Depending on the nature of the particular service, government accountability means there are special issues concerning termination for default, step-in powers and reinstatement obligations. This may dictate the project structure by, for example, a requirement for the land on which the infrastructure is sited to remain in public ownership, and be leased to the private party on terms that allow government to resume both the lease and the asset on termination of the project contract.
Regardless of the project structure or the terms of the contract, government cannot transfer to the private party the ultimate responsibility and accountability to the public for the delivery of services that it is legally obliged to deliver or which it is has undertaken to provide to the public.
Government can manage this responsibility in a number of ways. It can provide services directly to the public, contracting only for the provision of intermediate services (e.g. the provision of water treatment services in order to provide clean water to the public). Alternatively, government can contract with a private party to provide services directly to the public on government's behalf and monitor the performance of service delivery (e.g. provision of a toll road).
The nature of the payment mechanism by which government or other parties pay for these services is critical in allocating the financial liability for service delivery to the private party. The payment mechanism should provide that if service delivery is sub-standard, government may seek to impose penalties and other remedies to maintain performance incentives for the private party.