Low traffic volume, and the low toll revenues that result, contribute greatly to the failure of toll road public-private partnerships (PPPs). This risk has several sources, including forecasting error, uncertainty inherent to the forecasting process, and bias. While some level of traffic risk will always be present in highway PPPs, governments, the private sector, and financiers can take steps to reduce and manage this risk through robust forecasting techniques and selecting the appropriate project structure.

This current edition of the Guidance on PPP Contractual Provisions, 2019 Edition (“Guidance”) is largely based upon work done by the international law firm of Allen & Overy LLP, under a team led by David Lee, Helga Van Peer, Tim Conduit, Fleur Clegg and Sarah Garvey, with input from across Allen & Overy’s global PPP practice.

According to Norton Rose, The impact of climate change on the risk allocation of construction projects, September 2014, builders are more likely to require a more expansive range of adverse weather conditions to be included in the FM provisions such as prolonged periods of extreme heat, landslides or cyclones, tornadoes, earthquakes and other natural disasters.