Uneingeschränkter Zugang

Risk-based integrated performance assessment framework for public-private partnership infrastructure projects

Anam Fatima

Anam Fatima

Department of Architectural Engineering & Design, Faculty of Civil Engineering, University of Engineering and TechnologyLahore, Pakistan
Suche nach diesem Autor auf
Sciendo|Google Scholar
Fatima, Anam
, 
Sajjad Mubin

Sajjad Mubin

Department of Architectural Engineering & Design, Faculty of Civil Engineering, University of Engineering and TechnologyLahore, Pakistan
Suche nach diesem Autor auf
Sciendo|Google Scholar
Mubin, Sajjad
 und 
Rehan Masood

Rehan Masood

Ako Delivery—Region Four: Construction Services Team, College of Engineering, Construction and Living Sciences, department of Construction, Otago Polytechnic, Te PūkengaDunedin, New Zealand
Suche nach diesem Autor auf
Sciendo|Google Scholar
Masood, Rehan
  
28. Aug. 2024
Risk-based integrated performance assessment framework for public-private partnership infrastructure projects's Cover Image
Über diesen Artikel
Vorheriger Artikel
Nächster Artikel
Zitieren
COVER HERUNTERLADEN
Artikel-Kategorie: Research Paper
Online veröffentlicht: 28. Aug. 2024
Seitenbereich: 251 - 274
Eingereicht: 11. Mai 2024
Akzeptiert: 18. Juli 2024
DOI: https://doi.org/10.2478/otmcj-2024-0018
Schlüsselwörter
© 2024 Anam Fatima et al., published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 International License.

Fig. 1:

Theoretical model of research methodology.
Theoretical model of research methodology.

Fig. 2:

Analysis of top 10 risks in the PPP industry of Pakistan using RII technique. PPP, public-private partnership; RII, relative importance index.
Analysis of top 10 risks in the PPP industry of Pakistan using RII technique. PPP, public-private partnership; RII, relative importance index.

Fig. 3:

Risk interdependency diagram of top 10 risks.
Risk interdependency diagram of top 10 risks.

Fig. 4:

Influence diagram illustrating the impact of risks on PMs in PPP projects (integrating iron triangle). (A) Cost influence diagram, (B) Time influence diagram and (C) Quality influence diagram (right). PM, performance measure; PPP, public-private partnership.
Influence diagram illustrating the impact of risks on PMs in PPP projects (integrating iron triangle). (A) Cost influence diagram, (B) Time influence diagram and (C) Quality influence diagram (right). PM, performance measure; PPP, public-private partnership.

