The next step involves assessing the effects of the risks in quantitative and/or qualitative terms for all possible risk factors. The risks may affect the service outcome of the project (for example, the project fails to deliver on time or provides service at a lower level), or the commercial viability of the project (for example, lower return on investment, or difficulties in debt servicing).
Many different techniques ranging from the rule of thumb (based on past experiences) to sophisticated simulation models are available for the assessment of different risks in a project.15 However, it is important to mention here that risk analysis is not a purely scientific process. While the available sophisticated tools may help in assessing the risks, in the end, it is as much an art as it is a scientific process.
PPP contracts often include incentives that reward private partners for mitigating risk factors.
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15 General purpose and special purpose softwares are available for risk assessment of infrastructure projects. Inforisk is a special purpose software developed by the World Bank. There are also many general purpose softwares commercially available.