Alliance projects by nature are usually more complex and contain more risk elements than other projects. Furthermore, the parties to an alliance, including the Owner, will be exposed to the cost consequences of risks where they would normally be allocated to an individual party. Careful attention must be provided when preparing risk assessments for alliances.
In the alliance context it is important to understand that:
• Owners share risk (and opportunity) with the NOPs within the constraints of the Risk or Reward regime;
• Owners carry 100% risk where a NOP's painshare cap (if applicable) is reached; and
• Owners are a defacto contractor (as explained in the Guide).
The following sections highlight key areas where Owners should have strong capability and understanding either though their own resources or through engaging specialist advisors.