Risks in PPP Water Projects in China: Perspective of Local Governments

Abstract

In the last decade, China has implemented more public–private partnership (PPP) projects in the water sector compared to other sectors. However, efficient management of risks in these projects remains problematic. While there have been many studies that have examined risks associated with PPPs in China, the experience of local governments with risks has received little or no attention in the literature. Moreover, the stages at which the risks are significant and how these risks are interrelated have not been researched. This paper examines risks as experienced from the local government’s perspective and how they manifest across five PPP stages: (1) feasibility, (2) procurement, (3) construction, (4) operation, and (5) transfer. The interrelationship between the risks across the PPP stages is also examined. Data was collected via questionnaire surveys and interviews, and it was analyzed using quantitative and qualitative analysis. The findings reveal critical risk for local governments and how their impacts vary across project stages. Some of the risks influence other risks both within and across the five PPP stages. The findings provide significant insight into the dynamic nature risks in PPP water projects, which has important implications for practitioners when developing risk mitigation strategies.