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<br />']o/(du' Ross [..Cn <br /> <br />VII. PROJECT RISKS AND OPPORTUNITIES <br /> <br />PROJECT RISKS <br /> <br />1 Of the following risk areas, the political risk has the <br />greatest potential for adversely impacting project implementation <br />and operating viability. <br /> <br />Political Risk <br /> <br />· Public sentiment against waste disposal facilities may <br />preclude any plans to build a waste-to-energy facility in <br />New Brighton <br /> <br />Operating Revenues and Costs <br /> <br />· Alternative fuel prices may not escalate as rapidly as <br />projected which would result in market-constrained revenues <br />from steam sales that are lower than those projected. <br /> <br />· Projected-inflation rates may be greater than those <br />actually realized, thus overstating revenues. <br /> <br />I <br /> <br />· Steam sales (both unit and price) may not reflect actual <br />sales to be negotiated with potential customers. <br /> <br />- <br /> <br />. MSW may not be available on a consistent basis, causing <br />operational bottlenecks and increased steam p~oduction <br />costs. <br /> <br />· The projected operating expense rate of increase could be <br />lower than will actually be experienced thus understating <br />operating costs. <br /> <br />Capi tal Costs <br /> <br />· Tighter pollution control requirements could increase <br />capital costs. Areas of exposure are not limited to, but <br />include: <br /> <br />Transportation of MSW through residential areas <br />Combustion of MSW at the facility <br />Ash disposal <br /> <br />I <br /> <br />· Actual construction may take longer than projected, <br />resulting in greater capitalized interest. <br /> <br />- 22 - <br />