With availability payment DBFOM concessions, the project sponsor retains all toll revenue risk if the facility is tolled. The sponsor pledges availability payments to compensate the concessionaire for its role in designing, constructing, operating, and maintaining the facility for a set time period during which it receives fixed annual payments. Availability payments are often used for projects that are not tolled. Owners make the availability payments to their private partners from public funds and they must be prioritized ahead of other needs throughout the concession period. The availability payments may be secured from a revenue pledge or subject to appropriations. When they involve the construction of toll facilities, the public sponsor may apply the toll proceeds to the cost of the annual availability payments.
The ongoing annual availability payments are dependent on the private partner's meeting operational performance standards, including lane closures, incident management, or snow removal. If the private partner does not meet the required standards, the amount of the availability payment is reduced. Availability payments transactions may also include milestone payments during construction or a one-time completion payment when construction is finished.