In many contracts the parties swill be granted relief from their obligations if circumstances outside their control prevent or restrict performance. It is common for these circumstances to be grouped together under a wide definition of force majeure.

Although the Private Party takes the service delivery risk in a PPP project, there will still be circumstances in which it is appropriate to grant some relief from its obligations. However, the category of force majeure, which offers comprehensive relief from obligations, is generally defined very narrowly in PPP contracts. As a result, there have developed a number of categories of extenuating events, offering varying degrees of relief. These can be grouped under the general heading of Intervening Events, and are as follows:

•  Relief Events

Events that are outside the control of either party to the Project Agreements, and which the Private Party will have to manage as best as it can. The Private Party will bear the financial risk of lost revenue or increased costs to workaround the event, but it will be granted relief from termination for failure to perform. Examples of relief events are fire, explosion, lightning, earthquakes and riots.

•  Compensation Events

Events that interfere with the Private party's performance of its services that are either within Government's control, (such as Government actions that occur during its provision of core services), or particular categories of change in law which have the effect of discriminating against the project or the Private Party, and which, whilst not necessarily within Government's control, are generally perceived to be a Government risk. The Private Party may be entitled to compensation for losses incurred, whether through payment of increased costs or through continued service payments even where the Private Party is unable to perform The services as a result of the event. The Private Party will also be granted relief from those obligations, such as meeting milestone dates, which it cannot perform as a result of the event.

•  Force Majeure

Events that are unarguably beyond the control of either party to the Project Agreements. Force majeure should generally be narrowly defined to include those events that are highly unlikely to eventuate but which will have a catastrophic effect on a party's ability to perform its obligations if they do. The affected party will be given relief from liability, but not compensation. A continuing force majeure event may lead to termination of the Project Agreements.