Section 9Sec./Art. 9

Section 7 of the same Act is hereby amended to read as follows:

"Section 7.Contract Termination. In the event that a project is revoked, cancelled or terminated by the government through no fault of the project proponent or by mutual agreement, the government shall compensate the said project proponent for its actual expenses incurred in the project plus a reasonable rate of return thereon not exceeding that stated in the contract as of the date of such revocation, cancellation or termination:Provided,That the interest of the government in these instances shall be duly insured with the Government Service Insurance System or any other insurance entity duly accredited by the Office of the Insurance Commissioner:Provided, finally, That the cost of the insurance coverage shall be included in the terms and conditions of the bidding referred to above.

"In the event that the government defaults on certain major obligations in the contract and such failure is not remediable or if remediable shall remain unremedied for an unreasonable length of time, the project proponent/contractor may, by prior notice to the concerned national government agency or local government unit specifying the turn-over date, terminate the contract. The project proponent/contractor shall be reasonably compensated by the Government for equivalent or proportionate contract cost as defined in the contract."