Risk
|
Description
|
Public
|
Private
|
Shared
|
Mitigation
|
|---|
|
|
Inadequate performance
|
The risk of service quality provided by the concessionaire not meeting contracted service standards or availability
|
|
x
|
|
Ensuring the appointment of a competent operator who could remediate any inadequacies in performance.
|
|
O&M costs overrun
|
Risk of O&M costs being higher than forecast or budgeted .
|
|
x
|
|
Appointment of competent operator and management putting into place timely remedial steps.
|
|
Life cycle costs overrun
|
Risk of lifecycle costs being higher than forecast or budgeted
|
|
x
|
|
Appointment of competent operator and management putting into place timely remedial steps to manage increased costs; passing of increased costs to end-users within the parameters of fee and charges setting regime
|
|
Utilities costs overrun
|
Risks of utility costs being higher than estimated or budgeted due to inefficiencies or increased charges
|
|
x
|
|
Appointment of competent operator; proactive asset management to ensure that assets are maintained in a manner that optimises costs.
|
|
Latent Defects and Existing Liabilities
|
Risks of latent defects and existing liabilities in the airport assets
|
|
|
x
|
Conduct adequate technical due diligence; the Private Sector to bear the risk up to a certain threshold beyond which the risk will be borne by the Public sector.
|
|
|
Demand and traffic risk
|
Actual traffic at the airport is lower than forecast causing a shortfall in actual aeronautical revenue against budgeted revenue
|
|
x
|
|
Ensure that traffic survey and forecast are conducted by competent advisers; defer timing of capacity-driven capital expenditure program; re-deployment of staff and re-calibration of level and intensity of operational functions,
|
|
Non-aeronautical revenue risk
|
The concessionaire fails to attract tenants or patronage at retail concessions is lower than budgeted causing a shortfall in actual vs. budget non-aeronautical revenue
|
|
x
|
|
Comprehensive feasibility study to be conducted, including detailed review of Government objectives and plan; due planning and marketing initiatives.
|
|
Failure to collect airport charges
|
Due to failure or non-optimality of collection system from passengers and airlines
|
|
x
|
|
Proven collection system and good operational performance.
|
|
Charges setting risk
|
Risk that fees and charges indexation does not match inflation or cost increases and escalations, thereby impacting margins or that the Relevant Authority does not approve escalation as per agreed fee and charges escalation mechanism
|
|
|
x
|
Clear regulations or contract terms that regulate the rate and adjustments of fees.
|
|
|
Failure to achieve financial close
|
Inability to achieve financial close due to market uncertainty or the project capital structure is not optimal
|
|
x
|
|
Good coordination with potential and credible lenders.
|
|
Foreign exchange rate risk
|
Fluctuation of foreign exchange rate
|
|
x
|
|
Financing in local currency to the extent possible; taking into accounts currency fluctuation hedging instruments; such as future contract and currency options.
|
|
Inflation and interest rate risk
|
Increase of inflation rate used for estimating life- cycle costs and interest rate
|
|
x
|
|
Fee and charges indexation factor; interest rate hedging.
|
Change in law/ regulation
|
General change in law
|
Change in law such as taxation which impacts all businesses and industries
|
|
x
|
|
General change in law risk should be borne by the concessionaire.
|
| Discriminatory or project specific change in law |
Change in project-specific law or regulation such as fee and charges setting |
x |
|
|
Mediation, negotiation; political risk insurance; |
|
|
Natural disasters
|
The occurrence of natural disasters disrupting operations
|
|
|
x
|
Insurance, to extent possible.
Climate mitigation and adaptation plan.
Emergency Preparedness and Response plan (EPR plan) / Disaster Risk Management plan (DRM plan).
Incorporate Qualified Climate Risk Events.
|
|
Political force majeure
|
Events of war, riots, civil disturbance
|
|
|
x
|
Insurance, to extent possible; termination with compensation if settlement cannot be reached.
|
|
Prolonged force majeure
|
If above prolongs for 6 to 12 months, may cause economic problems to the affected party (esp. if insurance does not exist)
|
|
|
x
|
Either party should be able to terminate the contract and trigger an early termination.
|
E&S Risks and Climate Risks
|
E&S risks management
|
Airport development and operation create many E&S impacts and risks, which if not appropriately managed, can result in impact on the social and natural environment.
Changes to noise emission pattern and increased complaints.
Changes in ecosystems and associated risks.
Reduced air quality.
Changes in ecosystems and distributions of wildlife and wildlife attractants.
|
|
x
|
|
The party in charge for construction and Operation and Maintenance (O&M) should have undertaken E&S Studies prepared management plans to mitigate any adverse impacts and risks and consistent with applicable laws.
Reducing the use of electricity by using renewable energy and reducing fuel consumption by using environmentally friendly ground support equipment and transportation.
Sustainable landing and take-off cycle of aircraft(s) and ground support operations, single engine taxiing.
Targeted charges to airlines based on noise measurement. Restrictions on flight operations during night time.
Design and implementation of noise control measures (e.g. noise barriers along the boundaries of the airport such as earthen mounds, walls).
Solid waste management plan.
Integrated vegetation management (IVM).
Wildlife hazard management plan (WHMP), including e.g. bio-acoustic technology.
Facilitate ecosystem-based adaptation.
Use of supplementary cementitious materials (SCM) in concrete runways and use of recycled aggregates in taxiway and apron construction.
Achieve the environmental sustainability of passenger terminals (e.g. Recyclable food packaging, beverage containers and utensils. Composting and/or food procurement practices aimed at minimizing waste. LED and other types of energy-efficient lighting to reduce electricity usage.)
|
|
Risk of noncompliance on the E&S aspect of the concession agreement.
|
|
|
|
x
|
The parties to review compliance of the E&S aspect of the Concession Agreement, during construction and O&M.
|
|
Climate risks *
|
Deterioration of runway surface integrity through softening and aircraft rutting.
Flood risks to airports due to increased precipitation and/or sea level rise.
Lift of aircraft reduced due to higher temperatures.
Temperature change affect navigational signals and satellite coverage.
Electrical power supply failed during strong winds and storms.
Increasing wildlife-strike risks due to changes in the local ecosystem.
Use of airport as shelter or as hub for relief operations.
|
|
x
|
|
Enhanced runway design criteria (e.g. increase height above sea-level of runaway to withstand a 1-in-100 year storm surge event).
Integrate climate resilience in maintenance regimes and runaway surface specifications.
Improve emergency repair procedures.
Upgrade drainage systems.
Installed permeable pavement to drain storm water.
Installation and closure of flood/tidal gates and flood-storage basins within the site.
Ensure access roadways are navigable for employees and emergency vehicles during flood events.
Standards for buildings including climate adaptation.
Integrated adaptation planning into airport master plan.
Electrical substations upgraded.
Increase runaway length.
Develop a Flight Rescheduling Control System (FRCS) to handle the airlines’ rescheduling requests, with a view to quickly resuming normal airport operations once extreme weather has abated.
Thunderstorm Warning System.
|
