contractors, or advisers do not, represent theGrantee or themselves as being the Minister’s or theCommonwealth’s employees, officers, volunteers, partners orAdvisers or as otherwise able to bind or represent the Minister or theCommonwealth.

30. TRUSTEE OBLIGATIONS30.1 If the Grantee enters into this Deed as trustee of a trust:

30.1.1 it is liable both personally, and in its capacity as trustee of that trust;30.1.2 it must not assign, transfer, mortgage, charge, release, waive,

encumber or compromise its right of indemnity out of the assets ofthat trust, but retain and apply such indemnity only towards meetingits obligations under this Deed;

30.1.3 it must not retire, resign nor by act or omission effect or facilitate achange to its status as the sole trustee of that trust; and

30.1.4 it represents and warrants that:(a) such trust has been duly established and currently exists;(b) it is the duly appointed, current and only trustee of that trust;(c) as such trustee it has the power to enter into and perform its

obligations under this Deed;(d) it has an unqualified right of indemnity out of the assets of that

trust in respect of its obligations;(e) there is no conflict of interest or conflict of duty affecting it as

such trustee (and/or its directors, if any), or to the extent thatsuch conflict may exist it is overcome by the terms of the trustdeed; and

(f) no breach of the relevant trust deed exists or would arise byreason of entering into this Deed.

31. INDUSTRY PARTICIPATION POLICY31.1 The Grantee must implement the Grantee’s Industry Participation Plan

(“GIPP”) at Schedule 5.31.2 The Grantee’s failure to comply, in whole or in part, with the commitments

contained within the GIPP will be a factor taken into account in the award offuture contracts for the Government of South Australia.

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EXECUTED AS A DEED

THE COMMON SEAL of the MINISTER )FOR TRANSPORT AND INFRASTRUCTURE )was hereunto affixed, in the presence of: )

…………………………………………………………….Signature of Witness

[Print Name of Witness………………...………………]

THIS DEED is executed as a deed by )affixing the COMMON SEAL of )KANGAROO ISLAND COUNCIL )in the presence of: )

…………………………………………………... ………………………………………………Principal Member Chief Executive Officer

Name:………………………………………….. Name:………………………………………

Page 1 of 2


SCHEDULE 1

COMMERCIAL DETAILS

ITEM 1 GranteeName: Kangaroo Island Council a body corporate established

under the Local Government Act 1999 (SA) ABN 93 741277 391

ABN: 93 741 277 391

Address: 43 Dauncey Street, Kingscote. South Australia 5223

Email: [email protected]

ITEM 2 Completion Date31 December 2018

ITEM 3 End DateThe day after the Grantee has done all that it is required to do underthis Deed to the Minister’s satisfaction (acting reasonably).

ITEM 4 Minister’s RepresentativeName (Title): Jon Whelan (General Manager, Infrastructure Delivery)

Address: Level 1, 77 Grenfell Street, Adelaide 5000

Tel: 8343 2269 / 0408 857 495


ITEM 5 Grantee RepresentativeName (Title): Andrew C Boardman (Chief Executive Officer)

Address: 43 Dauncey Street, Kingscote. South Australia 5223

Tel: 08 8553 4506


ITEM 6 Public Liability InsurancePublic liability insurance to the value of at least $10 million per claim,or occurrence giving rise to a claim, in respect to activities undertakenunder this Deed, where occurrence means either a single occurrence

Page 2 of 2


or a series of occurrences if these are linked or occur in connectionwith one another from one original cause, as the case may be.

ITEM 7 Limit of Liability – MinisterThe aggregate of all Funds payable under this Deed.

ITEM 8 Funds AmountNine million dollars ($9,000,000) (GST exclusive)

ITEM 9 Prepayment Amount$400,000

ITEM 10 ArbitratorNot specified

SCHEDULE 2

PROJECT BRIEF

Project DescriptionThe project to be undertaken by the Grantee is the Upgrade of Kangaroo Island Airport at Lot 150Arranmore Road, Cygnet River, South Australia, 5223.

