2.1 Risk represents the possibility that things will not go as expected. Such a possibility is inherent in any project - whether PPP or not. And the level of risk is exacerbated by factors such as the size, complexity and type of project commissioned, the cost, and the length of both the construction and operating periods.
2.2 Throughout a PPP process, the sponsoring organisation should undertake extensive analysis of risks (both those transferred and those retained) in order to ensure that it makes the right decisions at the appropriate stages. Via the presentation of risk analyses within the Outline and Full Business Cases, it should seek to demonstrate the value for money (VFM) and affordability of its scheme, and the way any risk retained will be managed.
2.3 This chapter sets out how risk analysis should be approached during a PPP procurement within NHSScotland. For each stage of the procurement process, the chapter outlines:
• the types of risk that need to be analysed;
• the extent of the analysis required; and
• the way in which the analysis should be presented in the relevant business case.
2.4 To promote consistency and learning over time, it is important for project sponsors to closely follow the approach outlined in the chapter. Reference should be made to the Scottish Govt PPP VFM Assessment guidance.