Abstract
In a situation of growing water demand, inadequate public funding, poor asset condition and lack of maintenance in developing countries, public-private partnerships (PPPs) play an important role in the development of infrastructure, such as water supply and sewerage services. The purpose of this study is to develop a quantitative approach to appropriate risk allocation, with attention directed to the impact of positive and negative factors in water and sewerage projects. The paper presents a hybrid SWARA-COPRAS approach to examine risk allocation, particularly for PPP water supply and sewerage projects in the context of Malaysia. In addition to PPP infrastructure projects, the approach has the potential to be adapted to other applications. The proposed method enables decision makers to utilise qualitative linguistic terms in the allocation of risk between the public and private sector, and to select the best strategy for risk allocation in a contract. Finally, 24 significant risks were identified: six risks would preferably be allocated to the public sector, while seven risks would be assigned to the private sector, and eleven risks would preferably be shared by both parties. The finding from this study can help the government of Malaysia to determine an attractive political strategy for private investors to support a PPP water and sewerage infrastructure project.
Highlights
The provision of quality and efficient water and sewerage services is essential in ensuring rapid urbanisation and economic development
The findings revealed that completion risk, inflation and price change risk have a higher impact on Chinese water private partnerships (PPPs) projects; whereas government corruption, an imperfect legal and supervisory system, and changes in market demand have a lower impact on the water supply sector
Appropriate risk allocation between the public and private sector is a vital factor in achieving success in the implementation of public-private partnership (PPP) projects
Summary
The provision of quality and efficient water and sewerage services is essential in ensuring rapid urbanisation and economic development. It is necessary to broadly consider the criteria and barriers of risk allocation to achieve appropriate risk allocation (Valipour, Mohammadi, Yahaya, Sarvari, & Noor, 2014; Grasso & Soldo, 2017) It is essential for public and private sector parties to apply efficient risk allocation approaches in PPP projects to experience a more effective process of agreement arbitration and to reduce the occurrence of disputes during the concession period (Alireza, Mohammadreza, Zin, Yahaya, & Noor, 2013). Little is known about how to determine the party responsible for ensuring optimal risk management considering the criteria and the barriers of risk allocation It is vital for the private and public sector to understand the various risks related to water supply and sewerage PPPs through the entire life cycle of infrastructure projects, the significance of risks, and the best way to allocate risks to ensure the long-term success of such partnerships. The results of this study provide insights into the development and performance improvement of water supply and sewerage PPP projects, especially in Malaysia
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