Identification of critical risk factors in public-private partnership project phases in developing countries

Abstract

Purpose Public‐private partnerships (PPPs) are being faced by risk threats, notwithstanding the fact that the PPP model has been structured in a way that the associated risks are shared by both the public and private sectors. Consequently, the sources of risk change over the PPP project phases. Thus, the purpose of this paper is to identify and assess the risk factors in PPP infrastructure project phases comprising development phase, construction phase, operation phase and project life cycle through an empirical approach. Design/methodology/approach The study adopted four different data-gathering approaches including literature review, desk review, brainstorming session and questionnaire survey. In order to capture a broad perception of stakeholders, the questionnaires were administered to three different stakeholder organizations to include public sector authorities (i.e. ministries, department and agencies), concessionaires and lenders/banks involved in different PPP infrastructure projects implementation in Nigeria. A total of 81 questionnaires were administered, out of which 63 were retrieved but after checking through the completed questionnaires, 60 questionnaires were found suitable for the analysis. Data collected were analyzed using descriptive statistics, mean score, Kruskal–Wallis test and the risk significance index in terms of severity and likelihood of occurrence conducted. Findings In total, 70 risk factors were identified with respect to PPP project phases and their relative importance was gauged. In addition, the analysis of total 70 risk factors in the development phase, construction phase, operation phase and project life cycle phase indicated that 51 risk factors are located in the yellow zone, which is considered as moderate and 19 risk factors are located in the red zone that are regarded as critical. Practical implications The identification of specific critical risk factors in each PPP project phase will provide a benchmark in developing risk management programs in developing countries. Originality/value These study findings would be useful for PPP stakeholders to focus their attention, priorities and leadership in managing these critical risk factors. Furthermore, the findings of this study are significant in providing an in-depth understanding of the current Nigeria’s PPP market environment, which is a true reflection of developing countries as a whole.

An investigation into the sustainability practices in PPP infrastructure projects: a case of Nigeria

“…It is obvious that efforts at examining sustainability practices in PPP infrastructure projects have received limited attention. In Nigeria important earlier studies on PPP projects (see Ibrahim et al, 2006;Babatunde et al, 2012;Babatunde et al, 2015;Babatunde et al, 2016a;Babatunde et al, 2016b;Babatunde and Perera, 2017a;Babatunde and Perera, 2017b;Babatunde et al, 2019;Opawole and Jagboro, 2017) have paid attention to PPP's risk factors, critical success factors, barriers to implementation, and performance indicators S m a r t a…”

Exploring the underlying relationship among risks in BOT transportation projects in developing countries: the case of Vietnam

“…Although some risk group names have been found in the literature, the latent structure of risk in this study is different from the classifications in previous studies. While previous studies mainly grouped risks based on risks’ sources (Heravi and Hajihosseini, 2011; Suseno et al , 2015; Gupta et al , 2013) or project lifecycle phases (Babatunde et al , 2018; Li and Zou, 2011; Likhitruangsilp et al , 2017; Thomas et al , 2003; Carbonara et al , 2015), in this study the latent risk structure was established by the underlying correlations among risks from practical viewpoints where latent factors, including their principal components, were found and interpreted. This classification provides more insight into the risk structure in BOT transportation projects that assist BOT practitioners in their management.…”

“…These two steps are very important as a risk inventory and a risk structure needs to be accurately built up prior to commencing any other phases of the risk management process. The literature shows that previous studies followed two main ways to classify risks in PPPs which are either according to the source where risks come from Heravi and Hajihosseini (2011), Suseno et al (2015), Gupta et al (2013) or according to the stage of projects’ lifecycle where risks may occur (Babatunde et al , 2018; Li and Zou, 2011; Likhitruangsilp et al , 2017; Thomas et al , 2003; Carbonara et al , 2015). There are several studies, which combined the two ways to establish the structure of risks.…”

Analysis of Features Affecting Contracted Rate of Return of Korean PPP Projects

“…This increase in cost is because of external factors rather than mismanagement or inefficiency of the private investors in delivering the projects; thus, the government shares the risk. For developing countries, land acquisition/site availability along with creditworthiness of the project sponsors and availability of finances is more critical than other risk factors [47]. The government supports private investors financially through interest-free and/or low-interest loans, subordinated loans, operational subsidies, management and repair, and interest subsidies, in addition to direct subsidies.…”