The Upgrade of Kangaroo Island Airport will include the following works:

Airside construction works:• construction of runway extension with associated civil works, and lighting suitable for

the compliant use of Code 3C aircraft;• strengthening overlay and upgraded surface treatment for the existing runway

pavement utilising such materials deemed appropriate by professional engineerssuitable for the compliant use of Code 3C aircraft;

• additional piping, culverts, open drain excavation concrete overlays over existingstormwater infrastructure as required to maintain compliant use by Code 3C aircraft;

• appropriately engineered existing pavement strengthening and widening of existingtaxiways and aprons together with relocation and enhancement of existing taxiway andapron lighting for the compliant use of Code 3C aircraft;

• replacement of main runway approach lighting with PAPI system;

Terminal enhancement works to IATA Class C Standard, which will include:• at least one covered baggage screening and loading area with associated general

security equipment and freight storage;• at least one check-in area with at least two airline offices;• at least one food and beverage retail area with room for at least 30 seats;• at least one general retail area;• at least one passenger and baggage screening area with at least one passenger

screening room;• at least one secure departure lounge with seating and amenities to include:

at least one female, one male, one accessible and one parent amenities;• at least one arrivals lounge with seating and amenities to include:

at least one female, one male and one disabled amenities;• at least two car hire offices and storage facilities• at least one covered baggage reclaim area;• at least one staff room;• at least one room catering for staff amenities;• at least one airport management office; and• at least one bus / coach / passenger pick-up drop off area with at least one electric

vehicle chargepoint.

BUILDING PROJECTS


SCHEDULE 3

PROJECT PARTNERSHIP FRAMEWORK

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1. PURPOSE OF PARTNERSHIP FRAMEWORK

The purpose of this Partnership Framework is: to provide a formal project framework defining all key roles, obligations,

responsibilities and accountabilities;

to assist in ensuring that the project is rigorously controlled to meet all performanceand accountability obligations to Government and Kangaroo Island Council.

2. PROJECT FRAMEWORK

The objective of this Partnership Framework is to create an effective managementprocess for the parties and which assures accountable collaboration throughout theconstruction project delivery process.A key aspect of successful project delivery is a shared understanding of the roles andaccountabilities of the parties and these are set out below.

2.1 KI CouncilKI Council is responsible for:

articulating the project requirements;

determining and justifying the scope of the project based on service delivery needand the strategic directions;

determining the budget and the key priorities within the budget;

input to the design, design development and documentation and signing-off of theproject deliverables and outcomes;

ensuring there is appropriate consultation;

determining and implementing appropriate design and construction procurementprocesses and managing tendering and contract execution processes for theconstruction contractor;

managing the services of the construction contractors in conjunction with theProject Manager;

acting in formal roles of Client’s Representative, Superintendent andSuperintendent’s Representative or equivalent in all contracts with the buildingindustry;

review process utilising internal or external resources including: costings design; construction advice; thereby facilitating that building industry best practice is achieved;

ensuring via the Project Control Board (PCB) delivery of the project is within theapproved scope, quality, time and cost;

ensuring that the project satisfies all requirements of sound prudentialmanagement;

Page 2 of 10


ensuring that the Professional Services Contractor(s) (PSC) are fully briefed on theoperational and functional needs;

ensuring that the brief is agreed and adhered to after sign off; and

facilitation of the project during construction and commissioning.

2.2 DPTI Infrastructure Delivery (Building Projects)Building Projects in conjunction with KI Council, is responsible for:

submitting proposals through all governmental approval stages;

ensuring internal Government reports, i.e. DPTI Portfolio Management Office(PMO), Parliamentary Public Works Committee (PPWC) during the project and oncompletion are provided to Government and KI Council as required;

input to the design, design development, documentation and construction phases;

input via the Project Control Board (PCB) in relation to project scope, quality, timeand cost;

2.3 Project Organisation StructurePCB

PROJECT TEAM

DPTI General ManagerInfrastructure Delivery

Chair

DPTI General ManagerPlanning and Transport

Policy

Kangaroo IslandCouncil

Chief Executive Officer

Building Projects

(as required)

(tbd)Construction

ContractorLead PSC Cost Manager

Building ServicesConsultant

Structural/CivilConsultant

Project Manager(Chair)

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2.4 Governance

2.4.1 PCBEach party will provide executives who have the authority to make project scope, budget,program and risk decisions, meet regularly and take action on the following terms ofreference.MembersThe PCB will consist of:

DPTI General Manager Infrastructure Delivery (Chair)

DPTI General Manager Planning and Transport Policy

Kangaroo Island Council Chief Executive OfficerIn attendance from the Project Team (but not part of the PCB):

