Risk Management Capability for Risk Allocation in Social Infrastructure Public Private Partnerships: A New Zealand Perspective

Abstract

The use of Public-Private Partnerships (PPPs) has become increasingly popular as an innovative way for procuring public infrastructure projects. One of the main reasons for this widespread adoption is the transfer and allocation of risks. Research has shown that fair allocation of risks is crucial for the success of a PPP. This study recognized the significance of fair risk distribution and examined seven crucial risk allocation criteria (RAC) along with 16 risks that are often improperly assigned based on previous research. An online questionnaire through Qualtrics was administered to experts who had prior involvement in three schools and two prison PPP projects in New Zealand to obtain data on risk management capability. The data collected from 43 respondents was analysed using mean score analysis. Relevant statistical tests such as Cronbach's alpha and independent sample t-tests were performed to ensure the accuracy of the analysis results. The objective of this study is to offer valuable insights to PPP stakeholders on the most efficient measures to achieve fair risk allocation and the state of risk management capabilities of public and private sectors in New Zealand. To accomplish fair risk allocation, the study proposes considering the risk management capacities of both the public and private sectors in the context of the identified RAC. The findings of the study are anticipated to aid PPP stakeholders in formulating strategies that can enhance risk management and establish a balanced distribution of risks.

Keywords

• public-private partnership
• risk allocation criteria
• risk allocation
• risk management capability