Construction Research: Risks in Public Private Partnership Projects

This report provides a comprehensive overview of the risks associated with Public Private Partnership (PPP) projects, based on a thorough literature review conducted for the SRR721 Construction Research Project. It identifies various risk categories including market and revenue risks, design risks, construction risks (such as land expropriation, cost overruns, and contractual defaults), operating risks, financial risks (exchange rate and interest rate risks), environmental risks, and legal risks. The research methodology employs a qualitative approach, utilizing a descriptive research design and data collected from reports, books, and journals. The report aims to help project managers identify and mitigate potential risks in future PPP projects, enhancing the success and sustainability of large-scale infrastructural developments. Desklib offers a range of solved assignments for students.

Running head: RESEARCH PROPOSAL
Construction research project
Name of the student
Name of the university
Author Note:

2
RESEARCH PROPOSAL
Table of Contents
Introduction......................................................................................................................................4
Background..................................................................................................................................4
Significance of the Topic.............................................................................................................4
Research Questions..........................................................................................................................4
Research Aims and Objectives........................................................................................................5
Aims.............................................................................................................................................5
Objectives....................................................................................................................................5
Conceptual Framework....................................................................................................................6
Figure No 1: Conceptual Framework..........................................................................................6
Literature Review............................................................................................................................6
Large Scale Risks in PPP Projects...................................................................................................9
Research Methodology..................................................................................................................10
Qualitative Research......................................................................................................................10
Research Design........................................................................................................................10
Data Collection Method.............................................................................................................11
Reason for Selection of Qualitative Method.............................................................................11
Timeline.........................................................................................................................................12
Table No 1: Time Schedule.......................................................................................................12

3
RESEARCH PROPOSAL
Gantt chart.....................................................................................................................................13
Figure 2: Gantt chart..................................................................................................................13
References......................................................................................................................................14

4
RESEARCH PROPOSAL
Introduction
Background
The coming years will see an escalation in the different infrastructural projects as well as
developmental projects in both the developing and the developed countries. The developing
countries especially are more inclined to large scale infrastructural projects that will directly
amount to a sharp increase in the GDP of the country. The project will address the risks that are
associated with the delivery of the Public-private Partnership Projects. It is necessary to have a
clear and compact idea about the following term which in short is termed as PPP. The following
model is a funding model where a particular infrastructure project is carried out with both the
technical and financial involvement of the public bodies and the private players (Neuman 2016).
The public bodies in this case are the government while the private bodies in this case are the
private organizations or the private investors.
Significance of the Topic
The significance of the particular research lies in the growing importance on the rise of
the PPP projects. The increasing number of PPP projects is one of the main factors which will
contribute to the construction of the research. There lies the significance of the research on this
particular topic as it will throw light on the identification of risk factors in future PPP model
constructions.
Research Questions
A number of different research questions will be formulated from the research. This may
be as follows;

5
RESEARCH PROPOSAL
1. What are the risks associated with the delivery of Public Private Partnership projects?
2. What are the elements involved in the PPP projects that may act as the source of such
risks?
3. How can the risks be identified and rated in the PPP projects?
Research Aims and Objectives
Aims
The main aim of the following research is to explore the risks that are involved in the
Public Private Partnership projects. This will be possible through the formulation of a solid and
compact review of the related literature that is based on the given topic.
Objectives
The objective of the research will be to conduct a critical analysis on the literature related
to the public and private partnerships in construction projects. Apart from this the research will
also synthesize the literature and provide the risks involved in such kind of projects and identify
and categorize them according to their priority (Boyack Smith and Klavans 2018). The
categorization can be possible by the proper analysis and discussion of the literature.

6
RESEARCH PROPOSAL
Conceptual Framework
Figure No 1: Conceptual Framework
Source: (As created by the Author)
PUBLIC SECTOR
INVESTMENT
PRIVATE SECTOR
INVESTMENT
RISKS ASSOCIATED WITH
THE PPP PROJECTS
1. Operational Risks
2. Financial Risks
3. Design Risks
4. Construction Risks
PUBLIC PRIVATE
PARTNERSHIP
PROJECT

7
RESEARCH PROPOSAL
Literature Review
The risks associated in a PP project can be addressed by synthesizing the elements of PPP
projects. The understanding and addressing of the risks involved in a PPP project early on is
utmost necessity for both the parties which are involved in the construction project. The literary
review will present the different kinds of risks that are involved in such kind of projects. The
main types of PPP project risks that will be discussed in the research are as follows;
 Market and Revenue Risks-This particular risk is the uncertainty in relation to the
amount generated by the project. The particular kind of risks can be classified into three
major divisions namely;
a. Insufficient Income from other operations- The following case sees similar kind of
operations exist to request the government to give some amount of cash compensation
for the different kind of deficiencies and also to extend th=e period of concession. In
addition the concession providing company will have different scopes to increase the
rents or adopt other kind of business strategies that might be of great help to the
organization.
b. Insufficient Income from fares or tolls-The Company that operates the PPP project
under Government concession may do it by means of proper concession either in cash
or in kind. The government must identify and mention the different risks associated in
such projects to avoid any kind of late problems (Creswell and Creswell 2017).
c. Insufficient Traffic- The contractor of the PPP project must obtain a sufficient
commitment from the government in respect to the anticipated traffic levels and to
negotiate a proper compensation agreement for the different kinds of deficiencies
(Neuman 2016).

