Not less than 90 months prior to the Expiry Date, the Parties shall agree upon and, in accordance with HMQ procurement policies, engage an independent and suitably qualified and experienced person (the “Independent Inspector”) to carry out inspections of the Parkway pursuant to this Schedule 24.

Project Co and HMQ shall share equally the responsibility for the payment of all fees and costs of the Independent Inspector.

In the event of the Independent Inspector’s engagement being terminated otherwise than for full performance, the Parties shall liaise and cooperate with each other in order to appoint a replacement as soon as reasonably practicable, and in any event within 10 Business Days of the termination of the last Independent Inspector’s engagement.

In the event the Parties fail to agree upon the identity of the Independent Inspector either pursuant to Section 1.1 or Section 1.3 of this Schedule 24 by the specified deadline, then the Independent Inspector shall be selected as follows:

Subject to the exceptions specified in Section 2.2 of this Schedule 24, on the Expiry Date:

For greater certainty, this Schedule 24 shall not apply to any Parkway Infrastructure to be maintained by HMQ in accordance with this Project Agreement.

The Parties shall cause the Independent Inspector to perform an inspection of the Parkway and to produce and deliver to each of the Parties a written report (a “Parkway Condition Report”) not less than 84 months prior to the Expiry Date that:

The Parties shall cause the Independent Inspector to perform another inspection of the Parkway and produce and deliver to each of the Parties an updated Parkway Condition Report (each a “Revised Parkway Condition Report”) on each anniversary of the date of the original Parkway Condition Report.

The Asset Management Plan shall be amended and updated, as applicable, to include all Expiry Transition Works identified in either the Parkway Condition Report or any Revised Parkway Condition Report not already included in the then current Asset Management Plan.

Project Co shall carry out the Expiry Transition Works at its own cost notwithstanding that the actual cost of the Expiry Transition Works may be higher than the Expiry Transition Works Costs.

Either Party may dispute the Parkway Condition Report or any Revised Parkway Condition Report, including the Expiry Transition Works and the Expiry Transition Works Costs, in accordance with Schedule 27 – Dispute Resolution Procedure. In the event that a final determination in accordance with Schedule 27 – Dispute Resolution Procedure specifies Expiry Transition Works or Expiry Transition Works Costs which are different than those set out in either the Parkway Condition Report or any Revised Parkway Condition Report, then either the Parkway Condition Report or any Revised Parkway Condition Report, as the case may be, shall be deemed to be amended accordingly, as amended pursuant to Section 3.3 of this Schedule 24, and all deductions and payments permitted or required by Section 4 of this Schedule 24, shall be adjusted accordingly.

Following the date for delivery of the Parkway Condition Report, for the purposes of Section 4.2 of this Schedule 24, the Parties shall review the amount of the Expiry Transition Works Costs and the level of capital expenditure Project Co has allocated to spend in the same period pursuant to the Financial Model (the “Expiry Rehabilitation Costs”). Where the Expiry Transition Works Costs are greater than the Expiry Rehabilitation Costs, the difference between the Expiry Transition Works Costs and the Expiry Rehabilitation Costs shall be apportioned equally over the Payment Periods from the date the Parkway Condition Report is to be delivered hereunder to the Expiry Date (each instalment being the “Expiry Transition Amount”). If the Parkway Condition Report is delivered after the date for delivery hereunder, then the first instalment to be paid shall also include the amounts to be paid under the instalments that would have been payable prior to the date the Parkway Condition Report is delivered. Where the Expiry Transition Works Costs are amended pursuant to Section 3.3 or 3.5 of this Schedule 24, the Parties agree that the Expiry Transition Amount shall be adjusted accordingly.

Subject to Sections 4.3 and 4.5 of this Schedule 24, HMQ may deduct the Expiry Transition Amount from each Monthly OM&R Payment, and pay into a separate interest bearing bank account, upon escrow terms acceptable to the Parties or in trust (the “Escrow Account”), the Expiry Transition Amount. If in any Payment Period, the Expiry Transition Amount is greater than the relevant Monthly OM&R Payment, HMQ may deduct the difference between the Expiry Transition Amount and the Monthly OM&R Payment from the next Monthly OM&R Payment or from such other Payment Period as otherwise agreed between the Parties.

