Public-Private Partnership (ppp) Handbook

6.4.3 
Tariff Adjustments
To expect one set of tariffs, or even a tariff structure or regime, to remain viable and ap-
propriate over the typical life of a PPP project is unrealistic. It is therefore essential to define 
practical rules for adjustments. This requires defining:
•
 
The triggers or drivers for a price adjustment, such as changes in raw material prices 
(such as oil prices for power), inflation, and exchange rate fluctuations (where the 
operator had to assume unhedged foreign currency exposure); 
• 
The mechanisms by which the adjustment will be made, including cost plus and price-
cap regulation; and
• 
The  frequency  of  adjustments  including  cost  pass-throughs,  tariff  indexation,  tariff 
resets, and extraordinary tariff adjustments.