Design risk

Solid waste collection, disposal, landfill and recycling Solid waste collection, disposal, landfill and recycling

Description (What is the Risk)

The risk that the project has not been designed adequately for the purpose required.
Feasibility study.
Approval of designs.
Changes to design.

Risk Allocation (Who typically bears the risk)

Allocation: Public Private Shared
Rationale

The Private Partner will have principal responsibility for adequacy of the design of the facility and its compliance with the output / performance specification.

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

The Contracting Authority will often broadly draft the Private Partner's design and construction obligations to satisfy the output specifications and ensure compliance with applicable legal requirements and good industry practice standards. This allows for private sector innovation and efficiency gains in the design and choice of appropriate waste treatment technology.

A design review process will allow for increased dialogue and cooperation between the Contracting Authority and the Private Partner; however the mutual review process should not be construed as a reduction or limitation of the Private Partner's overall liability.

Comparison with Emerging Market

Developed market projects benefit from stable precedent or comparator projects which allow the Private Partner to demonstrate technology to the Contracting Authority. However the use of comparator projects as 'most bankable' can stifle new innovation.

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