The Provider can be remunerated in three different ways, each of which carries different risks.
• Direct payments, e.g. tolls on roads/bridges, treatment fees for waste management, etc.
o Risk The level of the tolls or fees can be negotiated but the level of available traffic, and hence revenues, is usually beyond the control of the Provider.
• Indirect payments, e.g. shadow tolls on roads.
o Risk Payments to the Provider may depend on volume but shadow toll and fee structures can be designed to minimise the risk to the Provider, while limiting windfall profits from large increases in utilisation or demand.
• Availability payments, e.g. for schools, hospitals, or physical transport
infrastructure.
o Risk Availability payments are based on the asset being available for use, with penalties for failure to perform. This is under the Provider's control, so the risk should be carried by the Provider rather than the Promoter.
A fourth possibility is a mixed-payment regime, involving a combination of availability-and traffic-based payments.