It is not without reason that risk management is seen as an integral activity in project structuring. Risk management spans demand analysis, revenues, discount rates, and costs, as each of these elements has a set of underlying "uncertain" assumptions.
| Relevance of Risks in Structuring PPPs Risk is the chance of an event which may cause a project circumstance to differ from what was earlier envisaged (while forecasting project costs and benefits). The outcomes of risks can either be negative or positive. They can present opportunities (for excellence) as well as threats. Risk management is a widely recognized discipline or practice that can be applied across many business boundaries. Risk management requires having practices in place to identify and then monitor risks; convenient access to dependable, current information about risks; the correct balance of control in place to deal with the risks; and decision-making processes that are supported by a framework of risk analysis and evaluation. More on Risk Management can be found in Module 10. |