Abstract
Public–private partnerships (PPPs) are a useful approach that allows the public sector to collaborate with private investors in financing, implementing, and operating public sector facilities. Over the past few decades, the occurrence of social risks and the vulnerability of PPP projects to these risks have caused numerous project failures. While practitioners claim to manage the social risks of PPP projects, little effort has been made to explore the proper ways of doing this. In this study, we present a social risk tolerance (SRT) concept and propose a model to quantify the tolerance of PPP projects to social risks. One hundred and twenty-three PPP projects were collected from China for model validation. The results indicate a positive relationship between SRT values and project size and that the SRT has diminishing marginal values. This paper presents a new concept in PPP research and provides an appropriate approach for managing the social risks of PPP projects. The research findings can help both the public and private sectors understand the social risks associated with PPP projects and determine effective countermeasures to control these risks.
Highlights
This study aims to present a concept of social risk tolerance (SRT) for PPP projects and proposes a model to quantify the ability of PPP projects to withstand social risks
PPP projects in the public and private sectors are agement, suggesting that stakeholders ought to strike the trade-off between risk a sensitive to social risks, and the expectation is that PPP projects are developed in a socially ward and should anestablishing integratedanrisk management often
The contradiction between the public welfare of PPP projects and the profit pursuits of social capital is often transformed into social risks
Summary
Public–private partnerships (PPPs) originated in western countries [1] and have been applied worldwide to procure infrastructure facilities and public services. Evidence has demonstrated that PPPs have multidimensional advantages, including mobilizing social capital, relieving financial burdens on the government, improving project delivery efficiency, and generating social welfare programs [2,3]. According to statistical data from the World Bank [3], global private investment in PPP-related infrastructure projects had amounted to USD 1788 billion by 2018. The United Kingdom, Canada, and Australia have established public procurement departments to deal with the enormous demand for PPPs. In China, there are 14,220 projects included in the national PPP project management database, with a total investment of USD 2.75 trillion that involve 19 industries, including transportation and municipal administration
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