If the private-sector party is thinking about risk, uncertainties, and their associated costs, then so must the public-sector party. This is because the "price" that the private sector attaches to taking on a particular risk or uncertainty will feed into any value-for-money analysis or comparison of public or private finance. No party can totally eliminate all of the risks and uncertainties. The question is how best to reduce the likelihood of the risk of a particular adverse event occurring and how best to reduce the financial impact if it does occur by addressing the following questions:
• Who is best placed to reduce or mitigate the probability of the event occurring?
• Who is best placed to manage the costs of the event if it does occur?
As many of the uncertain events concern the macro socioeconomic environment, they will most likely sit with the public sector. Key issues go beyond their cost to more fundamental questions about whether the private sector wishes to invest in that environment. For example, if potential investors think that political interference is likely, then they may look to invest elsewhere.