When considering risks and negotiating a risk allocation position, it is imperative for government to understand the drivers behind the private party's risk preferences. This section attempts to identify such drivers by describing the private party's general approach to risk. The section will highlight the effect of financing on the private party's risk position, and issues of concern to the private party when contracting with government. Chapter 3 deals with risk identification, allocation and mitigation, and should be considered in light of this discussion.