P3s & Risk

November 7, 2017 - Surety 101

Hello I’m Sheila Thompson, principal of Rosenberg & Parker of Canada. Public private partnerships, P3s and risk. Well we all know that any construction project is risky and it is no different with a P3 project. The construction risk is still there. But with a P3 model the risk is allocated to the party that is best suited to manage and mitigate that risk. So we have construction risk, commercial risk this is real important in a P3 model because the project actually has to be completed on time so that it is up and operating and running and can generate the revenue needed to start paying down the debt caused by building the thing in the first place. So that’s an extra part of risk we see in a P3 model that we don’t see in the regular construction industry. And there is also contractual risk. The P3 contracts are very complex and add in more elements of risk perhaps than you would see in a normal construction project. An example of this would be what we call liquidated damages which would be a penalty for delay in completing a project. At Rosenberg & Parker our vision is clear and it’s PURE surety.

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