3.6 Equity is the primary bearer of risk. It is the first form of finance to be affected by the under-performance of a company, whether a general corporate entity or an SPV. The returns to equity investors vary with the fortunes of the entity in which they have invested. If a corporate entity performs poorly in the market, by failing to sell its output at an acceptable price or by having a higher cost structure than its competitors, the value of equity can be reduced or eliminated. In a PPP, where project risks are contracted to the private sector SPV, the same can happen; for example when costs are higher than those allowed for in the unitary charge paid by the procuring authority or when service provision does not meet contracted standards and the authority applies deductions in accordance with the terms of the payment mechanism. The transfer of risk is real: there has been a number of PFI projects where the private sector has absorbed cost overruns and so suffered reduced returns on their investments at the SPV level or, more particularly, at the subcontractor level. Conversely, where equity manages delivery standards and controls costs in an efficient manner, it can expect increased returns.