8
RESEARCH PROPOSAL
 Design Risks- The particular risk relates to the problems in the design of the different
infrastructural projects or the different design requirements that are stipulated for the
particular project (Carbonara et al. 2015). The following can be said to be as an inherent
risk in the project as it is very difficult to conclusively identify the damage done to the
project site or the facility as the parameter of the damage done to the design cannot be
ascertained. Construction Risks- The following types of risk is considered to be the most devastating
and strategically the most important risk in the PPP project. This includes the like sof the
design failures, construction accidents, time frame failures and many as such. The
following risk can also be categorized into a number of different types. They are as
follows;
a. Land Expropriation- These kinds of risks may flow to both the Government as well
as the private player operating in the particular project. Both the parties must legalize
the use of the construction land and work in coordination to avoid such kind of
unnecessary risks.
b. Cost Overrun and Time and quality- These is the most common type of risk as it may
hamper the total plans and involve increase in the financial allocation of the project
(Marczyk DeMatteo and Festinger 2017). The failure of the organization to complete
the project in time will also involve in other problems like allocation problems, cost
overruns and many more as such.
c. Increased Financial Costs- The increase in time period will directly result in the
increase in the cost of the projects.

9
RESEARCH PROPOSAL
d. Contractual Default- The following kind of risk occurs when the concession
companies may claim liquidated damages from the contractor or make a claim against
the performance of the contractor and the bond and the bonding company.
e. Default of the concession company- The liquidated damages to the company involve
the different types of the concession claimed in the construction of the projects. Operating Risk- There are risks that the companies face when the management provides
maintenance and operations type of services. Apart for the dismissal of the concession of
the company, these risks have a direct impact on the concession company. Some of the
operating risks are performance risks, operational cost overrun, default risks and many
other kind of similar risks as such. Financial Risks- Financial Risks can be categorized as the other major risk that is
involved in the PPP projects. The financial risks are termed as high level risks because of
their capability to cause damage. This kind of risks is thus always provided the highest
priority. Financial risks are generally of two different types namely Exchange rate risks
and Interest rate risks (Antuchevičienė 2016). The former directly relates to the changes
in the foreign exchange valuations over the time period of the project while the latter
refers to the bearing of additional costs as interest of loans taken from the banks or other
financial institutions. Environment Risks- The absence of proper coordination between the parties involved in
the PPP project often leads to the formulation of faulty construction designs or designs
which may harm the environment (Boyack Smith and Klavans 2018). Thus it is necessary
to ensure the safety of the environment before the commencement of any large
infrastructural project.

10
RESEARCH PROPOSAL
 Legal Risks-The legal complications related to the acquiring of lands or the legal aspects
related to the construction of any infrastructural project based on a PPP design pose huge
risk to the project which must be taken into consideration.
Large Scale Risks in PPP Projects
The PPP projects have high chances of getting affected by risks because of failure in;
 Organizations Processes Contribution of the government Skills of the employees and the management Measurement
The presence of such kind of factors makes these projects prone to risks of all forms. The
research will thus help the managers of future projects to identify the risks involved.
Research Methodology
The methodology part of the research will provide the detailed methods on which the
research will be conducted. It proposes the ideal layout for the preparation of the detailed
methodology for the following study. The methodology part of the research will derive the
results of the research and also the strategies that will be used in the following research. The use
of qualitative methods will be taken to complete the research.

11
RESEARCH PROPOSAL
Qualitative Research
Research Design
The research will use the descriptive research design. The following research design will
be chosen over the other designs just because of its capability to provide a transparent and
compact analysis of the different types of theories and concepts related to the risks in PPP
projects (Antuchevičienė 2016). The use of the descriptive research design has also a larger
acceptability in the research arena than the other two designs.
Data Collection Method
The data will be generally collected by selecting different kinds of reports that can be
available from websites and also from different books and journals. The following data
collection method will be much easier to complete than the conventional methods of data
collection through sampling and interview. Apart from this the researcher can also take the help
of telephonic conversations and mail conversations to gather necessary information from
construction site engineers on the risks involved in PPP projects.
Reason for Selection of Qualitative Method
According to, Boyack Smith and Klavans (2018) the reason for the selection of the
qualitative methods in this particular case will be the fact that qualitative method helps in the in
depth investigation of the topic and will also help in the identification of the different kinds of
theories and concepts that will be helpful for meeting the objectives of the proposed research.
The particular research will moreover discuss on the different problem that occurs in PPP
projects and thus it needs a theoretical approach rather than a quantitative approach.

12
RESEARCH PROPOSAL
Timeline
Task Name Duration Start Finish
Finish: Sun 7/15/18 - Sat
7/21/18 5d
Selection of the
Research Topic 1 wk Sun 7/15/18 Thu 7/19/18
Finish: Sun 7/22/18 - Sat
7/28/18 42.5d
Approval of the
Research Topic 0.5 wks Fri 7/20/18 Tue 7/24/18
Researching and the
development of the
Research Aims and
Objectives
4 wks Tue 7/24/18 Tue 8/21/18
Preliminary
investigation 3 wks Tue 8/21/18 Tue 9/11/18
Assembling all the
Preliminary Data 1 wk Tue 9/11/18 Tue 9/18/18
Finish: Sun 7/29/18 - Sat
8/4/18 5d
Researching the Data 0.3 wks Tue 9/18/18 Wed 9/19/18
Compiling the data 0.4 wks Thu 9/20/18 Fri 9/21/18
Submission of the Draft 0.2 wks Mon 9/24/18 Mon 9/24/18
Continuation of the
Research 0.1 wks Tue 9/25/18 Tue 9/25/18
Finish: Sun 8/5/18 - Sat
8/11/18 2d
Assembling New
Information 0.4 wks Tue 9/25/18 Thu 9/27/18
Finish: Sun 8/12/18 - Sat
8/18/18 19d
Researching on the
avialable data 1 wk Thu 9/27/18 Thu 10/4/18
Compiling the total data 2.5 wks Thu 10/4/18 Mon 10/22/18
Assembling and the
Preparation of the final
report
0.2 wks Tue 10/23/18 Tue 10/23/18