Service availability

For many PPP projects, the provision of available services is very important. That is, government needs the facility to be available and ready to use, regardless of the extent to which it is actually used. Available services may comprise accommodation places or units (such as courtrooms, prison cells or hospital beds) or peak capability levels (such as for a water treatment facility). Where the government requires available services, it is appropriate for a payment element to directly relate to this service.

Availability is measured not simply by the accommodation or capacity being available but also by its being available at the specified performance standards - such as a courtroom being clean, with available air-conditioning and all audiovisual systems ready and in working order. In accommodation service projects, debt financiers will typically seek to align the accommodation service element with the private party's debt repayments.

In such cases, it is important that a suitable payment abatement arrangement be in place so that if the accommodation services are not provided at the required time, to the required level or at the required standard, and the failure in service amenity is material, the debt repayments are not quarantined.