Approaches to Risk Identification in Public–Private Partnership Projects: Malaysian Private Partners’ Overview

Hadi Sarvari,Nordin Yahya,Nerija Banaitiene,Alireza Valipour,Norhazilan Md Noor,Michael Beer

doi:10.3390/admsci9010017

Abstract

The complexity of public–private partnership (PPP) projects ensures that risks could emerge and spread in unpredictable ways if they are not well identified and managed. The emergence of PPP projects has brought major changes in the construction industry, the most notable being in procurement methods influencing risk allocation to private parties. Thus, it is crucial to have an effective risk management for public and private partners to eliminate or minimise risks. Formulating an effective risk management system is a crucial challenge faced by both of parties in order to minimise or optimise risks. The aim of this study was to investigate the process of risk identification of private partners in Malaysian PPP projects. Data were collected throughout a 2-month period using a survey with a sample of nine Malaysian companies engaged in PPP projects, and the survey results were analysed using mean scores. The findings indicate that due to a lack of knowledge and experience of Malaysian private partners in the risk identification process, a comprehensive database for risk identification is highly necessary for the private sector. Another issue emerging from the findings is that it may be reasonable to use a combination of risk identiﬁcation tools for PPP projects with a high level of complexity. The findings of the present study can greatly assist public and private partners to select the most appropriate tools for risk identification at the early stages of PPP projects.

Highlights

IntroductionPublic–private partnership (PPP) in developing countries has become increasingly popular as a way of involving the private sector in the development of public infrastructures (Javed et al 2013)
The selection of the panel list and survey question formulations play a significant role in determining the reliability of the research; experience and knowledge in PPP projects are the most important criteria in deciding the credibility of the study
One of the issues emerging from the findings is that internal barriers were more important than external factors in limiting the implementation of risk management

Summary

Introduction

Public–private partnership (PPP) in developing countries has become increasingly popular as a way of involving the private sector in the development of public infrastructures (Javed et al 2013). The special characteristics of PPP are competitive bidding processes, private sector innovation and expertise, and risk sharing between public and private sectors (Adams et al 2006; Cheung and Chan 2011). A PPP project has a higher risk profile compared with. 2019, 9, 17 traditional delivery because of long lead time, high capital expenditures, and long-lived assets with little value in alternative uses (Xu et al 2014; Chan et al 2015). The problems and challenges of the construction industry, in PPP projects, are more complex and fundamental in developing countries compared to developed countries (Hlaing et al 2008)

Objectives

Methods

Results

Conclusion