Project Manager

Project Team members as required.Terms of ReferenceThe PCB will meet monthly throughout the project to:

overview the project ensuring that it is effectively managed and meets appropriateaccountability and prudential management requirements;

review and endorse/reject all major proposed PSC and construction contractorappointments;

monitor the project’s operations to ensure that the necessary project approvals arein place and the prescribed processes and policies of Government and KI Councilare adhered to;

review and endorse/reject recommendations and provide broad guidance to theProject Team as required;

receive and comment upon regular progress reports from the Project Team;

review, endorse/reject and monitor the procurement mechanisms recommendedby the Project Team;

consider and reject /approve key project decisions including:o any changes to the concept design and the final design;o any material changes to the design or scope;o all variations;o all delay claims, extension of time or scope claims by the building

contractor;o any liquidated damages claims;o any other claim that may impact on the scope or timing of the project

other than to the extent that the PCB has agreed to delegate such function toanother person.

comment on and endorse major project documents; and

consider, advise and formally report to KI Council and Chief Executive DPTI on

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any issue relevant to the effective delivery of the project.

2.4.2 Project TeamEach party will provide representatives who must have the authority to make projectmanagement decisions, meet regularly and take action with on following terms ofreference. The Project Manager shall chair and minute the meetings.MembersThe Project Team will consist of:

Project Manager (Chair)

Lead PSC Representative

Cost Manager Representative

Construction Contractor RepresentativeIn attendance:

Site/design team members as required

Building Projects representative as required.Terms of ReferenceThe Project Team reports through the Project Manager to the PCB and is accountablefor the effective day-to-day management of the project.The Project Team will meet fortnightly throughout the project to:

prioritise and monitor to ensure that the project is completed to the agreed brief;

prioritise and monitor to ensure that the project is completed to the agreed budget;

prioritise and monitor to ensure that the project is completed to the agreedprogram;

prioritise and monitor to ensure that the project is completed to the agreed quality;

assess the project risks and instruct the formulation of strategies and plans tomanage them;

establish the roles and responsibilities of all project team members;

monitor the project so as to ensure that appropriate resources are provided to theproject;

provide ongoing comprehensive professional contractual, financial, technical andrisk management of the project through regular review meetings and review of themonthly project manager, Lead PSC, cost manager and contractor reports;

make all recommendations as required to the PCB as applicable, for PSC andconstruction contractor appointments;

consult with Building Projects on best practice project procurement process;

ensure briefs as required are comprehensively established and that effective sign-off endorsement is achieved;

initiate the required value management reviews and any design reviews deemedappropriate;

report to the PCB as applicable, highlighting any issues that may change any

Page 5 of 10


approvals advising of the proposed actions to overcome the problems;

act as a forum for review of contractual matters/issues as necessary;

provide all reports and manage audits in accordance with requests from BuildingProjects; and

advise the PCB on any matter relevant to the project.

2.5 Scope ManagementOnly the PCB may authorise variations to the agreed scope of the project in the form ofadditional works or value management options that significantly change the projectscope, provided such variations are within the approved budget.

2.6 Procurement ManagementKI Council will manage the process of calling for construction contractors to ensure that:

there is effective opportunity for construction contractors to contribute toconstructability management;

innovative as well as conventional procurement models will be considered indetermining the form of project delivery;

construction contractors have the necessary capacity and skills as demonstratedthrough prequalification or equivalent; and

the principles of the South Australian Industry Participation Policy are met.

2.7 Cost ManagementThe PCB will only initiate work within the approved project budget and expenditure.KI Council will engage external, independent cost managers. The cost managers willadvise on all cost matters throughout the project including:

a comprehensive cost plan and maintaining currency of the plan to form the basisof Ministerial/Cabinet advice/submissions and Client reporting requirements;

progressive cost estimating and monthly reporting;

cost evaluation advice and input into any required savings strategy;

certification of PSC and construction contractor payment claims;

validation of contract variation claims; and

reconciliation of cost against budget at Tender phase and at the end of theConstruction and Review phases (and if required a value management studyduring the Design phase to ensure that the scope and budget are aligned).Building Projects may appoint an internal resource to provide an overview of thecost manager’s report and act as an independent reviewer to highlight any riskissues which may impact on the project budget with recommendations on theirmanagement.

