kustannussidoks

Kustannussidoks is a Finnish term that translates to "cost tie" or "cost linkage" in English. It refers to a system or agreement where the cost of one item or service is directly dependent on or linked to the cost of another. This linkage can be established through various mechanisms, such as a contractual clause, a regulatory framework, or a market-driven relationship. The primary purpose of a kustannussidoks is to ensure a predictable and stable cost structure for one party by mirroring the cost fluctuations of another.

These arrangements are often employed in long-term contracts, particularly in industries where raw material prices, energy costs, or other input factors are volatile. For example, a supplier might agree to provide a product at a price that is adjusted based on the prevailing market price of a key component. Similarly, in public procurement, the cost of a service might be indexed to a specific inflation rate or a basket of related costs. The specific formula or index used to establish the kustannussidoks is crucial and is typically detailed in the governing agreement. While it can provide cost certainty, it also transfers the risk of cost increases (or decreases) to the party whose costs are being adjusted.