• implement plan, action schedules and management measures
• monitor the implementation
• periodically review risks and evaluate need for additional risk management28
Optimal risk allocation is the principal driver of value for money in PFPs. This includes retaining only those risks that Government can manage more effectively than the private sector.
Risks that are outside the control of either party may be shared.
When Government focuses on contracting for service outcomes rather than building and maintaining infrastructure, the risks associated with the construction and ownership of the asset can be transferred to the private party. The latter can design, build, operate and maintain the asset at minimum whole-of-life cost.
Risk analysis will need to be reviewed at the key stages of a project as outlined in Table 3.1.
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28 For further details on risk management, refer to the Total Asset Management Planning Assessment and Decision Tools at http:// www.treasury.nsw.gov.au/tam/pdf/risk_management.pdf.