Planning

7

Allocating Functions and Assigning Risks

Once risks have been mapped to the functions they can affect, planners may generate strategies for the efficient allocation of functions and risks. This chapter explains how the risks inherent in an urban bus public-private partnership (PPP) project should be allocated based on stakeholders’ competencies and abilities to manage a given set of risks. In some cases, actors in the private and public sectors may have equal ability to manage risks or may face the same limitations, which suggests that the risks are best shared. This chapter also discusses mitigation strategies.

Each section describes a function and an ideal allocation for that function as well as the risks that originate within it. For each risk, the analytical framework includes the following:

• A brief description • Mitigation measures and strategies • Lessons learned and best practices, with reference to selected case studies (presented in appendix A) • Further references for additional information and assessments of the risk.

PLANNING

Risks that originate at the planning stage can materialize at a later phase of the project, with severe impacts. The wide reach of these impacts and the general role of the government (Amos 2005) means that, in principle, governments are best placed to assume (a) the planning function and (b) responsibility for managing the risks inherent in this function—for two reasons:

• The public sector controls the risk factors (such as licensing and permits), mechanisms to obtain the land, and the resettlement plan • The public sector is best suited to engage with all stakeholders.

Land availability and acquisition

If the project includes infrastructure, the site for building the infrastructure must be ready and available, ideally before commercial closure. Many times,