Understanding and managing risk in PPPs

28 February 2013

Service Works Group publishes White Paper on risk management and mitigation in public private partnerships

A new white paper from Service Works Group, PPP operational performance software provider, examines the risks inherent in public private partnerships and the ways in which these can be managed.

Risk is a part of any activity but when millions of pounds of public money are involved and contracts are being signed for 25 years or more, then it takes on a different magnitude. Public private partnerships (PPPs) pose particular challenges of risk managementwith the potential to cause losses or additional costs for the organisations involved.

PPPs –understanding and managing risk covers each stage of a PPP from construction, through completion to operations, including both hard and soft facilities management.

Whether your organisation is a public authority, an investor in the SPV, or a construction or facilities management subcontractor, appreciating the risk of taking part in a PPP project is fundamental.In well-designed PPPs each risk is identified, allocated and mitigated to ensure continuity of services and the financial viability of the project. This white paper sets out how PPP risks can be transferred or mitigated and explains how the changing funding climate has affected risk and led to new financing models being adopted in markets such as Australia and Canada.

The white paper concludes that contractual clarity and transparent performance management are at the heart of managing PPP risks.

The performance management framework needs to be supported by a sophisticated information infrastructure, providing the public authority with a transparent view of the quality of service delivery and an audit trail.Risk management in the operational phase requires performance management software, with an integrated payment mechanism, to deliver trusted and transparent data management, to ensure issues are resolved quickly and to encourage effective PPP relationships.

For a copy of the Service Works Global White Paper PPPs –understanding and managing risk, please email info@swg.com with your contact details.