As discussed earlier, the ability to share and allocate risk between the public and private sectors in service delivery is a key characteristic of P3s. Because of the importance of appropriate risk identification and transfer to the success of any P3, a brief discussion of the risk assessment process contained within the strategic and value for money assessments is warranted.
The initial identification and assessment of project specific risks under both a traditional and P3 delivery model (undertaken in the strategic assessment phase), followed by a quantification of all measurable and material risks to the project under both delivery models will facilitate the value for money analysis.
Developing the list of risks specific to the project (referred to as the "Risk Register"), as well as determining the appropriate risk transfer and estimating the risk valuation parameters (likelihood of risk occurrence and potential effect) is typically conducted during a risk workshop. A list of risk register categories can be found in Schedule 4.
While many of the project specific risks will be known to the project sponsors (as managers of The City's assets), detailed knowledge of P3 agreements and of similar projects is useful to ensure the Risk Register is comprehensive and that the likely risk allocation for the P3 model is well understood. For this reason, risk workshop participants may include the following:
• Sponsoring business unit representatives; and
• Internal and/or external advisors including finance, procurement, legal, technical and cost consultants.