2.8 Time ManagementKI Council will be responsible for the project program including key activities andmilestones to ensure the project is completed on time and on budget.

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2.9 Quality ManagementKI Council with the assistance of Building Projects will:

conduct reviews of the design at the Concept, Design and Documentation phasesto ensure that the contract material provided by the PSCs meets the briefedrequirements and all industry best practice policies and standards;

ensure that the construction contractor meets the requirements set out in thespecifications, drawings and schedules under the construction contract;

ensure that all PSCs and construction contractors appointed to the project operateeffective quality assurance systems.

2.10 CommunicationsKI Council will provide all information, in accordance with applicable laws, to enable theproject to comply with any SA Government requirements.KI Council will be responsible for comprehensive formal reporting including:

monthly throughout the project to the completion of Construction phase;

at handover;

at final completion;The reports shall include as applicable:

- project status;- program and predicted milestone dates;- current risk issues and opportunities, and any areas of change;- safety management matters;- scope, approvals, end user and communications management;- current estimate of cost compared with approved budget;- description of contingency commitment, residual uncommitted contingency,

and assessments of adequacy of residual (note contingency commitmentmust include known pending commitments/expenditures);

- predicted cashflow assessed against the agreed cashflow with explanationsof variance;

- item by item explanation of all authorised and pending variations to contracts;- assessment of Furniture, Fittings and Equipment (FF&E) budget

commitment, residual uncommitted budget and assessments of adequacy ofresidual;

2.11 Airport Compliance and CertificationKI Council will ensure:

Civil Aviation Safety Authority (CASA) compliance – The airport needs to beCASA compliant through the runway upgrade construction phase to maintainregular passenger transport services as a certified aerodrome.

To remain a Certified Aerodrome throughout the life of the asset, compliance withthe Manual of Standards (MOS) 139 – Aerodromes and Civil Aviation SafetyRegulations.

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In addition, KI Council agrees to ensure the compliance and certification requirementsabove are maintained for a period of 20 years from final completion.

- assessment of design progress, design risks and outstanding contractualmatters;

- assessment of on site progress, construction risks and outstandingcontractual matters; and

- other relevant information.

Provision of monthly/quarterly reports as required by the CommonwealthGovernment.

3. PROJECT ADMINISTRATION

3.1 Project AccountingKI Council will only make payments to the construction contractors in accordance withthe relevant conditions of contract and will seek reimbursement of the payments fromDPTI in accordance with the terms of the Funding Deed.

3.2 Authority to Instruct Contract Instructions (Variations and Contract Memos)Subject to PCB approval, KI Council is empowered to issue Contract instructions asnecessary to ensure the timely progress of construction. The authority is limited to theextent of the approved contingency funding and issue will be subject to any requiredexpenditure being approved by the PCB (unless there are urgent circumstances).If variations are required, the cost of such variations will be funded by KI Council from itsconstruction contingency, which is intended for:

resolving construction problems created by any requirement for design change orcreated by documentation error or omission without amending the scope of works;

resolving construction problems created by unforeseen circumstances includinglatent conditions or constraints on work methods or time, excluding industrialdisputes; and

paying any extra costs for which KI Council is liable (such as Principal causeddelays).

3.3 Project RecordsKI Council will ensure that a detailed project record that satisfies all accounting and auditrequirements are maintained providing details of all:

approved and pending variations;

approved and pending extension of time claims;

performance/status appraisals;

contractual issues/disputes;

correspondence;

meeting records;

quality assurance records; and

Page 8 of 10


statutory and other approvals.Both parties will individually ensure comprehensive records of their managementactivities in the project are maintained to enable all Auditor-General, legal, and Freedomof Information obligations to be met.

3.4 Project AuditKI Council and DPTI acknowledge the audit and reporting requirements of Treasurer’sInstruction 15 (Grant Funding).In addition, Building Projects Contracts Manager in conjunction with the Project Manager,may initiate appropriate audit of the performance of the project to ensure requirementsfor scope, time, cost, quality and any relationship agreement are being met. The agreedminimum audit points may include:

Completion of Concept

Completion of Documentation

3 months into Construction

12 months into Construction

Post-construction Review 3 months after handover.

