Mail designer 1.2.11/28/2024 But caution should be taken if the risk assessment evidences that uncertainty is highly significant. An example is a road conceived to attract users from toll-free alternatives to lower congestion.In such situations and in general, when the higher utilization of the asset is a strategic objective for the government, demand risk should be transferred. When the project contract is designed on the basis of user payments, it is understood that there is an explicit intention of the government to charge users, so the higher the use (the demand for the service) the better is the outcome. In transport projects, if the transport service to the user is not included in the scope of the contract, but the contract relates only to the infrastructure, transferring demand risk does not provide Value for Money. In social infrastructure projects, higher use of the facility is generally not a natural policy objective and volume/use risk should be removed from the contract. However, if the contract does not provide the necessary tools for managing the demand risk (basically, the ability to influence the management of the service provision to the user), the risk should not be transferred. If the essence of the PPP is to operate institute tariffs or collect tolls, some exposure to risk should naturally be included in the contract. Another general rule for deciding the allocation of use/demand is the scope of the project. Significant transfer of the risk, with no mitigation or sharing mechanisms, should only be considered when boosting demand is essential to the success of the project from the government’s perspective (see section 4.9).
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