16.1 Methodology
Guidance notes - Methodology |
This section of the report should document the methodology adopted in carrying out the risk valuation on the PSC. |
Methodology for project risks (example)
The methodology used to identify, allocate and evaluate project risks is outlined below. These steps helped to ensure that risks were systematically recorded and quantified for the project.
Step 1: | Identify risks |
Step 2: | Categorise risks |
Step 3: | Estimate the likelihood of the occurrence of each risk |
Step 4: | Estimate the financial impact of the occurrence of each risk |
Step 5: | Allocate risks as transferred or retained |
Step 6: | Finalise the formation of the risk register |
Step 7: | Incorporate quantifiable risks into the PSC financial model discounted cash flow analysis. |
The majority of the risk information was gathered and refined in five phases.
Phase One: Structured risk identification workshop
Phase Two: Structured risk quantification workshop
Phase Three: Further refinement of the risk quantification by risk experts
Phase Four: Risk review workshop
The data gathered through this process is documented in the risk register which is contained in the PSC financial model.