4. BUILDING PROJECTS ROLE

KI Council in conjunction with the Building Projects, will ensure that the policy andprogram objectives of government concerning the building industry are honoured andimplemented as part of the project delivery.The key elements of KI Council’s role is outlined below.

4.1 Contract ManagementKI Council with assistance from Building Projects if required will:

Review the brief for clarity of scope, stated purpose and technical content.

Advise on the implementation of Government building standards as applicable.

Attend and participate in strategic value management and value managementworkshops.

Select contract form for construction contractors and prepare contract documents.

Select construction contractor short lists, call tenders, coordinate tender appraisaland tender recommendation and execute contracts.

Ensure the principals of the South Australian Industry Participation Policy are met.

Administer contracts as Principal, Superintendent and Superintendent’sRepresentative (or equivalent).

Make contract payments to construction contractors.

Advise on on-site inspection plans.

Manage dispute resolution, liquidations and bankruptcies if applicable.

Manage and make payments for project disbursements including principal

Page 9 of 10


controlled insurance and contract printing.

Review the project program for key activities and milestones.

Advise on quality standards for PSCs, construction contractors and buildingdesign.

Identify project risks and classify projects into high, medium and low riskcategories.

Advise on, implement and manage a project plan for risk minimisation andmanagement.

Assist with the preparation of statutory and government approval documents.

Assist with project reporting and keep project records.

Assist with implementation of governance and project organisation arrangements.

4.2 Budget Risk ManagementKI Council with assistance from Building Projects if required will:

Establish and audit project budget.

Overview the PSC cost planning and estimating advice.

Overview and supplement financial reporting.

Attend and participate in strategic value management and value managementworkshops.

Liaise with design PSCs and provide cost advice on materials alternative methodsand construction systems during the design process to ensure that all costimplications are considered in design team decision making.

Process progress payments and contract variations.

Oversee financial finalisation of contract.

4.3 Design Risk ManagementKI Council with assistance from Building Projects Manager if required will:

Review the project brief.

Liaise with the appointed PSCs at all project phases to ensure the PSC has accessto all the available design knowledge.

Advise the PSC on relevant agency and government design standards.

Ensure the design meets KI Council’s brief.

Expertly review the architectural, engineering and technical solutions on behalf ofKI Council at key stages during the project process including end of ConceptDesign, Project Definition and through Contract Documentation.

4.4 Construction Risk ManagementKI Council with assistance from Building Projects if required will:

Meet with PSCs in early design stages and advise on appropriate design.

Review PSC drawings and specifications for design details and methodology.

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Provide advice/assistance to architects, engineers and other PSCs andconstruction contractors on technical matters, materials, good trade practices,standards and contractual obligations.

Monitor the performance of PSCs and construction contractors.

Develop construction detailing and methodology standards and practices on siteinspection.

monitor and manage the construction site Work Health & Safety (WHS) obligations.

Manage the on-site control and co-ordination of all construction projects bymonitoring works in progress.

4.5 Procurement ManagementKI Council with assistance from Building Projects if required will:

Provide consistent and legal conditions of tender for process and probity risksarising from contracting with the private sector.

Manage probity of tender and contract acceptance.

Ensure tender documents are accurate and satisfy industry best practiceprocurement procedures.

Manage the processes of tendering and the execution of contracts.

Understand implications of delegations/approvals and contract acceptance.

Identify and advise on potential claims before acceptance of contract.

Prepare special conditions to accompany standard contract conditions forparticular projects where appropriate.

Match conditions of contract to project outcomes, seek strategic response toproject procurement.

Ensure proper execution of contract documents.

Provide advice on contractual matters and support the Superintendent (orequivalent) and the Principal/Client.

Manage securities to be provided by construction contractors.

Protect the Principal from breach of contract during contract administration.

Apply and manage Government and Client risk management through insurancecompliance.

Minimise default bankruptcies and liquidations of contractors.

Provide consistent contract advice with regard to potential matters of dispute.

Manage contract dispute resolution and the resolution of contractor disputes..

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SCHEDULE 4

REPORTS

The Grantee must provide the following Reports:

Annual Reports

The Grantee shall, no later than 30 September in each year of the Term, provide anAnnual Report reporting on the progress of the Project. If the Term does not span morethan one financial year the Grantee will only have to provide the Final Report inaccordance with this Schedule 4.

