There is a need to balance these above objectives against one another. For example, the objective of incentives may conflict with the objective of simplicity at times because on cost grounds it may make sense to have a very complex tariff structure. A similar conflict could arise with the fairness objective. There is a further requirement that certain fundamentals be in place including a definition of a reasonable rate of return, an understanding of how assets will be valued, and whether any additional returns are to be allowed.
After evaluating these factors and determining the appropriate allocation of risks in PPP, the initial tariff rates and tariff structure are set in place until an adjustment is warranted.