In early roads projects, contracts provided for no compensation, and in prisons projects, contracts offered no compensation if termination occurred in the construction phase. The rationale for the 'no compensation' approach is that it provides incentives for the private-sector party to perform and for the major lenders to step-in to sort the project out in the event of private partner default. But this policy may expose the public-sector party to the charge that it makes an unfairly large windfall gain in that event (e.g. if it takes over a valuable asset and makes no payment to the private-sector party). In addition, the public-sector party may suffer from an excessive risk pricing attempted by the private-sector party to protect itself against the large losses caused by the no compensation policy in the event of default.