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welcome to the fourth module of it caps a learning series on public-private partnerships or PPP in this module we will discuss a critical element of PPP project the risk allocation what are the risks to consider and how are these risk based located among partners reso location is important because its a critical factor to the success of PPP project if all the risk is shifted to the private partner the project will be deemed too risky and there will be no interest from the private partner nor any banks prepared to finance it on the other hand if all the risks remain in the public partner then there will be a limited incentive for the private partner to innovate and perform efficiently in this case using the PPP mechanism might not offer any added value compared to traditional procurement so finding the right balance of risa location will be critical to the success of PPP project to find this balance we often say that the risk should be allocated to the party best equipped to manage it