Effects of project governance structures on the management of risks in major infrastructure projects: A comparative analysis

Abstract

Large infrastructure construction projects are prone to risks. Using desktop review and interviews with stakeholder organizations in two major infrastructure projects (the Yi-wan Railway Construction Project in China and the Northern Gateway Toll Road (NGTR) Project in New Zealand), this study investigated how different project governance structures affect the management of risks. Comparative analysis shows that project governance provides a structured mechanism to identify and address risks as they occur. Despite varied context, two projects relied upon flexible contractual arrangements to leverage risks among project participants. While a centralized, single-agent governance was adopted in the form of Project Management Headquarters (PMH) in Yi-wan Railway project, an alliance governance structure was used in the NGTR project. The former enabled top-down risk allocation whereas the latter encouraged proactive solutions to risk sharing. The research outcomes will inform the decision making among project stakeholders on establishing appropriate project governance arrangements in order to achieve target risk management outcome. By comparing real-time projects of varied scope, complexity and significance, the findings contribute to an improved understanding of the relationship between project organizations and project risk management.