5 Departments should negotiate commercial terms that are broadly neutral in respect of unforeseen and unforeseeable asset condition because seeking to transfer too much risk is likely to over-compensate the private sector on grounds of uncertainty. Steps were taken to think through and reduce such risks in this case. Specifically, the provisions for decision by an independent Arbiter mitigate the risk that thresholds for price review are too easily reached. In larger deals, Departments should consider similar arrangements after weighing up the benefits and costs involved.
6 Departments should avoid asymmetry in the right to terminate, and should not permit the private sector an easier exit from a long term partnership that encounters difficulties. Although, for what the Department considers understandable reasons, this was not achieved here, the voluntary right to terminate becomes more important with arrangements that face a higher degree of uncertainty.