In some instances, demand risk can be addressed by normal market mechanisms and allocated substantially to the private sector. The scale, the site specificity, the need to provide full capacity in advance of demand, the potential for changes in market dynamics over the longer than usual economic life of a project all impact on the assessment of demand risk.
Where the demand for outputs is determined substantially by the public sector, demand risk can be identified in terms of a number of factors, for example:
■ the availability of the asset;
■ variable payments for service quality, which will be clearly distinguished from unitary payments associated with the right to use the asset; or
■ payments based upon actual use, such as "shadow" tolls or fees.