Cross-sectional analysis of critical risk factors for PPP water projects in China

Publication Type:
Journal Article
Citation:
Journal of Infrastructure Systems, 2015, 21 (1), pp. 04014031 - 04014031
Issue Date:
2015
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During the past decades in China, the traditional state monopoly has experienced difficulties in meeting the huge demand for new infrastructure and improvement in service levels, engendering the growth of different forms and degrees of private sector involvement. Since the 1990s, China has started experimenting with the public-private partnership (PPP) delivery method in the water supply sector. However, many problems stemming from unsuccessful risk management have been encountered in PPP applications that have eventually led to project failure. This paper aims to identify and evaluate typical risks associated with PPP projects in the Chinese water supply sector. A literature review, a Delphi survey, and face-to-face interviews were used to achieve these objectives. Finally, a register of 16 critical risk factors (CRFs) of water PPP projects in China was established. The findings revealed that completion risk, inflation, and price change risk have a higher impact on Chinese water PPP projects, whereas government corruption, an imperfect law and supervision system, and a change in market demand have a lower impact on the water supply sector. The findings can help project stakeholders to improve the efficiency of privatization in public utility service and provide private investors with a better understanding while they participate in the enormous Chinese water market through the PPP mode.
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