To the extent the Contractor retains Assets on a termination, then their value should be deducted from any compensation payments made. The value of the Assets will be close to zero in the case of Assets with no alternative use and so there may be no need to deal with this issue in the Contract. Where residual value exists the Authority should, however, carefully consider likely residual value out-turns, as the commercial incentives can be different if the residual value were to be significant. In certain scenarios (e.g. if residual value could exceed the original return) residual value could distort the effect of any compensation payment (e.g. for Contractor Default) and reduce the incentives to perform that would otherwise exist.398
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398 See generally Section 20.5.