The risk allocation negotiated for each project will result in a set of risks being retained by the government party. The project's funding allocation will recognise the price of these retained risks by setting aside a budget for 'retained risks funding' which can be called upon at any time during the project's life in the event that these risks materialise. In practice, for most Partnerships Victoria projects, some level of funding is set aside for construction phase retained risks only.
The project director must recognise the purpose of the retained risk funding, and guard against the idea that it should be treated as a construction phase contingency fund. The project's governance structure should monitor the use of retained risk funding for risks which eventuate. Access to retained risk funding should require prior endorsement by the steering committee.
Pressure can arise for the retained risks funding to be used to fund scope changes, including modifications initiated by the government party. However, this funding should not be used for that purpose. Scope changes and design departures need to be funded by offsets or additional funding should be sought through the existing budgeting processes.