Disruptive technology risk

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

Description (What is the Risk)

The risk that a new emerging technology unexpectedly displaces the established technology used in a particular waste treatment process.

Risk Allocation (Who typically bears the risk)

Allocation: Public Private Shared
Rationale

Where the waste treatment facility has been constructed and is operating there is less risk of disruptive technology affecting the project.

Where the waste treatment facility has not yet been completed and commissioned, disruptive technology becomes more of an issue if the procuring Authority is aware of new and more competitive technology which they can use to drive the cost down. This requirement places additional constraints on the Private Partner and the possible profits of the project.

There may be a wider risk if disruptive technology (or change in law) leads to a substantial reduction in the volume of waste available to the facility.

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

The Private Partner can mitigate the impact of disruptive technology by ensuring that it, and the EPC contractor, are aware of and have access to up to date and efficient technology.

Comparison with Emerging Market

Established technologies are most likely to attract commercial lending terms as banks are keen to see tested operational projects as a benchmark. New technologies in emerging markets will potentially be attractive to Contracting Authorities but it will be difficult to attract commercial lenders.

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