Risk Identification And Assessment For Public-Private Partnership(PPP) Water Supply Project In Pakistan

The last two decades have witnessed a growing trend by governments around the world using the skills and expertise and financial resources of the private sector through public-private partnership(PPP)procurement in delivering public water supply services and infrastructure.Like other countries,the Government of Pakistan is turning to the private sector to develop the country's water supply infrastructure,and PPP in the water sector is emerging.Key reasons for adopting this policy are inadequate public funding,the need for improved management and efficiency,growing water demand,and poor asset condition and lack of maintenance.PPPs have diverse modalities including service and management contracts,afterimage-leases,concessions,joint ventures and build-operate-transfer(BOT-type)arrangements.In the water industry of low-and middle-income countries,water concessions and BOT contracts are the most popular modalities.PPP water supply projects are a plethora of risk,and the contractual agreements for these projects allocate the risks between the public water utility(government)and the private sector entity.The overall aim of this thesis is to develop a model for successfully allocating risks in PPP water supply projects in Pakistan,so that decision-makers can arrive at a fair risk allocation decision.However,the outcome of the study is applicable to other developing countries that share similar characteristics with Pakistan.The primary data acquisition tool for this research study is a three-round Delphi questionnaire survey of industry experts from both public and private sectors,with relevant experience in the local water industry and PPP procurement.The expert respondents were selected through purposive sampling and semi-snowballing approaches.Thirty-seven to forty-one PPP experts provided valid responses to various parts of the questionnaire.The panel sizes are justified,given that PPP is at its budding stage in Pakistan.Various statistical methods such as the fuzzy synthetic evaluation(FSE)method was subsequently applied for success and risk assessment and risk allocation modeling.The proposed prototypic fuzzy quantitative risk allocation decision model(FQRADM)for PPP(water supply)infrastructure projects deals with the imprecise and subjective nature of risk allocation decision-making,and handles the simultaneous consideration of the multiple risk allocation criteria and multiple decision-makers.The output variable of the model is the risk allocation proportions between the government and private partner according to their capabilities to control and manage evaluated risk factors.This risk allocation strategy ensures that both parties have an incentive to manage the risks.Overall,this study could trigger policy development toward PPP practice in Pakistan and other developing countries,because these findings have wider implications for legal and regulatory systems,public capacity,financing,public procurement,and politics.