Only a small percentage of PPP projects in the UK have been subject to penalties applied for under-performance (National Audit Office 2009, p.56). In practice, penalties may be deferred to improve working relationships between the partners (or to prevent them from deteriorating further) or to off-set under-performing services with other services rendered (National Audit Office 2009, p.56).The threat of applying abatement may spur the private partner to improve its performance (Ernst & Young 2008, p.13).
The relevant issues of partnership and performance management in the operational phase of PPP are now explored in greater depth, using interviews conducted with appropriate experts from the public and private sectors.