Risk Allocation in the Operational Stage of Private Finance Initiative Projects

Abstract

A qualitative analysis based on four private finance initiative (PFI) projects during the operational monitoring stage is demonstrated in this paper. The investigation focused on how the design and contractual risks were reflected and handled at the operational stage of the PFI projects. Some unforeseen project risks that occurred during the operational stage were highlighted, and more focus on the risk control of future PFI procurement from the various parties involved is recommended. The research process includes documentation review and a semistructured interview survey. It is found that the public sector still is liable to some unforeseen risks during the operational stage, although the private sector takes most of the risks according to the contract. Recommendations are made for further research and improvements on the PFI project management.