Factor

Risk Allocation

Payments to the Project Company are fixed irrespective of the level of demand.

More likely to be government risk

Payments to the Project Company increase, or decrease relative to the level of demand.

More likely to be Project Company risk

Where demand and use have a significant impact on the wear and tear and condition of facilities and the Project Company is not compensated for such use. For example, where additional use might incur increased, or earlier than forecast maintenance costs, additional security, cleaning and waste removal costs to comply with the performance regime and greater help desk resource requirements, due to higher numbers of users. If such costs are borne by the Project Company, through the Payment Mechanism, this will have an impact on its profits.

More likely to be Project Company risk

Where government requires the provision of a fixed capacity and any under-estimation in capacity requires government modifications, or alternate provision.

More likely to be government risk