This primer addresses Risk Assessment for public-private partnerships (P3) and has been prepared as a companion document to FHWA’s recent primers on Value for Money Analysis and Financial Structuring and Assessment for P3s. Project risk management is an iterative process that begins in the early phases of a project and is conducted throughout the project’s life cycle. It involves systematically considering all possible outcomes before they happen and defining procedures to accept, avoid, or minimize the impact of risk on the project.
The primer contains seven chapters. Following an introduction, Chapter 2 discusses how the extent of risk transfer varies by type of project and type of P3 contract. Chapter 3 outlines the key types of risks faced in P3 projects. Chapter 4 presents analysis of project risks to assess their cost impacts. Chapter 5 explains how risks are optimally allocated between the public and private sectors to minimize total project life-cycle costs. Chapter 6 discusses how costs of risks under traditional and P3 procurements may be incorporated into Value for Money analyses often used to compare the two procurement options. Chapter 7 concludes with a summary.
HTML version of Draft Report (September 10, 2012)
PDF version of Draft Report (September 10, 2012)