Public Private Partnerships - PPP's: Implications from Policy Changes for Practice in Managing Risk
Updated: Apr 5
Authors: WuJiin, Henry Liu, MCSing, Richard Humphrey, JianFeng Zhao
Public-Private Partnerships (PPPs) have been widely used to develop infrastructure systems since the 1980s. However, they are currently being plagued with controversy, as some of the projects were subject to substantial cost/time overrun and/or poor service quality. Essentially, a variety of risks can contribute to the failure of PPPs (e.g., political, legal and commercial risks); therefore, identifying and assessing risky factors plays a decisive role during PPP risk management process. Notably, implementations of PPPs in developing countries are normally subject to higher legal risks, owing to immature regulatory systems. With this in mind, this paper conducts a case study of China’s institutional arrangements for PPPs, aiming to not only identify and assessing the risks resulting from local legal practices. Impacts of the identified risk factors on PPP initiation and implementation are interpreted by using an analytical technique of Causal Loop Diagram (CLD) view below. The CLDs developed in this study are theoretical significant and practical, as they can provide private entities of PPPs with a clear and useful insight into deriving appropriate strategies to hedge legal risks and enabling effective planning for infrastructure development in developing countries.
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