For owners, Public-private partnerships (PPP) represent an opportunity to not only secure private funding for needed infrastructure projects, but also an opportunity to transfer significant risk to the private sector, especially the Contractor and its Engineer. The selection of the Concessionaire is influenced by its appetite and ability to accept risk, including significant subsurface condition risk. The Financier will evaluate whether the project is “bankable” based on its own assessment of risk assumption and allocation. Both the Concessionaire and the Financier seek to transfer significant risk to the Contractor and its Engineer. Over the last four decades, the underground design and construction industry has made significant progress in developing improved contracting practices that promote fairness in risk allocation. These practices do and should apply in the PPP context. This paper addresses the subjects of risk in major subsurface PPPs and provides recommendations for fair and efficient risk allocation.
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