As the above highlights, the PPP model is becoming an increasingly global contracting approach for governments. It is important to remember, however, that PPP Project risks vary depending on the country where the PPP Project is located, the nature of the PPP Project and the assets and services involved.10
A road PPP Project, for example, is very different from a hospital PPP Project which in turn has some very different features to an airport PPP Project. Similarly, a defense PPP Project is likely to involve issues of national security which do not affect other sectors in the same way. The key is to understand where these differences lie and to apply the same principle of allocating each risk to the Party best able to manage it consistently with a view to maximising the value received by the Contracting Authority (measured by overall cost as well as quality of service provided by the PPP Project).
Many resources provide "standard" risk matrices and sample risk allocations, in some cases for specific project types. These can be useful when identifying project risks for a particular PPP Project. However, PPP Projects usually have unique features or circumstances - for example, the particular geological conditions on the route of a proposed road. Moreover, the typical risk allocation position in a developed PPP market in an established jurisdiction may not be appropriate in an emerging PPP market. This means that Contracting Authorities should ensure that experienced advisors identify a comprehensive list of project risks and analyse carefully how such risks should be allocated in the context of each individual PPP Project.11
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10 For example, environmental and social risks (such as the risk of damage to the environment and/or local communities due to existing latent environmental conditions) will vary depending on the specific nature of the PPP Project as well as the assets and services it involves. Accordingly, such risks and their impacts may need to be particularly identified and assessed as part of the Parties' due diligence. For specific examples of risk allocation, see the Global Infrastructure Hub Report: Allocating Risks in Public-Private Partnership Contracts, 2016 edition, e.g. the Environmental and Social risk entries in Risk Matrix 1: Toll Road (DBFO) and Risk Matrix 2: Airport (DBFO). See link in Appendix, Additional PPP Resources.
11 For sector specific risk matrices, see the Global Infrastructure Hub Report: Allocating Risks in Public-Private Partnership Contracts, 2016 edition. See link in Appendix, Additional PPP Resources.