Abstract
The formation of the Public-Private Partnership (PPP) contracts is based on the grounds that the construction, progress, operation, and investment of a project must be allocated to a private organization under a contract. The risks associated with PPP projects are usually associated with resource improvement and development as well as the long-term operation of the project. It is known that cost and time overruns are among the obvious risks faced by a project during the development phase. Cost and time overruns are major sources of monetary risk. The risk and its impact may vary at different phases during the life cycle of a PPP project. In traditional procurement, all of the monetary risks are covered by the public sector. Most of the projects delivered under traditional procurement involve a price confirmation to indicate standard cost risks. This paper aims to investigate the impact of endogenous factors on budget overrun in PPP projects in Saudi Arabia. The paper briefly illustrates the content regarding the PPP risk evaluating systems and explains the association between risk occurrences and cost overrun in the Kingdom of Saudi Arabia (KSA). The paper concludes with recommendations for future research.
Highlights
IntroductionMega construction projects need huge financial and human resources
Developing countries usually prioritize investing in construction development
These results indicate that there is an effect of almost all endogenous risk factors since their p-values are below 0.05
Summary
Mega construction projects need huge financial and human resources. The public and the private sector are concerned about the pricing risks associated with PPP projects. Many projects depicted cost and time overruns and project failure leading to unexpected results. The main challenges faced by organization managers involve dealing with the uncertainty and the intricacy of PPP projects and inaccurate cost incorporation during the decision-making phase. The shortcomings of the management in terms of their processes and functionality are evident from the complexity associated with projects which indicate the failure of managers to handle the vital characteristics of major projects. The understanding of managers concerning the emergent characteristics is determined by their perceptions leading to loss of insight [3]
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