Some of the notable risks that need to be reckoned are risks arising during the period of construction leading to time and cost over-runs, operational risks, market risks, interest rate risks, foreign exchange risks, payment risks, regulatory risks and political risks.
At times, in the absence of proper risk mitigation mechanism, the costs of the projects tend to increase and such high level of risks cannot be traded off against high returns. The aim of the policy makers should be to reduce perceived risks by introducing greater policy clarity and, at the same time, providing an environment that will reassure investors.