Contract Risk Analysis in Transportation Infrastructure Projects Based on Public-Private Partnership (PPP) Method

Document Type : Original Article

Authors

1 Department of Civil Engineering, Rudehen Branch, Islamic Azad University, Rudehen, Iran

2 Faculty of Architecture and Urban Planning, University of Art, Tehran, Iran

3 School of Architecture, Design and the Built Environment, Nottingham Trent University

Abstract

The present paper aimed to assess a comprehensive risk analysis in public-private partnership (PPP) infrastructure projects using library studies and surveys in transportation infrastructure projects. By separating risks through Delphi technique based on expert opinions, 42 structural risks and 41 operational risks in 12 main areas including political, economic, laws (regulations), cultural (social), environmental (natural), preparation (development), investment, Design, construction (completion), operation, revenue (market), management (organizational) were identified. Then, using a questionnaire survey and data analysis in SPSS, screening and determining the preferred risks based on statistical tests including Kolmogorov-Smirnov (K-S) tests, Kendall ranking and factor analysis were performed. Based on the results, 36 risks with lower Kendall mean were eliminated and the remaining 47 risks were analyzed. Also, by factor analysis, the main components affecting the incidence of risk in these projects were identified according to the factor load of the main variables (12 areas of risk). The results of KMO index and Bartlett sphericity test showed that there is a significant relationship and strong correlation between the variables. The five latent factors, including government, financing, operational, social and organizational risks with specific values ​​greater than 1.0, were able to explain 69.817% of the variances. Critical risks were identified by developing an integrated assessment approach based on the Relative Significance Index (RII) and the occurrence-effect intensity (PI) matrix. According to the results, the risks of "interruption of payments by the government", "termination of the contract by the government and cancellation of the contract" and "corruption of the government system in the process of concluding the contract" with a PI of 0.2166, 0.2161 and 0.2003, respectively are among the critical risks were identified.

