Lease operator will require assurances as to tariff levels and increases over term of lease, and compensation/ review mechanism if tariff levels do not meet projections;
Cost of maintenance and some replacement passed to operator (operator takes some degree of asset risk in terms of the performance of the assets);
Operator may be put in charge of overseeing capital investment program/ specific capital works;
Employer is paid a fixed lease fee (lease)/ receives net receipts from customers (less affermage fee) (affermage);
Review process every 4 or 5 years to review performance, costs, tariff levels, etc.;
Employees seconded or transferred to the operator;
Operator to maintain asset register and operation and maintenance manuals/ records, etc.;
Typical to include minimum maintenance or replacement provisions towards the end of the contract, so that facilities are handed back in an operational state.
