Risk Category

Description

Consequence

Mitigation

Preferred allocation

Network and interface

Withdrawal of support network

The risk that, where the facility relies on a complementary government network, that support is withdrawn or varied adversely affecting the project.

Negative patronage and revenue consequence.

The private party will seek financial redress against change which unfairly discriminates against the project, particularly on a user pays project where revenue is directly affected.  Under an availability model, the private party will seek to avoid abatement where the cause of unavailability is due to government withdrawal of a support network.

Government, where the change discriminates against the project.

Changes in competitive network

The risk that an existing network is extended/changed/ re-priced to increase competition for the facility.

Negative patronage and revenue impacts.

The private party will seek financial redress against change which unfairly discriminates against the project by government subsidising competition (existing or new).

The private party, except to the extent that government provides redress for appropriate, discriminatory changes.

Interface (1)

The risk that the delivery of core services in a way not specified/anticipated in the contract adversely affects the delivery of contracted services.

Adverse effect on delivery of contracted service, potential for default by private party and possible need for government to make other arrangements for service provision.

Government manages core service activities, allowing it to influence the materialisation of interface risk and its consequences. Mitigation also includes an up-front assessment (by both government and the private party) of the likely interface issues, continual review and monitoring and development of a communication strategy in respect of delivery of the two related services. Government will also specify in the contract the extent of core services and the way in which they will be delivered so that only manifest and adverse changes and deficiencies can trigger this risk.

The private party except to the extent that government provides redress.

Interface (2)

The risk that the delivery of contracted services adversely affects the delivery of core services in a manner not specified/anticipated in the contract.

Adverse effect on delivery of core services, default by private party and possible need for government to make other arrangements for core service provision.

The private party can mitigate this risk by managing the way in which it delivers the contracted service activities.

Private party