j_otmcj-2024-0018_tab_005

SR. KPIs PMs Risk Factors Risk Factors and PMs Integration Solutions for Risks
1. KPI1 Cost PM-1 Construction Cost Variance F-9: Inflation and inaccurate estimate of market demand Inflation and Inaccurate Estimation: Improper estimations of inflation and market conditions can result in the construction cost at various stages varying from the estimated costs. Mitigate – Conduct accurate market research and update budgets periodically.
EG-1: Act of God/Force Majeure Act of God/Force Majeure: Unexpected phenomena such as floods, earthquakes, pandemics and so on may cause economic strain in the market, resulting in increased prices of resources. Transfer – Obtain insurance coverage and enforce safety measures at the construction site.
2. PM-2 Construction Cost EG-1: Act of God/Force Majeure Act of God/Force Majeure: Unexpected phenomena such as floods, earthquakes, pandemics and so on may cause economic strain in the market, resulting in increased prices of resources and ultimately impacting the overall final cost of the project which may be more than that of similar PPP projects. Transfer – Transfer risk to third parties through insurance.
F-7: Change in Project Cost Change in Project Cost: A change in the cost of a project at any phase may have a huge impact on the overall cost of the project. Mitigate – Conduct comprehensive feasibility studies and adhere to project standards to minimise cost variations.
3. PM-3 Viability of the Financial Model OP-4: Unpredictable Revenue Generation Revenue Generation: If unpredictable then the financial model may not be viable. Mitigate – Strategies revenue scenarios during feasibility studies and propose efficient VGF Models.
CP-1: Improper project feasibility study and planning Feasibility Study and Planning: If not properly done then it may affect the profitability and financial viability of the project. Avoid – Allocate adequate time and resources to ensure precise feasibility studies and planning.
4. PM-4 VfM OP-4: Unpredictable Revenue Generation Revenue Generation: If unpredictable then the end – product gained may not provide financial benefit to the client, which decreases the VfM of the project. Mitigate – Estimate revenue with consideration of various factors to maintain project value.
CP-1: Improper project feasibility study and planning Feasibility Study and Planning: If not properly done then the final project handed over to the client may not be feasible, resulting in reduced profitability and VfM. Avoid – Conduct meticulous feasibility studies to ensure quality and cost balance throughout the project lifecycle.
5. KPI2 Time PM-5 Construction Time Variance EG-1: Act of God/Force Majeure Act of God/Force Majeure: Unexpected phenomena such as floods, earthquakes, pandemics and so on may halt or delay the project, resulting in the actual completion time varying from the estimated time. Transfer – Transfer force majeure risks to third parties for timely resolution.
CP-12: Third-Party Delay and Violation Third-Party Delays and Violation: Issues caused by third parties such as NGOs, environmental bodies and so on may cause time variation. Mitigate-Address third-party delays through negotiation and pre-contract agreements.
G-2: Inconsistency in governmental policies and regulations Inconsistency in Governmental Policies and Regulations: Constantly changing policies and laws regarding PPP Projects, may affect the scheduled tasks and cause delays. Avoid-Secure political risk insurance to mitigate regulatory inconsistencies.
6. PM-6 Project Completion and Delays CP-12: Third-Party Delay and Violation Third-Party Delays and Violation: Issues caused by third parties such as NGOs, environmental bodies and so on may shut down the project or cause delays at various stages. Mitigate-Establish clear communication channels with external entities.
EG-1: Act of God/Force Majeure Act of God/Force Majeure: Unexpected phenomena such as floods, earthquakes, pandemics and so on may completely stop or delay the project by causing irrefutable damages. Transfer – Transfer force majeure risks to third parties.
G-2: Inconsistency in governmental policies and regulations Inconsistency in Governmental Policies and Regulations: Constantly changing policies and laws, including issues such as changes in government, may delay its construction and completion. Avoid – Use governmental policies to maximise voluntary compliance.
L-2: Contractual Changes and Ambiguities Contractual Changes and Ambiguities: Due to contract changes, the scope and other parameters of the project may be redefined. Moreover, contract issues can lead to legal proceedings which may cause the project completion to be delayed. Mitigate – Concretely define contract terms to prevent ambiguity.
EG-3: Land Acquisition Land Acquisition: Legal issues related to land acquisition for the PPP Project may cause project delays. These issues are mostly caused when public land is to be bought for construction. Mitigate – Provide prompt compensation for affected parties.
7. PM-7 Concession Period and Recovery OP-3: Unsuitable Concession Period Unsuitable Concession Period: If the concession period is not appropriate for revenue generation, it may affect the performance of a project concerning its concession period. Mitigate-Set concession period with consideration of risks.
CP-12: Third-Party Delay and Violation Third-Party Delays and Violation: Issues caused by third parties such as NGOs, environmental bodies and so on may cause stay orders or other legal issues that can impact the concession period, by stopping the operation of the project. Mitigate – Proactively manage and coordinate with external entities.
EG-1: Act of God/Force Majeure Act of God/Force Majeure: Unexpected phenomena such as floods, earthquakes, pandemics and so on may impact the generation of revenue, thus requiring an increase in the concession period. Transfer – Transfer force majeure risks to third parties.
