Private operators are bound by contractual requirements and market incentives to be good stewards of transportation facilities for which they have assumed a long-term financial risk. In a PPP, a private entity is authorized to operate facilities through carefully negotiated concession agreements with the public authority. These agreements specify performance standards with which the operator must comply relating to facility conditions, safety measures, levels of service and maintenance obligations, among other things (these standards can exceed the standards to which other publicly maintained facilities are subject). Failure by the private operator to meet these performance standards can lead to operating control of the facility and the right to collect further revenues reverting from the operator to the public authority. In addition, where the operator's revenues are made up of tolls or other direct user fees, if the operator is not responding to the concerns of users or otherwise adequately maintaining the facility, the public may choose not to use the facility, thereby reducing revenue and forcing the operator to make changes.
A private operator has incentives to capitalize, operate and maintain a facility as efficiently as possible because many of the costs of poorly maintaining or capitalizing the asset are borne by the operator. A primary purpose of the concession agreement is to make sure to align these incentives with the interests or concerns of the public sector.133
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133 Global Toll Road Rating Guidelines, Fitch Ratings, Global Infrastructure and Project Finance, Criteria Report, March 6, 2007 ("Fitch Report"), pg. 9, which asserts that "[w]hile Fitch believes the profit motive provides private [operators] an incentive to keep the road in good operating condition, it is important that legal documents adequately align those incentives."