3.22 In PFI, the public and private sectors enter a contract which shares between them the risk of undertaking an investment project, typically to provide a major capital asset for the public services such as a school or a hospital and related support services like repairs and maintenance. The public sector retains some of the risks it would bear in a conventionally procured project, like demand risk or the risk that it has not adequately assessed its requirements, but transfers the remainder to the private sector. Furthermore, the public sector underwrites the public service, but not the private sector service provider, ensuring that safeguards are in place in event of failures in the private sector. The private sector takes on those risks it is best able to manage, like design, construction and maintenance risks, so that it is better incentivised to perform. The financial cap to the risk assumed by the private sector is the full value of the debt and equity it provides to a project.