Demand risk

Port Port

Description (What is the Risk)

The availability by both volume and quality along with transportation of resource or inputs to a project or the demand for the product of service of a project by consumers/users

Risk Allocation (Who typically bears the risk)

Allocation: Public Private Shared
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Description (What is the Risk)

The availability by both volume and quality along with transportation of resource or inputs to a project or the demand for the product of service of a project by consumers/users

Risk Allocation (Who typically bears the risk)

Allocation: Public Private Shared
Rationale

In emerging markets the Private Partner typically takes the full demand risk on port projects.

On certain robust projects the Private Partner may also need to give minimum throughput guarantees in relation to the number of TEUs processed per month.

Mitigation Measures (What can be done to minimize the risk)

The Contracting Authority's inefficient provision of marine services, insufficient maritime infrastructure maintenance or insufficient channel dredging may impact on the port users' demand for the project.

Accordingly it is common for Contracting Authorities to be required to guarantee certain levels of protection against competing ports (within a particular distance or time envelope) and to guarantee the punctual and adequate provision of certain supporting services.

Government Support Arrangements (What other government measures may be needed to be taken)

Competition from competing port facilities in-country (whether new or existing) is a major risk.

See guarantees referred under 'mitigation'.

Comparison with Developed Market

In particularly robust emerging market projects the Private Partner may need to provide a minimum throughput guarantee subject to compliance by the Contracting Authority with its maintenance and supporting infrastructure obligations.



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