Unitary charge and deductions
The availability payment, its indexation and the deductions.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: unitary charge and deductions.Updated 2 October 2026
Part of project finance and infrastructure models, with the models, labs and guides around it.
What it does
The revenue line of an availability PPP. The authority pays a unitary charge for the asset being available and performing; a share of it is indexed to inflation and the rest is fixed, which matters because the debt service against it is usually level. When areas are unavailable or service falls short the authority makes deductions, and the project company passes most of them to the facilities management contractor whose failure caused them, up to a cap. What the project company bears is the deductions above the pass-down, and that is the performance risk its equity is paid for.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, rows 22–29: Typed unitary charge, a year at financial close prices, Inflation (CPI) a year, Share of the unitary charge indexed to CPI, Performance case: 1 = base, 2 = poor performance…
- Revenue, rows 6–8: Inflation index from financial close, Charge factor: indexed share x index + fixed share, Unitary charge payable
- Revenue, rows 11–15: Deductions, % of the charge (performance case), Deductions made by the authority, Passed down to the FM contractor, up to the cap, Deductions borne by the project company…
What a reviewer looks for
- Indexing the whole charge.
- Deductions with no pass-down, or a pass-down with no cap.
- A charge paid from financial close rather than from service commencement.
Learn it, then build it
Vocabulary: Unitary Charge, Availability Payment, Performance Deductions, Public-Private Partnership (PPP).