Operating risks typically relate to production and operation, availability and quality of inputs, quality and efficiency of management (including contract management) and operation, maintenance and upgrade requirements.
The consequences of operating risk are that the costs of operating the facility will exceed projections and therefore diminish projected returns, and/or that the facility will not perform to the required standards.
Possible sources of operating risk are:
• operating costs may vary from original budgeted projections due to:
- higher production costs
- higher input costs
- reduced input quality
- unsuitable design
- reduced equipment reliability
- higher maintenance costs
- occupational health and safety issues
- unplanned equipment/plant upgrades
- inherent defects
- technical obsolescence
• performance standards may deteriorate below project specifications or may not
be maintained due to:
- reduced input quality
- unsuitable design
- reduced equipment reliability
- inherent defects
- force majeure events