Factor

Indicates

A significant change in demand for the facility will directly affect the amount the government pay the Project Company.

Higher level of importance

Projects with longer concession periods mean that there is a high probability that actual demand may be materially different to forecast demand.

Higher level of importance

Projects with a user pays structure will be subject to higher demand risk than those projects which are free at the point of use.

Higher level of importance for user pays projects

Projects with alternative public, private and voluntary sector provision are likely to have a higher demand risk than those with no alternative provision.  For example, a prisons project has fewer competing options than a school or hospital which may compete with private providers.

Higher level of importance where there are competing demands

Projects subject to rapid technological change will have a higher level of demand risk, than projects which will not change over time.  For example, a fibre optic broadband project is likely to be more subject to demand risk than a schools project.

Higher level of importance for projects where pace of technological change is higher