Zou, P X W; Wang, S and Fang, D (2008) A life-cycle risk management framework for PPP infrastructure projects. Journal of Financial Management of Property and Construction, 13(2), pp. 123-142. ISSN 1366-4387
Abstract
Purpose The purpose of this paper is to develop a life cycle risk management framework for public private partnership (PPP) infrastructure projects that lead to the realization of value for money and balance of interests between different partners including the public and end users. Design/methodology/approach This paper draws on extensive theoretical research and literature reviews, coupled with case study methodologies. A comprehensive review of current literature in the field was first carried out. Then three PPP infrastructure projects, two from Australia and one from China, are studied to scrutinize reasons leading to their dilemma and articulate the valuable lessons learnt in relation to risk analysis and mitigation. Findings The paper found that properly assessing risks (financial, government's political and public's acceptance/rejection risks), ensuring value for money and protecting the public (and end users') interests are essential in PPP infrastructure projects and this can only be achieved through optimal risk identification, assessment, allocation and management from a life cycle perspective and balanced interests between the Government/public and private partners as well as product end users. Research limitations/implications The paper was limited to proposing the framework; therefore the next step should be testing the framework. Practical implications The framework proposed in this paper should be practical and useful for professionals in managing the risks associated with the procurement of PPP infrastructure projects. Originality/value The PPP method has been increasingly used to procure large-scale infrastructures such as freeways, railways, tunnels and bridges worldwide. While there have been many successful PPP projects, unsuccessful cases abound and studying them can help people better manage the risks in future PPP infrastructure projects. To ensure the success of PPP infrastructure projects, it is important for all partners to manage the risks from a project life cycle perspective, in which risks are identified and assessed in the earliest possible project stage and are allocated to the parties who are in the best position to control them. Furthermore, it is also important to continuous monitor the risks and develop proactive risk respond strategies throughout the project life cycle. To this end, this paper provides a life-cycle risk management framework for PPP infrastructure projects.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | Australia; China; partnership; private sector organizations; public sector organizations; risk management |
| Index terms: | life cycle, infrastructure project, partnership, end user, public private partnership, testing, value-for-money, risk identification, risk management, strategy, China, risk analysis, private sector organization, literature review, mitigation, public sector organization, methodology, Australia, tunnel, case study |
| Subjects: | organization, infrastructure and transport systems, data collection methods, financial risk, contractual arrangements, management, evaluation, risk assessment, environmental hazards, partnership management, research methods, Geography, administrative law, professional practice, stakeholder, value management, data analysis and analytics |
| Topics: | Risk Management, Sustainability, Stakeholder Management, Procurement, Engineering Principles, Value Management, Project Management, Legal Issues, Research Practice, Business Strategy, Roles and Professions, Cost Management, Geographical Context |
| Descriptive scope: | 5 PCTEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here