2.49 PPP projects represent a significant investment over a lengthy time period. It is important, therefore, that the procuring entity has a strategy for managing any risk that it retains during procurement, construction and operations. Such a strategy should cover risks that may arise directly from the project and those risks associated with the realisation of benefits from the project.
2.50 The risk management strategy should therefore set out how any potential risks will be monitored in order that their materialisation can be identified at an early stage. It should also consider the resource requirements required to implement the strategy. An example of an internal risk management register is detailed in Appendix 1b of this Section.
2.51 Where risks have been transferred to the private sector, the procuring entity should demonstrate how the contract facilitates such transfer. The FBC should confirm that there are no material outstanding issues affecting the allocation of risk between the parties.
2.52 Whilst it is not necessary for the NHS body to have a detailed understanding of its private sector partner's risk management strategy, it should have confidence that the SPV has a plausible strategy for managing the risk it bears. It is important to note that the NHS body should have assured itself at the bidding stage about potential partners' capacity to bear risk and this will be evaluated in the procurement stage.