In the example, the risk involved in the MRT service delivery has been
transferred to the private sector provider. So what is there left to the
government? The answer is the government still retains and needs to
manage the risk of possible faults in design and implementation of the
procurement programme that is to select the private provider, faults which
may have an impact on or beyond the MRT project. Suppose, for example,
the contracted provider chooses a signalling and train control system based
on an innovative technology, the provider consortium lucrative savings in,
say, rolling stock cost. However, the new system repeatedly fails to obtain
the mandatory safety approval. Eventually, the provider has to revert to a
tried and tested technology, the whole project having incurred considerable
time lost and additional design and other expenses. The impact on the
government is delay in the service opening and opportunity cost of the
benefits forgone2
. The procurement risk register needs to identify and
evaluate the impact of this and similar risk events to ensure they are
managed.