Risk Allocation in Infrastructure Projects

On May 29, 2023, Shant Boyajian presented “Risk Allocation in Infrastructure Projects” as part of Cornell Program in Infrastructure Policy’s (CPIP) Thought Leaders in Infrastructure video series. During this presentation, he explained how infrastructure owners and contractors are developing new vehicles to share risks and that it is ideally best to identify risks at the outset of an infrastructure project. Shant acknowledged that some risks are unquantifiable or unknown, such as the remediation of hazardous waste on a construction site, and advised on setting aside allowances above and beyond the agreed upon project price. In his presentation, Shant also discussed risk-sharing regimes being used to allocate changes in credit spreads or benchmark interest rates.