Title: Australia Funding Agreement (mobile coverage extension)

Contributor: King & Wood Mallesons

Language: English

Type: Document

Nature: Agreement

Published: August 17, 2021

Region: East Asia and Pacific

Country: Australia

Keywords: ICT Core, Funding and Financing, Model agreement


Document Summary:

This outline funding agreement sets out the draft terms on which the Australian Government granted funding under Round 1 of the Program.  Under the funding agreement, the Government made contribution payments to the funding recipient on the achievement of certain milestones for each mobile base station, which were to be negotiated between the Government and the funding recipient during the application process.  The funding only contributed to the capital costs of building the base station.  All operating costs were borne by the funding recipient.  If the actual capital cost was less than the estimated capital cost used to determine the amount of funding, the Government could, at its discretion, reduce its funding by an amount directly proportionate to the amount of the shortfall.  Consistent with the intention of the Government to act only as a financial contributor, the funding agreement allocated all risk to the funding recipient.  This included sole responsibility for procuring and obtaining access to each base station site and designing and constructing the base station.

Each funding recipient was also required to negotiate operational agreements with the Government, which were included as schedules to the funding agreement.  These operational agreements set out the network operator’s obligations in relation to the roll out, co-location and open access terms and service terms for each mobile base station.

Document Details:

Key features of the draft funding agreement include:

  • Site approval – if the funding recipient is unable to obtain the necessary approvals to construct a mobile base station at the designated site, the funding recipient will have 15 business days to propose a replacement site that will provide an equivalent or similar level of coverage to the equivalent or similar area as the original site.  If the funding recipient does not propose an alternative site or the Government is not satisfied that the proposed site will provide an equivalent or similar level of coverage as the original site, the Government may withdraw funding for that particular mobile base station.
  • Site risks – the funding recipient accepts sole responsibility for, and assumes the risk of, all loss arising from the nature, characteristics or physical conditions of a site.  This may include contamination around the site, any non-standard soil or subsurface conditions as well as environmental, heritage, native title and geotechnical risks associated with the site.
  • Variations – if the funding recipient wishes to undertake any variation during the construction or operation of any mobile base station, it must obtain the Government’s prior written consent, which must not be unreasonably withheld if the requested variation is consistent with the achievement of the key objectives.
  • Right of entry – the Government may at any time enter a mobile base station site or other premises for the purpose of observing or inspecting the funding recipient’s activities, monitoring compliance with the funding agreement or exercising any right or obligation which the Government has under the funding agreement.
  • Force majeure – if the funding recipient alleges that a force majeure event has occurred, it must give the Government prompt notice of the force majeure, including the details of the force majeure and the obligations which have been affected.  The parties must meet within 3 business days of the notice of force majeure to determine the estimated length of time for which the force majeure will continue.  The funding recipient’s obligations will be suspended to the extent and for so long as such obligations are affected by the force majeure; however, the Government may make alternative arrangements for the performance of any suspended obligations at its own cost.
  • Termination or reduction of scope for convenience – the Government may, at any time by notice to the funding recipient, immediately terminate or reduce the scope of the funding agreement for convenience.  The Government will only be liable for the payment of funds that are due and owing to the funding recipient at the date of the notice of termination as well as reimbursing any expenses the funding recipient has unavoidably incurred.
  • Subcontractors – the funding recipient may engage subcontractors to undertake the construction and operation of the mobile base station.  However, the funding recipient will be liable to the Government for any acts, defaults or neglects of any subcontractor or employee or agent of the subcontractor as if they were the funding recipient’s own acts, defaults or neglects.
  • Publicity by funding recipient – in all publications, promotional and advertising materials and public announcements, the funding recipient must acknowledge the financial and other support it has received from the Australian Government.  The acknowledgement must be approved by the Government.
  • Publicity by the Government – the Government reserves the right to publicize and report on the awarding of funding to the funding recipient and the achievement of key objectives.
  • Right of the Government to publicize failure – the Government reserves the right to publicize and report on the funding recipient’s failure to achieve any milestone or completion by the relevant date on the Government’s website and in media releases and general announcements (unless the delay is caused by a force majeure event).
  • Dispute resolution – if a dispute arises, the parties must first attempt to settle the dispute by direct negotiation.  Failing negotiation, the parties must refer the dispute to an independent mediator, then an independent arbitrator, before being able to commence legal proceedings.

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Updated: October 25, 2021