12.1 - Risk analysis

12.1 - Risk analysis

Introduction

Volume 1 of Land Transport NZ’s economic evaluation manual sets out detailed risk analysis guidelines for roading projects. This chapter identifies how the risk analysis guidelines may be applied to other transport infrastructure and transport services projects, in particular passenger transport. The guidance modifies the description of the risk categories in worksheet A13(a) in volume 1, summary of risks, to reflect the particular features of passenger transport projects. Because of the diversity of transport projects, modelling techniques, benefit sources and cost items, this guidance should be adapted to suit the particular project context.

This guidance note should be read together with the risk analysis guidelines contained in volume 1. These specify underlying risk management principles, and provide further guidance on how identified project risks should be evaluated, managed and reported to Land Transport NZ.

Proposals requiring a risk analysis

All evaluations for passenger and freight transport proposals with a present value of the funding gap of greater than $1 million are required to include a detailed risk analysis. Other types of transport proposal with a net cost to government (central plus local) greater than $1 million must also include a risk analysis as part of the evaluation.

Note: Where a project up to $1 million warrants it, Land Transport NZ may also request a risk analysis.