To focus effort when allocating risks, it is often also helpful to consider the importance of the different risks. Some risks will be much more significant than others: in terms of the likelihood of the risk occurring, the severity of its impact on project outcomes, or both. Risk c an be assessed either quantitatively, or qualitatively.
The Infrastructure Australia guidance note on calculating the PSC [#14, pages 84-109] provides detailed guidance both on identifying risk, and using various quantitative techniques to evaluate risks. An ADB handbook for risk analysis in project evaluation [#7, pages 9-28] also includes a chapter describing quantitative techniques for assessing risk.
In practice, many implementing agencies take a more qualitative approach at this stage. Guidance on risk management by the Victoria Managed Insurance Authority [#22, pages 79-83] provides helpful guidance on a risk 'heat map'-a qualitative risk assessment approach, in which risks are categorized according to their likelihood of occurrence, and impact. Farquharson et al [#95, Appendix B] provides an example 'risk register' for a PPP project, which also takes a qualitative approach. Each risk is categorized as being low, medium, or high for both 'risk status' (likelihood) and 'impact'. Most effort should be directed to managing those risks identified as being both high likelihood, and high impact.