The output of the risk allocation process at this stage is often a risk allocation matrix. The risk allocation matrix lists risks-often sorted by category-and defines who bears each risk. This risk allocation is then put into practice by including the appropriate clauses in the PPP contract as described in Section 3.4: Designing PPP Contracts. Farquharson et al [#95, Appendix B] provides an example 'risk register' (or matrix) for a PPP project.
Some governments capture the risk allocation principles described above in 'preferred risk allocations', often presented in the form of a preferred risk allocation matrix. These preferred allocations may be generic, or specific to sectors or types of project. They are usually a starting point for allocating risk on a particular project, since projects often have particular characteristics that may mean a different risk allocation would provide better value for money. Risk allocation matrixes should be checked again prior to signing the contract to review the responsibilities of each party before it is legally binding. This final review could also serve as an additional gate-keeping mechanism.
The following are examples of preferred risk allocations and risk allocation matrices:
• Infrastructure Australia has produced 'standard commercial principles' for both economic and social infrastructure projects [#15], which describe in detail how risks and responsibilities will be allocated
• Hong Kong's Introductory Guide to PPPs [#131, Annex E] provides a detailed example of a risk matrix for PPP of a water treatment plant
• The Government of Rio de Janeiro's PPP Manual [#35, Annex 2] provides an example of a risk matrix for a PPP infrastructure project
• South Africa's PPP Manual, Module 4: PPP Feasibility Study [#219, Annex 4] includes a standardized PPP risk matrix-listing risks, and describing for each risk a typical risk mitigation mechanism and allocation.