8. PM-8 Defect Liability Period EG-1: Act of God/Force Majeure Act of God/Force Majeure: Unexpected phenomena such as floods, earthquakes, pandemics and so on may delay the defect liability period and thus affect the scheduled defect repair work and ultimately the handover of the PPP Project. Transfer – Allocate responsibility for force majeure events in contracts.
G-2: Inconsistency in governmental policies and regulations Inconsistency in Governmental Policies and Regulations: Changing PPP Policies and political situations, may cause the project to halt during its defect liability period thus ultimately affecting the performance of a project for its defect liability period. Avoid – Improve coordination and communication among government entities.
CP-12: Third–Party Delays and Violation Third-Party Delays and Violations: Third – parties such as NGOs and regulating bodies may intervene and cause delays during the defect liability period. Mitigate – Take proactive steps to minimise impact of third-party delays.
9. KPI3 Quality PM-9 Quality Specified vs Actual Quality EG-1: Act of God/Force Majeure Act of God/Force Majeure: Unexpected phenomena such as floods, earthquakes, pandemics and so on may cause damages on-site which ultimately affect the quality of the project. Transfer – Utilise insurance policies or contractual agreements to transfer the risk of Act of God events to external parties.
CP-1: Improper project feasibility study and planning Improper Planning: If a project is not properly planned during the initial stages, it may lead to quality issues later on, which may deviate from the promised level of quality. Avoid – Thorough project planning, stakeholder engagement and risk assessment to ensure quality control procedures.
10. PM-10 Health and Safety CP-9: Accidents on-site and Injuries Accidents On-site and Injuries: If the number of accidents and injuries that happened on–site is more, then it affects the Health and Safety performance of the project. Such issues indicate that proper safety provisions were not undertaken on-site. Avoid – Implement strict safety procedures, provide thorough training and conduct routine site inspections.
11. PM-11 Defects and Problems OP-5: Poor O&M of Project Poor O&M of Project: If a PPP project is not properly maintained during its O&M period, it may lead to defects and problem issues after handover. Avoid – Establish strong O&M protocols, select qualified service providers and conduct routine inspections.
12. PM-12 Transparency CP-8: Documentation Errors Documentation Error: If documents are not properly maintained and are altered to change cost, schedule, or quality issues, it can lead to transparency problems and ultimately affect the quality of the project, as issues cannot be immediately communicated to relevant bodies due to lack of paperwork. Avoid – Use standardised templates, stringent quality control and review systems for accurate documentation.
13. PM-13 Effectiveness EG-1: Act of God/Force Majeure Act of God/Force Majeure: Unexpected phenomenon such as floods, earthquakes, pandemics and so on may cause damages on-site which ultimately affect the ability of the project to meet the required standards and goals. Reduce – Implement early risk identification, contingency planning, resilient design practices and obtain insurance coverage.
CP-1: Improper Project Feasibility and Planning Improper Project Feasibility and Planning If a project is not properly planned during the initial stages, it may lead to quality issues later on. Moreover, if a proper feasibility study is not done, it can lead to reduced profitability of a PPP Project which is a major goal for all parties involved. Mitigate – Conduct thorough risk assessments, engage experienced consultants and incorporate stakeholder input for realistic objectives.
14. PM-14 Efficiency EG-1: Act of God/Force Majeure Act of God/Force Majeure: Unexpected phenomena such as floods, earthquakes, pandemics and so on may cause damages on-site which ultimately affect the quality of the project and thus make the project inefficient. Reduce-Implement early risk identification, contingency planning and resilient design practices.
CP-1: Improper Project Feasibility and Planning Improper Planning: If the project is not properly planned during the initial stages, it may lead to quality issues later on and improper feasibility study impacts revenue generation which leads to inefficiency concerning both quality and cost. Mitigate – Conduct thorough risk assessments, engage experienced consultants and adapt plans to ensure realistic objectives.
15. PM-15 Communication CP-8: Documentation Errors Documentation Errors: If documents are not properly maintained or are altered by a third party, it can lead to communication issues between stakeholders. Avoid – Implement standardised documentation processes, conduct quality checks and encourage accurate information sharing.
SH-2: Communication Issues Communication Issues: Experience, work ethic, ambiguities, contract disputes and so on can cause communication issues and may cause an increase in change orders, which can hinder the quality of the project during the execution phase. Mitigate – Foster open communication, stakeholder engagement and efficient project management for improved understanding.
16. PM-16 Procurement F-9: Inflation and inaccurate estimate of market demand Inflation: An increase in inflation can cause budget constraints which may cause the procuring bodies to compromise on quality to maintain project costs. Accept – Proactive monitoring of cost fluctuations, transparent price adjustment negotiations and contract clauses for inflation.
EG-1: Act of God/Force Majeure Act of God/Force Majeure: Unexpected phenomena such as floods, earthquakes, pandemics and so on can put economic constraints on services and goods, resulting in increased prices. Procuring bodies may have to compromise on quality to maintain project costs. Transfer – Utilise expertise, resilient design and budget adjustments to mitigate the impact of force majeure events.

