This is the risk that the existing network will be removed, developed or extended to include new systems or services, or changed in some other way that, in each case, creates or increases competition with the contracted services, and jeopardises project revenues. The issues arising from this type of network risk are closely related to demand risk and how it is allocated in the project.
For example, a new government-subsidised road may draw custom away from a public private partnership road project, or government may enter into other arrangements for accommodation services competing with those supplied under the contract.
Whether or not government bears network risk of a competitive nature is essentially a question of whether, and to what extent, government should give undertakings about the development of rival public services or facilities from which such services are to be delivered. Government clearly has the potential to mitigate the demand risk taken by the private party, but must weigh competitive priorities in determining whether to do so.