A.5 Further example of risk assessment against procurement options

The general balance of risk exposure for the government under each procurement option is outlined in the following preliminary risk allocation matrix. This matrix would be based on a preliminary risk assessment and is not intended to present a definitive risk position under each procurement option. Instead, it seeks to highlight a general comparison of risk allocation across the options.

Risk	Preliminary Allocation
	D&C	Alliance (1)	DBOM	PPP
Scope / specification risks
Scope / specification risk	Government	Government	Government	Government
Site and approval risks
Site availability and access risk	Government	Government	Government	Government
Site condition risk	Government	Government	Government	Private
Land acquisition risks	Government	Government	Government	Shared*
Environmental approvals risks	Government	Government	Government	Shared*
Planning approvals risks	Government	Government	Government	Shared*
Design, construction and commissioning risks
Design risks	Government	Shared	Government	Private
Construction risks	Government	Shared	Government	Private
Construction cost escalation risk	Private	Shared	Private	Private
Supplier risk	Private	Shared	Private	Private
Operating risks
Demand risk	Government	Government	Government	Some private
Operating performance risks	Government	Shared	Private	Private
Maintenance risks	Government	Shared	Private	Private
Operating cost escalation risks	Government	Shared	Private	Private
Change in specification risks	Government	Government	Government	Government
Obsolescence risk	Government	Government	Government	Private
Competition risk	Government	Government	Government	Government
Other risks
Interface risks	Government	Government	Shared	Shared
Change in legislation risk	Government	Government	Government	Shared
Industrial relations risk	Government	Government	Government	Private

(1) Competitive Alliances, for each of construction and operation

* Government bears risk in relation to its reference design, with the private sector at risk for the extent of departures from that design.

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