Keywords

Main Subjects


[1] Li, B., Akintoye, A., & Hardcastle, C. (2001). “Risk Analysis and Allocation in Public Private Partnership Projects”, 17th Annual ARCOM Conference, 1, 895-904.
[2] Ke, Y., Wang, S., Chan, A. P., & Lam, P. T. (2010). “Preferred Risk Allocation in China’s Public Private Partnership (PPP) Projects”, International Journal of Project Management, 28(5), 482-492.
[3] Heybati, F., Rahnama Roud Poshti, F., Nikoumaram, H., & Ahmadi, M. (2009). “Relationship Between Economic Freedom And Public-Private Partnerships And Developing A Model For Iran”, Economic Modeling, 2(6), 25-52.
[4] Ameyaw, E. E., & Chan, A. P. (2015). “Evaluation and ranking of risk factors in public–private partnership Water supply projects in developing countries using fuzzy synthetic Evaluation approach”, Expert Systems with Applications, 42(12), 5102-5116.
[5] Abolfathi, F., Hasheminejad, S. M., & Ebrahimi, S. B. (2013). “Financing methods in intra-city rail transportation”, 6th Conference on Financial System Development in Iran, Tehran, Finance and Capital Group Establishment of Sharif University of Technology Study Center.
[6] Xu, Y., Sun, C., Skibniewski, M. J., Chan, A.P., Yeung, J. F., & Cheng, H. (2012). “System Dynamics (SD) -based concession pricing model for PPP highway projects”, International Journal of Project Management, 30(2), 240–251.
[7] Agyemang, P. (2011). Effectiveness of Public Private Partnership in infrastructure projects. The university of Texas at Arlington, ProQuest LLC, UMI Number: 1493621.
[8] Ibrahim, A. D., Price, A. D. F., & Dainty, A. R. J. (2006). “The analysis and allocation of risks in public private partnerships in infrastructure projects in Nigeria”, Journal of Financial Management of Property and Construction, 11(3), 149-163.
[9] Demirag, I., Khadaroo, I., Stapleton, P., & Stevenson, C. (2012). “The diffusion of risks in public private partnership contracts”, Accounting, Auditing & Accountability Journal, 25(8), 1317–1339.
[10] Ke, Y., Wang, S., Chan, A. P., & Lam, P.T. (2010). “Preferred risk allocation in China's public-private partnership (PPP) projects”, International Journal of Project Management, 28(5), 482–492.
[11] Tian, Y., Pu, Y., & Cai, B. (2013). “Ventures of highway BOT projects based on the combination of fuzzy theory and AHP”, ICTE 2013: proceedings of the 4th International Conference on Transportation Engineering, 1383–1387.
[12] Li, J., & Zou, P. X. (2011). “Fuzzy AHP-Based Risk Assessment Methodology for PPP Projects”, Journal of Construction Engineering and Management, 137(12), 1205-1209.
[13] Sastoque, L. M., Arboleda, C. A., & Ponz, J. L. (2016). “A Proposal for risk Allocation in social infrastructure projects applying PPP in Colombia”, Procedia Engineering, 145, 1354-1361.
[14] Wu, Y., Xu, C., Li, L., Wang, Y., Chen, K., & Xu, R. (2018). “A risk assessment framework of PPP waste-to-energy incineration projects in China under 2-dimension linguistic environment”, Journal of Cleaner Production, 183(10), 602-617.
[15] Cui, C., Liu, Y., Hope, A., & Wang, J. (2018). “Review of studies on the public–private partnerships (PPP) for infrastructure projects”, International Journal of Project Management, 36(5), 773-794.
[16] Liang, Q., Hu, H., Wang, Z., & Hou, F. (2019). “A game theory approach for the renegotiation of Public-Private Partnership projects in Chinese environmental and urban governance industry”, Journal of Cleaner Production, 238, 117952.
[17] Lam, P. T., & Yang, W. (2020). “Factors influencing the consideration of Public-Private Partnerships (PPP) for smart city projects: Evidence from Hong Kong”, Cities, 99, 102606.
[18] Rezaeenour, J., & Mousavi Saleh., M. (2017). “Evaluation and Ranking of Public - Private Partnership Risk Factors in Water supply Projects, Using FMEA and Fuzzy Synthetic Evaluation Methods: A Case Study of Qom”, Iran-Water Resources Research, 13(4), 100-117.
[19] Rassouli, B., Kheradyar, S., & Banimahd, B. (2018). “Identify, rank and allocate critical risk the stages of public – Private partnership by Delphi technique in the context of resistance economy (case study: water and sewage industry Guilan Province)”, Journal of Investment Knowledge, 7(27), 125-140.
[20] Bahmani Bab Anari, M., & Alipanah, A. (2019). “The Risk of Public Private Partnership Contracts in the Field of Information and Communication Technology and its Management Method”, Private Law, 16(2), 369-388.
[21] Alijani, M., & Juneidi, L. (2020). “Risk Allocation in Public and Private Partnership Contracts”, Legal Encyclopedias, 3(8), 93-118.
[22] Danaeifard, H., Alvani, M., & Azar, A. (2008). Quantitative research methodology in management: a comprehensive approach, Tehran: Saffar Ishraqi Publications, ISSN: 978-964-388-196-2.
[23] CMR, C., & FC, H. (1989). “A database/spreadsheet application for equipment selection”, Construction Management and Economics, 7(3), 235-247.
[24] Moor, D., & Mccabe, G. (2006). Introduction to the practice of statis fourEdition, NewYork: WH Freema & Co.
[25] Momeni, M. (2008). New Issues in Operations Research, Mansour Momeni Publications, University Press, Tehran, Second Edition, ISSN: 9789640466940.
[26] Ketabdari, M. J. (2016). Principles and Research on Engineering Sciences, Amirkabir University of Technology Publications, Tehran, ISSN: 978-964-463-426-0.
[27] Newman, M. E. (2005). “Power laws, Pareto Distributions, and Zipf's law”, Contemporary Physics46(5), 323–351.
[28] Myers, L. S., Gamst, G., & Garino, A. J. (2012). Applied multivariate research, Translators: Pasha Sharifi, H., Rezakhani, S. D., Hassanabadi, H. R., Izanloo, B., and Habibi, M. Second Edition, Tehran: Roshd Publications.
[29] Siegel, S. (1988). Nonparametric Statistics for the Behavioral Sciences. 2nd Edition McGraw-Hill, New York.
[30] Kometa, S. T., Olomolaiye, P. O., & Harris, F. C. (1994). “Attributes of UK construction clients influencing project consultants’ performance”, Construction Management and Economics, 12(5), 433-443.
[31] Olomolaiye, P. O., Wahab, K. A., & Price, A. D. F. (1987). “Problems influencing craftsmen’s productivity in Nigeria”, Building Environment, 22(4), 317-323.
[32] Chen, Y., Okudan, G. E., & Riley, D. R. (2010). “Sustainable performance criteria for construction method selection in concrete building”, Automation in Construction, 19(2), 235-244.
[33] Kaiser, H. F. (1974). “An index of factorial simplicity”, Psychometrika, 39(1), 31-36.
CAPTCHA Image