Optimising risk transfer is fundamental to a successful PPP project. By issuing an SG, the Government is altering the PPP risk allocation and may therefore affect the value for money of the PPP solution. The business case for a PPP may no longer stand up against a more conventionally procured project where the public sector takes most of the project risks.
Guidance: SGs should preserve the private sector's incentives to manage the risks it can best manage. Prior to an SG being considered for a PPP project, the Government should verify the value for money model which justifies PPP as a procurement method for the specific project.