Risk management

The risks that the contract management team will need to manage can be classified as follows:  Guidance 93

•  project risks contractually allocated between the parties;

•  intrinsic risks borne by the Authority;

•  project risks not contractually allocated; and

•  risks associated with changes to the PPP contract.

It is essential for the contract management team to have a clear understanding of the requirements of the PPP contract and the rationale for those requirements. The role of the team will vary according to whether or not these risks have been identified in the contract and contingency plans have been established.

Potential problems should be identified early and acted upon. If the problem appears to be persistent and the PPP Company's first point of contact cannot deal with it, the issue should be dealt with at a more senior level. Such escalation procedures will typically be specified in the contract administration manual.