Operating risk is one of the key risks allocated to the private party by the structure of a public private partnership arrangement under which the responsibility for the delivery of the contracted services to specification lies with the private party. This position may need to be adjusted to take account of the impact of various government directives.
Furthermore, while government is freed from traditional operating risks in a public private partnership arrangement, operational failure still poses a significant risk, where government may be left without the services for which it has contracted.
Government should seek to ensure that the operational risk for the delivery of the contract services remains with the private party and is not inadvertently assumed.
However, complete removal of direct government involvement in operational matters may not always be possible. Government may be bound, as a matter of policy, statutory obligation or practical necessity, to ensure that certain operational criteria are met.