Together with the maintenance requirements of the contract, the risk of abated payments for under-performance obliges the private party to bear the costs of any technical upgrading necessary to allow it to continue performing its contractual obligations.
However, during the term of the contract (which may be up to 30 years or more) technology, in most sectors, can be expected to change substantially and a more cost-efficient solution for the provision of the contracted services may well become available. There is, therefore, a need for the contract to allow some flexibility in upgrading the infrastructure and to provide incentives for such an upgrade.
There may also be extreme circumstances where the asset is still capable of delivering to specifications, but technological change has so transformed the market in particular services that terminating the contract is better value for money for government than persisting with it. The termination provisions of the contract should contemplate this eventuality and the nature of any compensation and/or cancellation payments to the private party.