There are many different types of risk, with some types being more or less important depending on the type of PPP. For example, design and construction risks are higher in infrastructure projects while technology change risks are higher in PPPs with more IT involved. Appendix A compiles a list of examples of risk categories that could be included. Note that this list is incomplete and further research is required on the part of the public sector agency to determine which risks need to be included based on the specific nature of the project. For the purposes of the PCC, only material risks need to be identified and will be included within the Transferable Risk and Retained Risk PCCs.36
Once all risks have been identified, the potential cost of the risk needs to be calculated. This cost is equal to the consequence of the risk multiplied by the probability of its occurrence added to a contingency amount. As the consequences of risk can be direct and indirect, these interactions and implications need to be addressed in the PCC. Once each consequence is identified, the probability of the consequence is taken into account. It is useful to construct a risk matrix to organize the risks, their consequences, the outcome, and the probability of the outcome and consequence.37
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36 Partnerships Victoria (2001), 31.
37 Ibid.