Despite their structural differences, alliance contracting, IPD, and PDB share core principles that distinguish them from traditional procurement and that stand in deliberate contrast to the project finance requirements set out in Part 4. These principles are the source of the tensions examined in Part 5.

Shared risk and reward

All collaborative models replace the adversarial allocation of risk, in which the contractor bears a fixed-price obligation and the owner transfers as much risk as possible, with a shared-risk framework. Cost overruns, schedule delays, and performance shortfalls are absorbed collectively, with financial consequences distributed among participants through gain-share and pain-share mechanisms.

Open-book accounting

Participants operate on a fully transparent, open-book basis. All costs are visible to all participants, and decisions about resource allocation, procurement strategy, and risk management are made collectively with full information.

Joint governance

Project decisions are made by a joint management team or alliance board comprising senior representatives of all participants. Decisions are typically made by unanimous agreement, reflecting the principle that no single party's interests should override the collective interest of the project.

"No blame, no dispute" culture

Alliance and IPD contracts typically include clauses under which participants waive their rights to bring legal claims against one another (except for voluntary default). This encourages early disclosure of problems, acceptance of stretch targets, and adoption of innovative but risky approaches.

Best-for-project decision-making

Participants commit to making decisions that are "best for the project" rather than best for their individual commercial interests. This principle is operationalized through the shared risk and reward mechanism, which aligns each participant's financial interest with overall project performance.

Early involvement and collaboration

All collaborative models emphasize the early involvement of the contractor, designer, and key subcontractors in the project development process. This allows for concurrent design and construction planning, value engineering, and buildability review, all of which contribute to better project outcomes.


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  1. Introduction
  2. Why does financing remain necessary under collaborative delivery?
  3. What is bankability? 
  4. What are the collaborative delivery models? 
  5. Core principles of collaborative delivery models 
  6. Core principles of traditional project finance 
  7. The issues between collaborative delivery models and traditional project finance 
  8. Available solutions and potential structuring 
  9. Conclusion