Edwards et al (2004: p.123) assert that the usability (condition) of PPP assets over their entire lifecycles can become a serious issue. If assets are not properly maintained, they can deteriorate prematurely and be rendered 'unfit for purpose'. This can reduce VfM outcomes particularly if the public partner has to absorb the cost of major repairs or replacements soon after concession hand-over is complete. The public partner traditionally mitigates this type of risk by writing stipulations into concession agreements stating that assets must be appropriately maintained over the full life of the contract term. Often, these clauses restrict / regulate the distribution of profits to consortia if assets are not appropriately maintained.
The commencement of asset monitoring by the public partner before concession hand-over will depend on specifics but this can occur as much as five years before the contract end-date (Edwards et al 2004: p.123). If irregularities are uncovered during hand-over, the public partner can penalise and / or abate the operator to cover its costs and the acceptance of asset transfer will then be subject to the approval of a final inspection undertaken by the public partner. An associated issue here is the practicability of determining in advance what the hand-back condition of an asset should be, and what penalties for non-compliance would be appropriate, for an event that might lie decades into the future.
Although this approach to managing the concession hand-over risk can be effective, it may not neutralise it. There remains a possibility of cost being passed to public partner after transfer takes place due to, for instance, the acquisition of technical expertise that may be required to monitor or solve highly complex technological matters e.g. the management of legacy systems. If competing views from experts arise, for example, inexperienced public officials could be forced to take strategic decisions that have far reaching consequences affecting the future viability of assets. Moreover, hiring / commissioning external expertise can be costly and cumulatively, can impact on the achievement of VfM propositions (see 'Skills transfer' below).