Essentially, the risk allocation position between government and the private party in a public private partnership project is governed by:
• service delivery specifications
• payment/pricing structure
• express contractual provisions adjusting risk allocation.
These elements, documented in the project agreements, allocate risk between the parties. This allocation includes detail of how risk mitigation strategies may be applied in some circumstances to share or reallocate a materialised risk. (For further detail refer to the contract development and management support document.)