Difference between revisions of "Eligible Cost Overruns"

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'''Ineligible Cost Overruns''' are those which are rejected by the GNWT (and the arbitration process).  The DCBC must pay for these out of their own resources, and they are not recoverable.  The DCBC is required to have a loan facility of $3,000,000 in place to cover Ineligible overruns.
 
'''Ineligible Cost Overruns''' are those which are rejected by the GNWT (and the arbitration process).  The DCBC must pay for these out of their own resources, and they are not recoverable.  The DCBC is required to have a loan facility of $3,000,000 in place to cover Ineligible overruns.
  
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Revision as of 03:18, 28 March 2010

Cost Overruns are any increase in the cost of development or construction of the Bridge. According to the Concession Agreement, the DCBC provides a Project Company Cost Overrun Notice, and then they and the GNWT go through a process to determine whether it is an Eligible Cost Overrun or an Ineligible Cost Overrun. (While the determination is being made, they are known as Unclassified Cost Overruns).

Eligible Cost Overruns are paid for with Bridge funding. There is a $10,000,000 contingency fund built into the original budget. Should the Eligible overruns exceed this amount, the GNWT can require the DCBC to arrange for Additional Debt financing. Additional Debt is factored into the yearly calculations, and so may eventually be recovered. The GNWT may also, if it so chooses, pay for any or all overruns itself (section 5.8 of the Concession Agreement).

Ineligible Cost Overruns are those which are rejected by the GNWT (and the arbitration process). The DCBC must pay for these out of their own resources, and they are not recoverable. The DCBC is required to have a loan facility of $3,000,000 in place to cover Ineligible overruns.