Top 10 risk ranking by RII

Rank Risk Category Risks RII Value
1 F-9 Financial Risk Inflation and inaccurate estimate of market demand 0.8
2 EG-1 Environmental and General Risk Act of God/Force Majeure Risks 0.78
3 OP-4 Operational Risk Unpredictable Revenue Generation 0.71
4 CP-1 Construction Project Risk Improper project feasibility study and planning 0.7
5 G-2 Governmental Risk Inconsistency in governmental policies and regulations 0.68
6 OP-3 Operational Risk Unsuitable Concession Period 0.643
7 CP-12 Construction Project Risk Third-Party Delay and Violation 0.642
8 L-2 Legal Risk Contractual changes and ambiguities 0.64
9 F-7 Financial Risk Change in project cost 0.581
10 CP-8 Construction Project Risk Documentation Errors 0.58

KPIs and PMs in PPP projects_

Sr. No. KPI Code PM Research Question Measurement Reference
1. KPI1 Cost PM-1 Construction Cost Variance What is the disparity between the budgeted and actual construction expenses for the project? Rupees Soomro et al. (2020), Ullah et al. (2018) and Yuan et al. (2012)
2. PM-2 Construction Cost Was the construction cost optimised effectively? Yes/No Heale and Forbes (2013), Mazher et al. (2018) and Ying et al. (2024)
3. PM-3 Viability of the Financial Model Is the financial model considered to be feasible? Yes/No Guo et al. (2021), Jin et al. (2020) and Ke (2014)
4. PM-4 VfM What is the VfM for the project? Rupees Buyukyoran and Gundes (2018), Ingle et al. (2021) and Nguyen et al. (2018)
5. KPI2 Time PM-5 Construction Time Variance What distinguishes the allocated construction time from the actual construction time? Days Attarzadeh et al. (2017), Matraeva et al. (2016) and Yuan et al. (2012)
6. PM-6 Project Completion and Delays Was there any delay in completing the project? Yes/No Guo et al. (2021), Mladenovic et al. (2013)
7. PM-7 Concession Period and Recovery Was the concession period utilised optimally? Yes/No Malek and Gundaliya (2021), Yong Kim and Thuc (2021)
8. PM-8 Defect Liability Period What was the duration of the defect liability period for this project? Years Pilot Study
9. KPI3 Quality PM-9 Quality Specified vs Actual Quality Does the actual quality meet the listed standards? Yes/No Ahmadabadi and Heravi (2019), Guo et al. (2021), Osei-Kyei and Chan (2017) and Villalba-Romero and Liyanage (2016)
10. PM-10 Health and Safety Were the on-site health and safety provisions sufficiently provided? Yes/No Bao et al. (2018), Buertey and Asare (2014)
11. PM-11 Defects and Problems Were maintenance duties efficiently executed? Yes/No Mohamad et al. (2018), Radujković et al. (2010), Villalba-Romero et al. (2015) and Wang et al. (2020b)
12. PM-12 Transparency Were project issues and problems transparently communicated throughout? Yes/No Pilot Study
13. PM-13 Effectiveness Was the project compliant with the specified standards and objectives? Yes/No Pilot Study
14. PM-14 Efficiency Was the project executed efficiently? Yes/No Cong and Ma (2018)
15. PM-15 Communication Was the communication among stakeholders efficient and effective? Yes/No Pilot Study
16. PM-16 Procurement Were quality products and services procured as required? Yes/No Pilot Study

