PPP Contracts

SCHEDULE 5.3 - Risk Management

Part 1 - Purpose

1.1 This Schedule sets out the requirements for Infraco to prepare a plan ( the Risk Management Plan ) setting out the arrangements for identifying, recording, monitoring, mitigating, controlling, assessing risks throughout the Contract Period and for LUL to notify Infraco of any similar risks managed by it.

1.2 The purpose of the Risk Register and the risk status reports referred to in Part 5 below is to provide assurance to LUL that Infraco will manage all risks that have an impact on LUL and give sufficient attention to the identification recording, maintaining, mitigation, control and assessment of any such risks that subsequently arise throughout the Contract Period and provide Infraco with the information necessary for it to understand the risks managed by LUL.

Part 2 - Documents to be issued

2.1 Infraco shall prepare, issue and maintain the following documents in accordance with the requirements of this Schedule: (a) the Risk Management Plan; and

(b) the Risk Register.

Part 3 - Detailed provisions

Risk Management Plan

3.1 The Risk Management Plan shall include the following information: (a) details of Infraco's approach to identifying, recording, monitoring, mitigating, controlling and assessing risks;

(b) details of Infraco's proposals for implementing the risk management strategy notified pursuant to paragraph (a) above;

(c) details of the risk analysis undertaken in preparation of the Risk Register; and

(d) appropriate cross-references to those parts of the safety arrangements addressing risk management and the activities of the Risk Management Committee undertaken pursuant to the Risk Management and Insurance Code.

Risk Register

3.2 Infraco shall prepare a schedule of risks ( the Risk Register ) which shall record the status and current impact of all risks of Infraco which, after due and careful enquiry have been identified where: (a) the occurrence of the event which has been identified as a risk would impact upon LUL directly; or

(b) the proposed control or mitigation by Infraco of the risk would impact upon LUL, to the extent that they are within Infraco's reasonable knowledge only.

3.3 Risks shall be added to the Risk Register as they are identified as falling within one of the categories set out in paragraph 3.2 above.

3.4 For all risks identified in the Risk Register, Infraco shall include within the Risk Register details of the arrangements put in place for monitoring, mitigating and controlling those risks.

3.5 Following a request from LUL, acting reasonably, to justify any entry in the Risk Register or the absence of any risk which LUL reasonably believes should be entered on the Risk Register, Infraco shall, as soon as reasonably practicable, explain the reasons for that entry, or its absence, as the case may be.

3.6 LUL shall promptly notify Infraco of any risks of LUL which have been identified by LUL where: (a) the occurrence of the event which has been identified as a risk would impact on Infraco directly; or

(b) the proposed control or mitigation by LUL of the risk would impact on Infraco.

3.7 Infraco shall record in a separate section of the Risk Register any details surrounding each risk notified to it by LUL pursuant to paragraph 3.6.

3.8 LUL shall, as soon as reasonably practicable, provide Infraco with details of the arrangement put in place for, and the manner in which LUL is proposing to monitor, control or mitigate each risk it notifies to Infraco pursuant to paragraph 3.6 and LUL shall, as soon as reasonably practicable, justify any such details where Infraco, acting reasonably, requests LUL to so justify.

Part 4 - Review and updating

4.1 The Risk Management Plan shall be reviewed, updated and reissued to LUL at least every twelve (12) months from the issue of the Risk Management Plan and as soon as reasonably practicable following the identification by either party of any significant change to the Risk Management Plan being necessary.

4.2 Infraco shall review and update the Risk Register at least every three (3) months.

4.3 Infraco shall give LUL reasonable access to the Risk Register and allow copies to be made all in accordance with the provisions of clause 15 ( Audit ) of the Contract.

Part 5 - Reports

Meetings

5.1 Prior to any meetings identified pursuant to Schedule 5.1 ( Contract Management ) of the Contract as being required for discussion of risks, Infraco shall provide a risk status report to LUL which will include a copy of the major risks in the Risk Register and the actions being taken to mitigate or obviate the impact of those risks.

5.2 LUL and Infraco shall discuss the risks in detail and discuss the means of monitoring, mitigating and controlling the risks. Infraco shall then adjust the Risk Register as a result of these meetings.

5.3 Each party shall be entitled to call, on reasonable notice, separate meetings to review the Risk Register in detail or to focus on principal or otherwise significant risk items.

5.4 In circumstances where either party has concerns about the approach of the other to management or mitigation of any particular risk, the parties shall endeavour to agree an appropriate course of action in relation to that risk.

Part 6 - Key submission dates

6.1 Infraco shall use its reasonable endeavours to prepare and submit to LUL the Risk Management Plan and Risk Register within one hundred and twenty ( 120 ) Business Days of the Start Date.

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