In answer to the first part of your question, the higher water table is clearly a physical condition. Given that it is considerably higher than that shown on the site information, this appears to be a compensation event under clause 60.1(12), given the contents of clauses 60.2 and 60.3.
However, you are in any event required to provide the works, see clauses 20.1 and 11.2(13), and deal with the high water table in doing so, whether it is a compensation event or not. And even if it is a compensation event, it will be valued assuming you acted promptly and competently to the event – see clause 63.7. You cannot therefore just wait about until the project manager decides if it is a compensation event or not, you must get on with sorting it out promptly and competently.
Of course as this is option C, all of this relates only to the total of the prices, that is the ‘target’. In the meantime you will be paid the defined cost for actually dealing with the high water table as part of the price for work done to date (see clauses 50.2, 11.2(29) and 11.2(23)) in any event, and whether or not it is a compensation event.