Every infrastructure initiative carries a certain level of risk that must be identified and managed effectively throughout the initiative's life. Life-cycle cost is just one of many factors that agencies should consider in assessing levels of initiative risk. Other factors include the initiative's complexity, the entity's experience with similar types of initiatives and the nature of any technology involved.
Before risk can be allocated to any party, it is critical to understand and assess the risk involved in each initiative. Risks should be identified at the earliest stage of planning as they may impact financing and procurement options.
Once risks have been identified, they must be analysed and evaluated to determine the likelihood, consequences and level of risk. Finally, a risk management and/or mitigation strategy must be put in place.
Risks should also be reviewed and updated as the initiative moves forward.