Methodology to Develop the Early Warning System for Residual Value Risk of Public Private Partnership Projects

The Early Warning System (EWS) was developed in this research aiming to forecast and monitor the Residual Value Risk (RVR) in PPP projects. RVR is a structured risk system which would happen at any time in the whole life before transfer of PPP projects, but consequently causes the Residual Value (RV) that the Government takes over cannot fulfill the specifications. To establish the EWS of RVR, the factor system was identified through questionnaire survey and evaluated based on statistical analysis. Besides the RVR could be learned by CBR, so a great amount of history PPP projects which have been already transferred should be structured into a case base. Furthermore, the conception of System vulnerability was applied to open up the link between the RVR and the RV, and the proper method was selected to determine the early-warning threshold. The main function of the EWS is monitoring the RVR of current PPP projects and warning the potential RV threat or opportunity.