2.4.9 Depending on the nature of the project, the payment may vary with:
a) Availability of the service. Availability payments will be made when the facility (e.g. school building) or required capacity levels (e.g. required volume of treated water) are made available at a minimum specified standard and ready to use, regardless of the extent to which it is actually used.
b) Performance quality of the service. Performance payments are typically used for ancillary services, such as cleaning and security, where there will be penalties if the performance level is less than specified.
c) Usage of the service. The service provider will be paid based on the extent that the service is actually used, e.g. number of transactions or number of accommodation units occupied.
2.4.10 Many PPP projects use a combination of two or more of the above elements. For example, a student accommodation PPP project may use an availability component associated with the availability of hostel rooms and a performance-based component for operational services, such as laundry services. It is important that these elements do not have their own independent payment regimes. The payment for these components should be integrated to reflect overall service performance and availability. For example, payment for usage should only be made when availability or performance standards were met for the essential elements of the service.
2.4.11 Whether to use availability, performance or usage as the basis for the payment depends on the nature of the function and the allocation of responsibilities between the public and private sector. The following sections summarise the key features and considerations under each payment basis.