5.1. Tariff-setting uncertainty
Tariff-setting is a volatile and sensitive issue. Despite tariff risk falling under the control of the government, the respondents see it not necessarily resting with the government. There exists a low level of agreement between the two groups of respondents, with the regulators believing that this risk needs to be transferred to the private operators, while their counterparts argue that it must be a government’s responsibility. However, it would seem that if the government insists on transferring this risk, the operators will almost likely charge a much higher risk premium than necessary; without such increases, they will be reluctant to participate in the project. This problem warrants a prompt action and quick resolution by the government. Delay will inevitably result in increased uncertainty and the continued negative impact on investors’ confidence.