Risk allocation in BOT transportation projects in Vietnam from different viewpoints

Abstract

The Built Operate Transfer (BOT) method has been used popularly to invest into infrastructure system in Vietnam, especially in transportation sector. This investment method has been confronted with a high level of risks due to the complexity of stakeholders' involvements and a lengthy concession period. However, risk management application in these projects is still inadequate. This study aims at finding out what is the most suitable risk allocation mechanism and investigating the differences in the perception between public and private sector regarding risk allocation in BOT transportation projects in Vietnam. A mixed-method was adopted including interviews and a questionnaire survey to collected relevant data which then were analyzed through descriptive and inferential statistical analysis. The result of descriptive statistical analysis showed that from the viewpoint of both sectors, only one risk namely "changes in government policies" was suggested to be allocated to public sector while the number of risks supposed to allocate to private sector was twelve. Meanwhile, a majority of risks (27 risks) were suggested to be shared between public and private sector. Moreover, inferential statistical analysis indicated that there is no statistical significant difference in the perception of public and private sector in terms of risk allocation, except the risk of "poor decision-making process". As a result, a risk allocation recommendation in BOT transportation projects was established as an outcome of the research, which contributes to assist authorities in order to provide suitable laws and policies related to these projects. Also, the research results appear to be useful in contributing to the body of knowledge related to PPP procurement.