Voelker, C; Permana, A; Sachs, T and Tiong, R (2008) Political risk perception in Indonesian power projects. Journal of Financial Management of Property and Construction, 13(1), pp. 18-34. ISSN 1366-4387
Abstract
Purpose The purpose of this study is to identify and to assess specific political risks associated with Indonesia's public private partnership (PPP) power projects and their generally available mitigating measures, based on the perception of the main stakeholders (government, investors, lenders and insurers). Design/methodology/approach The approach taken is: a comprehensive literature review to identify an initial list of specific political risks associated with Indonesia's PPP power projects and generally available mitigating measures for these risks; unstructured interviews and discussions to gather recent issues related to the study and to filter the risks and project measures identified at previous step; and finally a survey conducted with questionnaires in order to evaluate the risks and their allocation, to suggest corresponding mitigating measures. Findings The study identified that the political risk perception for Indonesian power projects is still relatively high, due to its legal and regulatory risk and breach of contract risk. Viable government support is also desired by most of the players instead of having political risk insurance as the risk mitigation strategy. Originality/value The study has identified a political risk mitigation strategy for infrastructure investment in the Indonesian power sector. Based on that, this study contributes as a scientific exercise in measuring the political risks perception of all stakeholders, which can be useful for all involved parties to mitigate this type of risk successfully.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | Indonesia; partnership; risk management |
| Index terms: | survey, risk perception, literature review, strategy, breach of contract, interview, risk mitigation, questionnaire, methodology, infrastructure investment, partnership, exercise, investor, Indonesia, government support, public private partnership, mitigating measure, risk management, insurance |
| Subjects: | data collection methods, risk assessment, government bodies, health behaviours and lifestyles, dispute resolution, data analysis and analytics, contractual arrangements, economic analysis, management, research methods, Geography, financial risk, partnership management, sociology, environmental hazards |
| Topics: | Risk Management, Stakeholder Management, Sustainability, Governance, Procurement, Health and Safety, Cost Management, Business Strategy, Research Practice, Geographical Context, Legal Issues |
| Descriptive scope: | 5 PCTEA |
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