Last updated on 07/19/2018
AlMisnad, A., de Neufville, R., & Garcia, M. (2017). Risk Distribution and the Adoption of Flexibility: Desalination Expansion in Qatar. In Water Diplomacy in Action: Contingent Approaches to Managing Complex Water Problems (1st ed., Vol. Anthem Water Diplomacy Series, pp. 229-252) . Anthem Press.
This chapter argues that, to achieve the expected outcomes, designers and negotiators need to jointly consider both the physical and contractual arrangements of a project. The reasoning is:
(1) The future outcomes of any project are uncertain because of inescapable changes in needs, supplies, costs, and technologies.
(2) Contractual arrangements inevitably allocate these outcomes differentially between water suppliers and end users—largely, but not only, because their costs and benefits occur unevenly over time.
(3) Designers will shape the project in response to the risks associated with the contracts, which may not be best from the overall societal perspective.