During transition into the operational phase, the Southern Cross Station Authority held the view that it was preferable that Civic Nexus Pty Ltd was given an opportunity to resolve operational lapses rather than applying abatement for all instances of under-performance - it was expected that such decision-making would help to build a "positive ongoing working relationship" (Victorian Auditor-General 2007a: p.59, p.60) between the partners. Thus, the Southern Cross Station Authority enforced only one abatement during the first year of operations even though the concessionaire failed to meet its performance targets in three out of four financial quarters (Victorian Auditor-General 2007a: p.59). These decisions were taken on the basis of a commitment made by Civic Nexus Pty Ltd to improve its performance monitoring system capabilities (Victorian Auditor-General 2007a: p.60). However, failure to follow through on the assurance would mean that abatement could be applied retrospectively (Victorian Auditor-General 2007a: p.60).
As stated in Chapter 4, the UK's National Audit Office (2009b: p.56) asserts that such penalties are rarely applied in practice (it may also be that decisions are taken by public partners not to enforce abatement in full) for service provider under-performance. It may be that, in some circumstances, public sector decision-makers view these situations as an opportunity to improve working relationships with its private partner or to off-set under-performing services with better performing services (National Audit Office 2009b: p.56).