The project agreements should be structured and managed so as to lessen the potential for a government agency to unintentionally assume risks for which it has paid a risk premium to allocate to the private party. This may be achieved by, for example, preventing unnecessary involvement by government in the design and construction or in the ancillary service delivery processes. Under a public private partnership structure, the incentive for the private party to get the construction right is that it receives payment only when the infrastructure and related services are provided to the predetermined quality and level.
During the Contract Management phase of the project, government needs to ensure that its monitoring of service provision does not itself involve any assumption of operating risk.