How subjective is the PFI risk assessment process?
The assessment of risk is common practice in most industries. Insurance companies are continually assessing risks as part of the process of setting insurance premiums. The construction industry uses a well-defined process and historical data to assess the risks associated with building contracts. The NHS has also undertaken risk assessments to determine the level of contingencies that need to be included in the estimated capital cost of building projects. PFI has expanded the scope of these risk assessments to include the long-term risks of operating a hospital. Issues such as the appropriateness of a design, the cost of maintaining the building, the level of energy usage, maintaining the building at the correct temperature and the life of plant and equipment are included in the risk assessment of a PFI project. For most of these risks there is historical data available against which an estimate of the probability and cost of a risk occurring can be measured. There are some subjective
