Risk category

Description

Consequence

Mitigation

Likely preferred allocation

Network and interface - section 9

Network risk is the risk that the network(s) needed for the private party to deliver the contracted services will be removed, not adequately maintained or otherwise changed - including being extended to include additional infrastructure or services not foreseen or anticipated at the date of the contract - in a way that either prevents or frustrates the delivery of the contracted services, affects the quality of the specified outputs or in some other way affects the viability of the project.

Interface risk is the risk that the method or standard of delivery of the contracted services will prevent or in some way frustrate the delivery of the core services or vice versa.

Withdrawal of support network

The risk that, where the facility relies on a complementary government network, that support is withdrawn or varied adversely affecting the project.

Negative patronage and revenue consequences.

private party will seek financial redress against change which unfairly discriminates against the project particularly on a user pays project where revenue is directly affected; under an availability model private party will seek to avoid abatement if government 'prevention' is cause of unavailability.

private party except where government initiates changes that discriminate against the project.

Changes in competitive network

The risk that an existing government network is extended/changed/re-priced so as to increase competition for the facility.

Negative patronage and revenue consequences.

private party will seek financial redress against change that unfairly discriminates against the project by government subsidising competition (existing or new).

private party except to the extent that government provides redress for appropriate, discriminatory changes.

Interface (1)

The risk that the delivery of core services occurs in a way that is not specified/anticipated in the contract adversely affects the delivery of contracted services.

Adverse effect on delivery of contracted service, potential for default by private party and possible need for government to make other arrangements for service provision.

Government manages core service activities allowing it to influence the materialisation of interface risk and its consequences; other mitigants include an upfront assessment (by both government and the private party) of the likely interface issues, continual review and monitoring and development of a communications strategy in respect of delivery of the two related services; government will also specify in the contract the extent of core services and the way in which they will be delivered so that only manifest and adverse changes and deficiencies can trigger this risk.

private party except to the extent that government provides redress for appropriate, discriminatory changes.

Interface (2)

The risk that the delivery of contracted services adversely affects the delivery of core services in a manner not specified/anticipated in the contract.

Adverse effect on delivery of core services, default by private party and possible need for government to make other arrangements for core service provision.

private party manages contracted service activities.

private party.