HMQ shall not deduct any amount from a Monthly OM&R Payment as contemplated in Section 4.2 of this Schedule 24 if, at such time, the funds in the Escrow Account exceed the value (based on the Expiry Transition Works Costs) of all or any part of the Expiry Transition Works (as amended) yet to be performed.

Project Co may from time to time, but not more often than once in any month, make written request for release of funds from the Escrow Account. HMQ shall consider such request within 10 Business Days and if the funds in the Escrow Account exceed the value (based on the Expiry Transition Works Costs) of all or any part of the Expiry Transition Works (as amended) yet to be performed, then HMQ shall pay the excess to Project Co from the Escrow Account within 10 Business Days thereafter, together with any interest that has accrued on such amount. Project Co shall include with its request all information reasonably required by HMQ to evaluate such request.

Following the date of any Revised Parkway Condition Report, if the amount in the Escrow Account (being the deductions of the Expiry Transition Amount made since the Parkway Condition Report) together with the deductions to be made from the remaining Monthly OM&R Payments is less than the value (based on the Expiry Transition Works Costs) of the remaining Expiry Transition Works (as amended) yet to be performed, then HMQ may deduct such shortfall, in equal instalments, from each remaining Monthly OM&R Payment until the Expiry Date, and pay each instalment into the Escrow Account and Section 4.4 of this Schedule 24 shall continue to apply until the Expiry Date.

As an alternative to the deductions permitted by Sections 4.2 and 4.5 of this Schedule 24 or the retention of any amount in the Escrow Account pursuant to the foregoing provisions of this Section 4 of this Schedule 24, Project Co may (and if, at any time, the amounts which HMQ is permitted to deduct pursuant to Sections 4.2 and 4.5 of this Schedule 24 is greater than the remaining Monthly OM&R Payments, Project Co shall), within 5 Business Days of a written request from HMQ, provide a bond or letter of credit (the “Expiry Transition Security”) in favour of HMQ in an amount equal to the amounts which HMQ is permitted to deduct pursuant to Sections 4.2 and 4.5 of this Schedule 24, in a form and from a surety or bank, as applicable, acceptable to HMQ.

Notwithstanding:

The Parties shall cause the Independent Inspector to perform an inspection of the Parkway and to produce and deliver to each of the Parties a Parkway Condition Report within 30 Business Days after the Expiry Date (the “Final Parkway Condition Report”) that documents whether the Parkway met the Expiry Transition Requirements on the Expiry Date, as well as identifying any Expiry Transition Works and Expiry Transition Works Costs.

If the Final Parkway Condition Report identifies any Expiry Transition Works, HMQ may withdraw from the Escrow Account or call upon the Expiry Transition Security an amount equivalent to such Expiry Transition Works Costs, and HMQ shall pay any remaining funds in the Escrow Account (including any interest accrued) to Project Co and return any remaining Expiry Transition Security to Project Co.

Provided that the funds in the Escrow Account and/or the Expiry Transition Security is adequate to meet Project Co’s obligations in respect of the Expiry Transition Works identified in the Final Parkway Condition Report, following any withdrawal from the Escrow Account or call upon the Expiry Transition Security in accordance with Section 6.2, Project Co shall have no further liability with respect to such Expiry Transition Works.

If no Expiry Transition Works are identified in the Final Parkway Condition Report, HMQ shall, within 20 Business Days of receipt by HMQ of the Final Parkway Condition Report, pay the funds in the Escrow Account (including any interest accrued) to Project Co and return the Expiry Transition Security to Project Co, unless HMQ disputes the Final Parkway Condition Report, in which case the Escrow Account and Expiry Transition Security shall be dealt with as determined in accordance with Schedule 27 – Dispute Resolution Procedure.