The Partnerships Victoria documentation provides guidance on ten types of risk and outlines the government's preferred position on each risk category (exhibit 8.1).
Exhibit 8.1:
Risks identified in Partnerships Victoria policy
Risk | Explanation |
Site risks | Existing structure (inadequacy), site conditions, approvals, environmental clean-up and rehabilitation (contamination, pollution), native title, cultural heritage and availability of site |
Design, construction and commissioning risk | Design, construction, commissioning |
Sponsor and financial risk | Interest rates pre-completion, sponsor risk, financing unavailable, further finance, change in ownership, refinancing benefit, tax changes |
Operating risk | Inputs, maintenance and refurbishment, changes in output specification outside agreed specification range, operator failure, technical obsolescence or innovation, general market downturn, competition, demographic change, inflation |
Market risk | General economic downturn, competition, demographic change, inflation |
Network and interface risk | Withdrawal of support network, changes in competitive network, interface |
Industrial relations risk | Industrial relations and civil commotion |
Legislative and government policy risk | Approvals, changes in law/policy, regulation |
Force majeure risk | Force majeure |
Asset ownership risk | Technical obsolescence, default and termination, residual value on transfer to government |
Source: Department of Treasury and Finance (2001) Risk Allocation and Contractual Issues, Appendix A, pp.178-191