The term "public-private partnership" was first instigated in the U.S., originally concerning to joint funding for educational programmes by public and private sectors, and then in the 50s to denote to analogous funding for utilities, but used in wide context in the 60s to denote to public and private sector joint ventures for urban renewal works. However, the subject of this study is called "project-based" or "contract based" PPPs, a more fresh development. PPPs can be in general be defined as a long-term contract between private and public sectors for providing public infrastructure and public facilities to the people. Risk in any project refers to the unplanned activity which results in an unexpected outcome. These outcomes may have detrimental effects on the performance of the project (e.g. slow progress), completion of the project (e.g. delay in completion) or on the stake holders involved in the project (e.g. loss in revenue).Due to such adverse effects risks in every project is considered very crucial and needs to be managed properly to avoid detrimental effects of risk. In order to manage the risk identification and allocation of the risk is very important. This study is conducted to identify various risk parameters involved in a PPP project and manage them for better. in this study a critical review has been done on the risk identification and allocation practices.