2.4.24 The PPP contract will set out the unitary charge for the entire contract period. Due to uncertainties of inflation rates and certain operating costs over a long-term contract, it is usually in the interests of both the public agency and the private provider to set out provisions for varying the unitary charge in certain specified circumstances. The variation provisions help the provider address future unforeseeable changes in costs. The provider will thus not have to make such a significant provision for this risk in its bid price. The variation provisions also help the public agency ensure that the price that it agreed to pay in future years will not be in excess of future market prices for similar services.
2.4.25 There are several processes that can be introduced to vary the unitary charge: