Article Title

The Contractor's View


Martin Heubel


I would like to summarize five key areas of risk the government donor of the concession, financial institutions, or other types of project sponsors are exposed to and the contractors involved, which means the groups who are designing, delivering, and putting into operation those plants and installations for periods generally expected to be twenty, thirty, or thirty-five years. These five risk categories are: first, that the project has to be completed in time, within budget, and has to be kept in operation; second, that the project must generate the cash flow required for the debt service and the return on investment on the equity put in by the sponsors; third, the currency fluctuation; fourth, the erosion affecting the political environment; fifth, the general economic conditions that nobody really has control over.