CRITICAL RISK ANALYSIS OF TOLL ROAD PUBLIC-PRIVATE PARTNERSHIP (PPP) PROJECT CONSTRUCTION PHASE

Abstract

Limited funding in meeting the financing needs for the provision of toll road infrastructure makes the government need to look for alternative financing so that the project can still be carried out. Public Private Partnership (PPP) is an alternative option to overcome this problem. However, infrastructure projects with PPP schemes require large investments and a relatively long concession period, thus allowing risk uncertainty to arise as a result of decisions made during the project. Risk identification in a construction project is important at the beginning of the project. This study was aimed at identifying critical risks, determining risk allocation and risk mitigation strategies, and analyzing the interrelationship between critical risks. The case study was conducted on the Trans Sumatra toll road project in South Sumatra. Quantitative data (questionnaire survey) and qualitative data (interview) were collected from the toll-road private sector. The results of the study identified five critical risks in the construction phase (CP) of the toll road project along with the allocation of risks, namely the risks of geographical conditions (shared), delays in work progress (private sector), design errors (private sector), force majeure (shared) and weather conditions (shared). The mitigation strategy for the risks of geographical conditions and design errors was to redesign the construction structure by adjusting with the land conditions of the toll road. Force majeure (Covid-19) causing delays in work progress required rescheduling and recalculation of construction costs. Weather conditions (heavy rain) occurring on swampy land caused puddles/floods; this condition caused delays in construction work. The mitigation strategy that could be carried out was by coordinating with the Indonesian Meteorology, Climatology, and Geophysics Agency (BMKG) in the region and preparing disaster management Standard Operating Procedures (SOPs). The cause and effect of each risk showed that the critical risks in the construction phase of the toll road project were interrelated to each other which the risks would finally contribute to the increase in the construction costs of the toll road project.