Criticality analysis of financial risks of public-private partnership projects in a Sub-Saharan African country

Abstract

Integrating sustainable and complex financial performance models into Public-Private Partnership (PPP) project management is a challenging task due to the sheer number of inherent financial risks. Financial risk is a key impediment in the development of public infrastructure projects in Ghana. Studies on PPP projects in the country have concentrated on critical success factors and stakeholder management with little in-depth assessment of financial risks. This study develops and analyses the key financial risks of PPP infrastructure projects in Ghana. The research methodology is set as follows. First, the identification of twenty-eight financial risks in institutional and project reports, and peer-reviewed articles. Second, collection of primary data via surveys from 126 PPP experts (academics, risk managers and project managers). Third, the development and testing of a novel quantitative model on the criticality of financial risks of PPP projects. The findings show high interest charges, excessive operating expenses, and huge construction material costs as some of the critical financial risks that must be tackled immediately in the country. The outcomes of this study broaden the understanding of financial risks of PPP projects, and it sets the stage for further research.

Policy Perspective on Governmental Implicit Debt Risks of Urban Rail Transit PPP Projects in China: A Grounded Theory Approach

“…Notably, scholars like Nayyar [17] and Kosycarz et al [18] have conducted studies examining the feasibility and promotion of PPP models in various regions, intending to advance infrastructure PPP projects. Additionally, numerous scholars have researched decision-making aspects related to PPP projects, primarily focusing on matters such as the selection of concessionaires [17], the duration of concessions [19], and decision-making in the signing and negotiation of the concession contract [19]. Furthermore, previous researchers have employed case study methodologies to identify the factors that contribute to the success of public-private partnership (PPP) projects, which is demonstrated by recent studies [20][21][22][23].…”

“…Risk identification is the primary task of risk management of PPP projects, which is the process of judging, confirming, and summarizing the potential risk factors faced by the target project. There are many studies on risk identification of PPP projects, both domestically and internationally, covering the risks of various aspects and stages of PPP projects [19,[24][25][26][27]. Lai et al summarized the current status of risk identification, risk assessment, and risk early warning research of PPP infrastructure projects in order to construct a theoretical framework for risk analysis and early warning of PPP projects in characteristic towns, which might benefit future research [28].…”