Preferred risk allocation in Chinas publicprivate partnership (PPP) projects

Abstract As part of a comprehensive research into PPP implementation, a two-round Delphi survey was conducted with experienced practitioners to identify the preference of risk allocation in China’s PPP projects. The results show that the public sector would take sole responsibility for the risk “Expropriation and nationalization”, and take the majority of responsibility for 12 other risks related to government or government officials and their actions. Fourteen risks which neither the public nor private sector may be able to deal with them alone are preferred to be shared equally. The private sector would take the majority of responsibility for 10 risks that are at the project level. Interestingly, no risk fell into the category that should be solely allocated to the private sector. Further analysis of the reasons behind these allocation preferences was then conducted. Recommendations on commercial principles and contract terms between the public authorities and private consortia are also made.

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