Fuzzy Analytic Network Process Approach to Risk Assessment of Public-Private Partnership (PPP) Highway Projects in Developing Countries

Abstract

Risk assessment is the most significant factors in risk management. Earlier researches have shown that risk assessment is essential to achieve success in Public-Private Partnership (PPP) projects. The occurrence of different risk can worsen the effects of each other such as the impact of Political risks on Economic risks. Although appointed methods such as Analytic Hierarchy Process (AHP), Fuzzy Synthetic, Interrelated Tree and Fuzzy AHP methods are commonly used in the industry sectors, but these approaches seem powerless for evaluation of the interactions between these risks. The results have shown that exact assessment of the severity of risks cannot be exactly determined. This paper aims to assess the significant risks in the Tehran-Chalous highway by using a Fuzzy Analytic Network Process (FANP) method. FANP approach is used to overcome the problems of interdependence and feedback between various risk ranking alternatives for simulation of the imprecision of man’s judgment. The approach is exploiting data that are composed through a questionnaire dispensed to PPP highway project experts. In this paper, the effects of risks on highway project aims such as cost, quality and time are assessed. The results show that financial, legal and political risks have significant risks in PPP highway projects. Based on this initial study, FANP is found feasible in analysing the feedback and interdependence between risks.