Detailed risk factors: into the schedules
The precise process and formula by which the split will happen should be covered in the contract, together with other issues such as how the associated costs will change as the service grows or shrinks. These factors can be handled as part of managing the contract schedules, which should be renewed on an annual basis. Typically the schedules will define the service and how it will be paid for, and commit the customer to repay unrecovered capital costs in the event of termination – essentially an agreement along the lines of: ‘We will pay back the $25 million you have just spent on our network, minus appropriate depreciation.’
A further factor commonly covered in the contract schedules is the issue of ...
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