Unitary charge approach

Combining different charge elements into a single consolidated payment by government to the private party is an important feature of PPP projects. Government is procuring an integrated range of services from the private party. The unitary charge approach lessens the potential, and incentive, for the private party to cut back on the less profitable services. The unitary charge approach should also be maintained in bundled or aggregated service contracts, for instance, where the private party has responsibility to provide infrastructure and ancillary services for a number of educational facilities. This unitary charge approach should be mirrored in the default provisions where default on a particular service constitutes a default on the project as a whole.

The most appropriate combination of payment elements differs from project to project and is influenced by factors such as whether the government is the customer, the extent to which demand risk can be efficiently allocated to the private party, the nature of the services provided and government's objectives for the project.