Interpreting risk allocation mechanism in public-private partnership projects : an empirical study in a transaction cost economics perspective

Risk allocation in public-private partnership (PPP) projects is currently claimed as capability driven. While lacking theoretical support, the claim is often 'violated' by current industrial practice. There is thus a need for formal mechanisms to interpret why a particular risk is retained by government in one project while transferred to private partners in another. From the viewpoint of transaction cost economics (TCE), integrated with the resource-based view (RBV) of organizational capabilities, this paper proposed a theoretical framework for understanding risk allocation practice in PPP projects. The theories underlying the major constructs and their links were articulated. Data gathered from an industry-wide survey were used to test the framework. The results of multiple linear regression (MLR) generally support the proposed framework. It has been found that partners' risk management routine, mechanism, commitment, cooperation history, and uncertainties associated with project risk management could serve to determine the risk allocation strategies adopted in a PPP project. This theoretical framework thus provides both government and private agencies with a logical and complete understanding of the process of selecting the allocation strategy for a particular risk in PPP projects. Moreover, it could be utilized to steer the risk allocation strategy by controlling certain critical determinants identified in the study. Study limitations and future research directions have also been set out.

Risk allocation in public-private partnership projects : an innovative model with an intelligent approach

Both the increasing private participation in public projects and the critical importance of appropriate risk allocation to the success of Public-private partnership (PPP) projects justify specific research on how to establish effective risk allocation strategies in PPP projects. Partner’s risk management capability is currently the main concern to risk allocation in PPP projects. Following the transaction cost economics, it is argued that factors such as partner’s commitment and risk management structure should be considered simultaneously in order to develop effective risk allocation strategies. Based on the holistic capability-commitment governance-driven view, this paper proposed a model for generating an optimal risk allocation strategy in PPP projects. The model is demonstrated and described. An artificial intelligent technique integrated with fuzzy logic for model testing and validation is then introduced and justified. The innovative model is expected to provide a logical and complete understanding of the risk allocation strategy selection process, and to provide stakeholders with a richer framework than previously existing ones to guide their decision-making on risk allocation strategies.

Allocating risks in public-private partnership projects using a transaction cost economics approach - a case study

Public-private partnership (PPP) projects are often characterised by increased complexity and uncertainty due to their idiosyncrasy in the management and delivery processes such as long-term lifecycle, incomplete contracting, and the multitude of stakeholders. An appropriate risk allocation is particularly crucial to achieving project success. This paper focuses on the risk allocation in PPP projects and argues that the transaction cost economics (TCE) theory can integrate the economics part, which is currently missing, into the risk management research. A TCE-based approach is proposed as a logical framework for allocating risks between public and private sectors in PPP projects. A case study of the Southern Cross Station redevelopment project in Australia is presented to illustrate the approach. The allocation of important risks is put under scrutiny. Lessons learnt are discussed and alternative management approaches drawing on TCE theory are proposed.

Neurofuzzy decision support system for efficient risk allocation in public-private partnership infrastructure projects

The performance of public-private partnership (PPP) infrastructure projects is largely contingent on whether the adopted risk allocation (RA) strategy is efficient. Theoretical frameworks drawing on the transaction cost economics and the resource-based view of organizational capability are able to explain the underlying mechanism but unable to accurately forecast efficient RA strategies. In this paper, a neurofuzzy decision support system (NFDSS) was developed to assist in the RA decision-making process in PPP projects. By combining fuzzy and neural network techniques, a synthesized fuzzy inference system was established and taken as the core component of the NFDSS. Evaluation results show that the NFDSS can forecast efficient RA strategies for PPP infrastructure projects at a highly accurate and effective level. A real PPP infrastructure project is used to demonstrate the NFDSS and its practical significance.

Risk allocation in public-private partnership projects

Both the increasing private participation in public projects and the critical importance of appropriate risk allocation to the success of public-private partnership (PPP) projects justify specific research on the risk allocation practice in PPP projects, particularly whether the practice is value-for-money driven. In this paper, the risk allocation in construction projects is examined firstly. The risks associated with PPP projects and the concept of optimal risk allocation are then reviewed. More importantly, the risk allocation practice in PPP projects is examined, particularly in the Australian context. Important issues, such as the current practice, the governments' accountability, and achieving efficient allocation, are discussed. The discussion presented in this paper is expected to justify and elicit further research on how to achieve efficient risk allocation in PPP projects

Perceptions of representatives of public, private, and community sector institutions of the barriers and enablers for physically active transport

Active transport bridges many shared concerns in the public health and transport sectors. To positively affect opportunities for active transport, public health and transport professionals are engaging with other sectors, including urban planning, housing, recreation, retail, education, and employer groups. A first step in such inter-sectoral collaboration is to understand the perceptions of key players in all of these sectors. This paper describes the results of structured interviews with senior and middle-level administrators from public, private, and community groups in a rapidly developing region in Queensland, Australia, to assess the perceived barriers and enablers to active transport. Key themes emerged relating to infrastructure delivery, public transport services, walk- and cycle-friendly community attributes, political leadership and government coordination, and societal travel norms and culture. There were also themes relating to limits due to resources and limited relevant technical expertise, institutional and practitioner cultures, and agencies not identifying with their roles in active transport. Policies and cross-government initiatives were seen to hold promise, including economic incentives and built environment guidelines, campaigns targeting public attitudes and opinions, and community participation in policy-making. These elements are potential keys to positively promoting comprehensive active transport initiatives among gatekeepers and leaders across different sectors.

Law, governance and risk: deconstructing the public-private divide in climate change adaptation

The article focuses on the public–private divide in law and which organizes principles for and governance. It analyzes the governance model of public–private divide regarding for climate change adaptation in context to a case study of water governance and flood risk. It compares the relationship between state and individual laws which helps in policy setting.

The role of law and public-private collaboration in promoting innovative firms in Brazil: the case of the BNDES and the “criatec fund”

This paper presents the result of a qualitative empirical research about the “Criatec Fund”, a venture capital fund, privately managed and directed to innovative firms, that was created in 2007 by the Brazilian Development Bank (BNDES). The paper discusses the role of law in the implementation of the Criatec Fund in three different legal dimensions: structural, regulatory and contractual. Based on interviews, this paper tries to test some hypothesis previously formulated by some scholars that studied new financial policies created by the BNDES. This study explains the institutional arrangements of this seed capital policy and the role of flexible legal instruments in the execution of this peculiar type of publicprivate partnership. It also poses some questions to the “law and development agenda” based on some insights from the economic sociology of law.

Barbados: public-private sector partnership

Includes bibliography

A sub-national public-private strategic alliance for innovation and export development: the case of the Canadian province of Alberta's oil sands

Includes bibliography