Risk Category

Description and Treatment

General Risks

Examples include high-level concerns related to the decision to undertake an initiative. Risk treatment may include documenting how an initiative fits with established strategic objectives; assessing the requirements for a new corporate structure; enhancing the initiative's profile with the public, media and governments; and working collaboratively to enhance labour and industrial relations.

Policy Risks

Examples include the likelihood that an initiative represents, or may be affected by, a major shift in government or agency policy, or change in legislation.

Public Interest Risks

Examples include the initiative's environmental impact and its relation to public health, safety and security issues. Risk treatment may include working with neighbours and the community to address public concerns in the initiative planning phase.

Management or Organizational Risks

Examples include the complexities associated with partnerships, investments and management. Risk treatment may include managing dependencies on linked funding and contingent investments; ensuring the availability of qualified initiative managers; and ensuring the initiative development team has access to appropriate expertise when undertaking a new type of initiative.

Design/ Construction, Commissioning, Partnership or Supplier Risks

Examples include sponsor risk (e.g., the likelihood that a private partner may be unable to deliver) and general supplier/market capacity. Risk treatment may include ensuring the availability of material and equipment supplies; ensuring that experienced designers, contractors and trades are available in the required time frame; anticipating the need for community permits and approvals; and designing construction windows to avoid delays due to adverse weather.

Site Risks

Examples include the risks associated with site selection and acquisition. Risk treatment may include ensuring that the site is available at an affordable price; evaluating site challenges such as soil contamination or potential flooding; and ensuring the desired site is free of potential land-claim issues.

Financing Risk

Examples include an entity's ability to draw the required financial resources and the overall financial viability of the initiative. Risk treatment may include ensuring that financing is available at the appropriate time; anticipating the impact of interest rate increases; and evaluating the creditworthiness of potential partners.

Cost, Economic or Market Risks

Examples include all possible events that could affect cash flow during initiative development. Risk treatment may include planning for contingencies in the market such as a drop in demand for services; anticipating the potential for labour or material cost escalations; ensuring funding is available to cover operations, maintenance and administration; and assessing the potential for competing facilities.

Ownership and Operations Risk

Examples include labour relations, maintenance, technical and asset obsolescence risks. Risk treatment may include taking steps to keep maintenance in line with forecast levels and taking appropriate measures to address the likelihood of abandonment.

Other Risks

Risks that could be substantive and require resolution and/or management prior to commitment to the expenditure, or during delivery, including uncontrollable "force majeure" risks such as weather and global uncertainty. Risk treatment may include developing contingency plans to avoid or reduce construction delays due to emergencies or disasters; and ensuring that business continuity plans address a wide range of potential events.