The Annual Report will report on:

the performance of the Project; the achievement of Work or Milestones during the reporting period and progress

towards Work or Milestones scheduled to be achieved in the next reportingperiod;

any significant variations requested by a Construction Contractor and agreed toby the Grantee;

the performance of the Project against budget forecast; and significant activities and events that occurred during the reporting period.

Final Report

The Grantee must provide a Final Report reporting on the outcome of the Project.

The Final Report will report on:

the performance of the Project overall against the Project Brief; the achievement of Work or Milestones; any significant variations requested by a Construction Contractor and agreed to

by the Grantee during the course of the Project; the performance of the Project against budget forecast; and significant activities and events that occurred during the Term.

A failure by the Grantee to provide the Annual and Final Reports by the required dates willconstitute a substantial breach of this Deed by the Grantee.

Financial Statements

In accordance with the provisions of clauses 4.1.14 and 4.1.15 of this Deed preparefinancial statements at the end of each financial year and at the end of the Term, or ifthe Term is less than one year at the end of the Term.

Other

The Grantee must provide to the Minister such other reports as the Minister mayreasonably require from time to time.

Page 1 of 1


SCHEDULE 5

GRANTEE’S INDUSTRY PARTICIPATION PLAN

1. INDUSTRY PARTICIPATION POLICY1.1 The Grantee must complete and implement an Industry Participation Plan

(“IPP”) in a form to be agreed with the Industry Participation Advocate, prior tothe release of work packages for tender.

1.2 The Grantee must apply a 20% industry participation weighting in respect ofthe tendering of work packages.

1.3 The Grantee must provide an Industry Participation Report (“IPP Report”) inrespect of each Industry Participation Reporting Period within two weeks ofthe end of each period, in the format reasonably required by the Ministerincluding all the information indicated in that annexure.

1.4 The “Industry Participation Reporting Period” means:1.4.1 the period between the date of commencement of this Agreement

and the date six (6) months after that date;1.4.2 each subsequent six (6) month period during the Term;1.4.3 if this Agreement ends on a date that is not an anniversary of the

Commencement Date or an anniversary of the date of the expiry ofthe period specified in sub-clause 1.4.2, the period from theconclusion of the preceding Industry Participation Reporting Perioduntil the date of termination or expiry of this Agreement; and

1.4.4 where the Term is for a period less than six (6) months, the entireTerm.

1.5 The Grantee must attend any meeting scheduled by the IPA during the Termto review how the IPP is being implemented and advanced, and for thispurpose. The Grantee must provide all information reasonably requested bythe IPA. The IPA must give the Grantee not less than ten (10) Business Daysnotice of any such meeting.

1.6 In this clause, “Industry Participation Advocate” or “IPA” means the personwho from time to time has been appointed to the position of IndustryParticipation Advocate within the Office of the Industry Advocate, situatedwithin the Department of State Development, or his/her successor.

1

KANGAROO ISLAND AIRPORT

IPP PLAN

Funding Agency: DPTI

IPP Plan manager: Office of the Industry Advocate (OIA)

Grantee: Kangaroo Island Council

Proponent/s: [the head contractor/s selected by Kangaroo Island Council to build theworks]

Works: [scope of the project/s subject to development by a Proponent]

Industry Participation Plan

1. The Grantee will be issuing tenders for head contractor selection on the works forthe Proponent.

2. When the Grantee issues these tenders it will apply a 20% industry participationweighting in the selection criteria of the Proponent(s) over who will win thecontract(s).

3. If there is more than one contract for the works, then each part of the works willhave an Industry Participation Plan (IPP Plan) for each Proponent.

4. The tenderers will be required to complete IPP Plans in the form attached(Attachment 1). These Plans will be assessed by the Grantee and given relativeassessments under the weighting based on the level of net benefit to the SouthAustralian economy, such as in the form of labour from residents of South Australiaand sub—contractors based in South Australia.

5. The Grantee is required to account as per reporting format for the estimated benefitto the South Australian economy in their Proponent’s IPP Plan and Grantee will beresponsible for ensuring that benefit is delivered by the works.

6. The Proponent will not be required to use an industry participation weighting inselection of sub-contractors as delivery is accounted for in the estimated benefit andreporting mechanism.

7. The Grantee will advise DPTI and OIA on the scope of the commitments in thewinning tender under the IPP Plan submitted.

