It is not Government’s aim to maximise risk transfer from Government to the private sector, but rather to optimise risk allocation so that value for money is maximised in each project on a whole-of-life basis.
A full risk analysis must be undertaken for each PFP. To minimise transaction cost, for social infrastructure projects Government will adopt a standardised risk management approach in accordance with the Working With Government Risk Allocation and Commercial Principles for Privately Financed Projects (Risk Allocation and Commercial Principles for PFPs), where this results in value for money.
However, given the length of contractual arrangements, the likely complexity of issues involved and the unique characteristics of each project, risks must be considered on a case-by-case basis.