Financial Risks Mitigation for Greenfield Infrastructure Contracts

Abstract

The Developing economies across the World witness huge Government spending on Infrastructure in order to boost their economy. Mainly these are Greenfield Projects (the projects/investments which are started from scratch level) and require a lot of Financial Planning at pre and post Contract Award level. This research paper identifies and proposes mitigation measures against the Financial Risks involved in Greenfield Infrastructure Contracts namely: 1) Financial Risks due to locked-up bank guarantees, 2) Financial Risks due to prolongation costs in case the works got suspended, 3) Financial Risks due to price escalation, 4) Financial Risks due to de-scoping of major part of the Works, 5) Financial Risks on account of delayed Payments and 6) Financial Risks due to delays and penalties.