Abstract
The success of Public Private Partnership (PPP) for water supply investment is inseparable from the capability of risk management of the parties within the project. This study investigates the risk management capability of Indonesian local public sector organizations that are potentially involved in PPP schemes for water supply. A risk management maturity model based assessment tool probing the culture, process, experience, application and partnership aspects is used in the survey. The model describes risk management capability in four levels (ad-hoc, initial, competent, excellent). The survey shows that their risk management capability is still in-average at the initial stage (level 2), meaning that the adopted risk management postures are mostly supported only by unstructured, ad-hoc and non-formal processes. The result of this study can help decision makers in choosing appropriate risk management methods and tools to be used by the local public authorities for managing risks in PPP schemes.
Highlights
The Government of Indonesia (GoI) currently seeks to involve private sector in water supply infrastructure investment, through Public Private Partnership (PPP) scheme
This study investigates the capability of risk management of the public authority bodies related to PPP scheme development in infrastructure provision in Indonesia, taking water supply infrastructure as the case study
It has been introduced previously that risk management plays a substantial role in a PPP project management over the life of the long-term contract
Summary
The Government of Indonesia (GoI) currently seeks to involve private sector in water supply infrastructure investment, through Public Private Partnership (PPP) scheme. PPP is seen as an option to overcome the gaps in investment, technology and expertise. By involving the private sector, it is expected that the operational efficiency of water supply utilities can be improved [1]. International practices show that water supply infrastructure PPP projects, mostly dominated by concession scheme, are risky in terms of business, due to the uniqueness of its investment mode. Investment in water supply infrastructure requires large initial capital cost. The majority of its assets are underground, difficult to assess in order to ensure its proper valuation. The majority of its assets are underground, difficult to assess in order to ensure its proper valuation. [2]
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
