Research On Risk Management Of PPP Investment

To weather the global financial crisis, many countries in the world developedpolicies to support Public-Private Partnerships (PPP) investment. However, PPPinvestment that has the characteristics of big investment, long time, complicatedtechnology, incomplete contracts, and so on, are confronted with many risk factors inthe implementation process. Therefore, the study of risk management for PPPinfrastructure in China is extremely important. At present, the research on theinvestment risks of PPP is still in its infancy in China, and we lack of theory andpractical experience in risk management. Based on the theories of New PublicManagement (NPM), Incomplete Contract and Principal-Agent Relationship, thispaper tries to study risk management of PPP investment from the perspective ofincentives and third-party supervision, which can provide a new perspective to studyPPP investment. Also it adds a new way for better use of PPP investment andeffective management of the risks.This paper chooses the risk management of PPP investment as the object ofstudy, which uses qualitative and quantitative methods combined with the theories ofgovernance and management, and the ex-ante contract design (that is bundling) ishow to reduce risk through incentives to achieve the risk management objectives.Meanwhile, it tries to build a dynamic third-party regulatory framework, from thethree dimensions of time, content and management, to study the risk management ofPPP.