A thorough understanding of the PPP contract is essential for mitigating the risk of claims and preparing for their receipt where a claim may be inevitable. For this it is common for the Procuring Authority to establish a risk register which should provide a continuous assessment of the relevant risks in terms of their likelihood, severity and potential mitigation measures available.
The risk register should be revisited on a regular basis throughout the life of the project as the risk environment will likely change given the long timeframes involved. This involves assessing and reassessing, on an ongoing basis, both the likelihood and severity of impact should a risk materialise and assessing whether there are any actions that the Procuring Authority can take to prevent or mitigate those risks, given any new information that has been made available.
Monitoring project risks will mean the Procuring Authority is aware of potential claims and can start considering them and planning for them before they are received from the Project Company.
The Procuring Authority should consider the implications of changes in technology over the contract duration. For example, what happens when certain lifecycle items become obsolete due to technology changes or changes to services due to technological advancement? Changes in law can also affect the risk profile of a project. It is unusual for changes in law to happen overnight, perhaps with the exception of international sanctions. Where the prospect of a change in law or technology change appears reasonably likely, it is sensible for the Procuring Authority and the Project Company to discuss in advance how those changes will be addressed.