Risk Category

Description

Consequence

Mitigation

Preferred allocation

Force majeure

Force majeure

The risk that inability to meet contracted service delivery (pre- or post- completion) is caused by reason of force majeure events.

Loss or damage to the asset, service discontinuity for government (may include inability to deliver core service) and loss of revenue or delay in revenue commencement for private party.

The private party is given relief from consequences of service discontinuity. If uninsurable, private party may establish reserve funding. Government to establish contingency for alternate service delivery. If insurable, private party must ensure availability of insurance proceeds towards repair of asset and service resumption and government is to be given the benefit of insurance for service disruption costs.

The private party takes the risk of loss or damage to the asset and loss of revenue. Government takes some risk of discontinuity of contracted service and core service, subject to insurance availability, and will need to arrange alternative service provision, the cost of which will be met from redirected service payments and (if insurable) any shortfall made up from insurance proceeds.