PUBLIC-PRIVATE PARTNERSHIP RISKS AND THEIR MANAGEMENT
The article provides definition of a risk in the Public-Private Partnership (PPP) as an unpredictable change in the overall project result, which jeopardizes the feasibility of its implementation. In turn, PPP risk management should be understood as a set of measures, principles, methods and tools of influence that can reduce uncertainty in the implementation of PPP projects.
The article assesses risks that occur in Public-Private Partnership during the life cycle of infrastructure projects. Risks are the main factor in deciding which model of Public-Private Partnership to use in order to achieve efficient results.
It is proposed to identify and classify risks in accordance with project lifecycle. Therefore, the main risk categories can be defined as following: risks associated with feasibility study; risks associated with financing; risks associated with design; risks associated with construction; risks associated with operating and risks associated with transfer of the infrastructural asset.
Algorism of managing risks efficiently in Public-Private Partnership was proposed in the article, which consists of five stages: analysis of the business environment, categorization of identified risks, their analysis, choice of response strategy and monitoring. The easiest and the most time-efficient way of analysis of the business environment is SWOT-analysis. It was also emphasized in the article that risk management is a continuous process and, therefore, risks should not be analyzed only in the beginning of project implementation. Response strategies in efficient risk management include: risks acceptance, risk transfer, avoidance and mitigation. Balanced and efficient risk distribution between public and private sectors is key to successful project implementation. If risks are not distributed correctly the project may be implemented with delays and budget overruns or not implemented at all.
It was proposed in the article to use risk register in order to portray the all the risks that are associated with the project and manage them. Proposed risk register form was shown in the article as well. Typical risk register should include: risk status, risk description, risk owner, risk triggers and symptoms, proposed response strategy and further actions. Risk register should be filled by each side.
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Keywords: public-private partnership, risks, risk management, public-private partnership risk analysis, risk register, risk assessment |
RISK MANAGEMENT
Yaroshenko Lesia
postgraduate SHEI «Kyiv National Economic University named after Vadym Hetman»
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