Analysis on the factors of risk allocation in PPP projects in China

Till 2014, more than 40 regulations about PPP (public-private partnership) have been promulgated, which makes 2004 called as “China PPP Year One”. However, PPP projects have been encountering so many problems such as... [ view full abstract ]

Till 2014, more than 40 regulations about PPP (public-private partnership) have been promulgated, which makes 2004 called as “China PPP Year One”. However, PPP projects have been encountering so many problems such as unsuccessful cooperation, damaging public interests, heavy government debt etc. One crucial reason is that risk allocation mechanism is not rational. Therefore, how to identify the factors of risk allocation is the base for successful PPP projects. Firstly, this paper uses 15 typical cases of China PPP projects to get a draft list of the factors of uncertain and important risks, and then conducts a questionnaire survey to explore what risks China PPP projects are facing, what are the causes of those risks, and what influences those risks have on PPP projects. Finally, this paper tries to identify the uncertain and important risks in China PPP projects, and classifies them in national, market and project level; this paper discusses what risks should be taken by government, market or project; this paper pictures the influences of risks on PPP projects. The findings should enable public sector clients to establish more efficient risk allocation framework in the early stage of project development.