8. The Grantee will be required to obtain the relevant reports and accounts of progressagainst the IPP Plan commitment as set out in Schedule 5 of the contract and in theformat for reporting.

2

ATTACHMENT 1

KANGAROO ISLAND AIRPORT

INDUSTRY PARTICIPATION PLAN

Funding Agency: DPTI

IPP Plan manager: Office of the Industry Advocate (OIA)

Project Manager: Kangaroo Island Council

Proponent: [the head contractor selected by Kangaroo Island Council to build the works]

Works: [scope of the project subject to development by a Proponent]

Labour used by the Proponent

1.1 The Proponent commits to use approximately [XXXX] labour hours from residents ofSouth Australia to deliver the works. (refer Table 1)

1.2 The Proponent estimates that the [XXXX] labour hours has a value of $X.X million.

Supply Chain use

2.1 Table 2 sets out the sub-contracts that will be used on the works and the approachto market to be pursued. Table 3 sets out the capital equipment to be utilised on theworks and where it is from.

2.2 If any sub-contracts for the works are not already awarded or signed the Proponentwill make a reasonable estimate of the likely sub-contractors and their benefit toSouth Australia in Tables 2 and 3. The Proponent will use its reasonableendeavours to seek and obtain contracts with businesses which have a significantSouth Australian presence, such as a workforce which is used to deliver the sub-contracting.

2.3 The OIA and/or DPTI may from time to time require evidence of these commitmentsand their implementation beyond the reporting and this will be provided to theGrantee for this to occur.

Reporting under the IPP Plan (See Appendix 1)

3.1 The Proponent will report every 6 months after the contract commences until it iscompleted to DPTI. At completion there will be a final account against the IPP Planof outcomes even if this is during a period less than 6 months since the last report.

3.2 The Proponent will account in the reporting format set out in Appendix 1 for:

3.2.1 labour in the reporting template (Table 1), and

3.2.2 the sub-contracts (Table 2) and the capital equipment (Table 3).

3

TABLE 1

(a) direct labour expected for the project to beperformed by the contracting entity (including CasualStaff, Contract Staff, etc.) excluding self-performedwork packages

(b) direct labour from (a) that will be performedby South Australian residents (as stated as theirprincipal place of residence on their tax return attime of tender)

hours hours

$ $

[Please also specify the positions in an excel spreadsheet that constitute theassessment of labour hours]

4

TABLE 2

Complete list of WorkPackages

All (potential) suppliers that have agreed to providea tender or already have

Self-Perform / singlesupplier negotiation /closed tender / open

tender

Estimated Total $cost of work

package

at start of projectincluding GST

Estimated $ spend on SAresidents, SA capital

equipment and wholly SAproducts or services

at start of project

including GST

5

Table 3 – Capital Equipment

Capital Equipment purchased, hired or leased(e.g. cranes, excavators, trucks etc)

Where will the item come/came from? (which AustralianState or overseas country / which supplier)

6

Appendix 1 – Reporting TemplateTable 1: Labour

Performed by SA residents Total Total

Performanceso far

Estimated atstart of project

Performanceso far

Estimated atstart of project

Up until report date hours (actual) hours hours (actual) hours

Up until report date $ (actual) $ $ (actual) $

For the rest of the project hours (est) hours hours (est) hours

For the rest of the project $ (est) $ $ (est) $

Total hours hours hours hours

Total $ $ $ $

Table 2: Work Package details

All WorkPackages

Self-Perform/ singlesupplier

negotiation/ closedtender /

open tender

(potential)suppliersthat haveagreed toprovide atender oralready

have

Total $ costof workpackageincluding

GST

Estimatedreplaced byactual when

known

$ spend on SAresidents, SA capital

equipment andwholly SA products

or services includingGST

Estimated replacedby actual when

known

EstimatedTotal $cost ofwork

package

at start ofproject

includingGST

Estimated $ spendon SA residents, SAcapital equipment

and wholly SAproducts or

servicesat start of project

including GST

Table 3: Capital Equipment

Capital Equipment purchased, hired or leased(e.g. cranes, excavators, trucks etc)

Where will the item come/came from? (which AustralianState or overseas country / which supplier)

Documents

FUNDING DEED - Kangaroo Island Council - Welcome · FUNDING DEED in relation to the ... partnership, body corporate, association, local authority, ... 1.2.11 any body which no longer