Categorised critical risk factors

Stakeholder Risks Reference
SH1 Cultural differences between stakeholders Ezatabadi et al. (2018)
SH2 Communication Issues Rasheed et al. (2022)
SH3 Lack of leadership, authority, organisation and coordination Ezatabadi et al. (2018)
SH4 Lack of commitment by a private party Abd Karim (2011)
Construction Project Risks
CP1 Improper project feasibility study and planning Sy et al. (2016)
CP2 Incomplete Design Rasheed et al. (2022)
CP3 Improper change order approval process Chan et al. (2011)
CP4 Poor definition of scope and change in scope Rasheed et al. (2022)
CP5 Inappropriate project specification Wang et al. (2020a)
CP6 Inadequate Site Investigation Chan et al. (2015)
CP7 Losses to equipment and properties of contractors
CP8 Documentation Errors Xu et al. (2015)
CP9 Accidents on sites and Injuries Yuan et al. (2018)
CP10 Unavailability of labour and material Xu et al. (2010)
CP11 Poor Workmanship Rasheed et al. (2022)
CP12 Third-Party Delay and Violation Xu et al. (2010)
Operational Risks
OP1 Low Operating Productivity Abd Karim (2011)
OP2 Lack of Public Acceptance of PPP Project Zou et al. (2008)
OP3 Unsuitable Concession Period
OP4 Unpredictable Revenue Generation
OP5 Poor O&M of Project Qin et al. (2019)
OP6 Lack of Compliance of Contract Rasheed et al. (2022)
Financial Risks Reference
F1 Financers Unwilling to take risks Abd Karim (2011)
F2 Improper Risk Allocation Koike and Hofert (2020)
F3 Delay in financial closure Abd Karim (2011)
F4 Delay in payment of annuity
F5 Delay in funding Wang et al. (2020b)
F6 Concessionaire Change Xu et al. (2010)
F7 Change in project cost Zou et al. (2008), Omoregie Aghimien et al. (2017)
F8 Minimum Revenue Guarantee Zou et al. (2008)
F9 Inflation and inaccurate estimate of market demand Zou et al. (2008), Xu et al. (2010)
F10 Inadequate Insurance Coverage Chan et al. (2015)
F11 Improper Financial Model Abd Karim (2011)
Legal Risks
L1 Legal Proceedings Soomro and Zhang (2015)
L2 Contractual changes and ambiguities
L3 Lack of federal, state and local permits Abd Karim (2011)
Governmental Risks
G1 Improper Regulatory Framework Abd Karim (2011)
G2 Inconsistency in governmental policies and regulations
G3 Lack of political support Xu et al. (2010)
G4 Change of Government Zou et al. (2007)
Environmental and General Risks
EG1 Act of God/Force Majeure Risks Xu et al. (2010)
EG2 Corruption Zou et al. (2007)
EG3 Land Acquisition Xu et al. (2010)

PMs ranking by RII

Rank KPIs ID Performance Measure (PMs) RII Value
1 Time PM-6 Project Completion and Delays 0.98
2 Cost PM-3 Viability of the Financial Model 0.921
3 Quality PM-9 Quality Specified vs Actual Quality 0.92
4 Cost PM-2 Construction Cost 0.902
5 Cost PM-5 Construction Time Variance 0.901
6 Quality PM-14 Efficiency 0.90
7 Quality PM-13 Effectiveness 0.88
8 Quality PM-16 Procurement 0.86
9 Cost PM-1 Construction Cost Variance 0.843
10 Quality PM-11 Defects and Problems 0.841
11 Time PM-7 Concession Period and Recovery 0.84
12 Cost PM-4 VfM 0.822
13 Time PM-8 Defect Liability 0.82
14 Quality PM-10 Health and Safety 0.8
15 Quality PM-15 Communication 0.68
16 Quality PM-12 Transparency 0.66
Sprache:
Englisch
Zeitrahmen der Veröffentlichung:
1 Hefte pro Jahr
Fachgebiete der Zeitschrift:
Technik, Einführungen und Gesamtdarstellungen, Technik, andere
Zeitschrift RSS Feed