In this lecture
- Identify the major risk categories in a project
- Allocate each risk to the party best able to manage it
- Recognise when the public sector should retain a risk
Risk goes to whoever can control it
Bankability is largely a question of whether risks sit with the party able to manage them. Demand risk placed on a contractor who cannot influence demand is priced heavily, or refused outright; the same risk retained by the implementing authority may cost far less across the life of the project.
Some risks belong with government, deliberately
Land acquisition delay, permitting risk and policy risk are usually cheaper for the public sector to hold than to transfer, because the public sector is the party that can actually resolve them. Transferring them anyway is not caution, it is an expensive way to look prudent.
Materials
Yours to keep, and usable away from the platform.
- Risk allocation matrix - templateWorksheet · 118 KB
Design prototype - the attachments are placeholders and nothing downloads yet.
Lecture quiz
4 questions, plus 2 written questions at the end - taken whenever you are ready. This is what unlocks the next lecture.