Risk management of public-private partnership (PPP) infrastructure projects in Laos

Abstract

Public-private partnership (PPP) is a popular option of project delivery and contractual scheme between the public and private sectors public infrastructure projects. Many factors contribute to the success of PPP projects, most of which are country-specific. Since Laos has recently adopted PPP for several infrastructure projects, all stakeholders must understand the critical risks that influence the performance of PPP projects. In this research, we identify, evaluate and rank the critical risk factors and risk categories that affect the PPP project development of in Laos. The questionnaire survey and In-depth interviews were used to gather information from nine respondents, who represent the public and private sectors and have extensive experience in PPP projects. The interviews were carried out using a two-round Delphi. The likelihood of occurrence and the severity of risks were assessed by using the impact method and the technique for the order of preference by similarity to ideal solution (TOPSIS) method. Thirty-three risk factors in PPP projects were identified and grouped into eight categories. The results show that 15 critical risk factors from seven categories have a major impact on PPP projects in Laos. The findings benefit the Lao government and the private sector for understanding the risk factors affecting PPP projects. The government must appropriately address these factors, so that PPP projects will be more profitable and attractive to the private investor. These results provide valuable information and a guideline for all parties who want to participate in the PPP projects in Laos.