Risk assessment framework of PPP-megaprojects focusing on risk interaction and project success

Public private partnership (PPP) is an institutionalized form of cooperation between public and private sectors through which actors develop mutual products and services. Few studies have assessed risk interaction and adopted risk path in PPP projects’ risk management. While such studies have contributed to risk assessment methodology, most of them have only focused on cost, time and quality. This paper uses structural equation modeling (SEM) to develop a risk assessment framework in PPP-megaprojects through focusing on risk interaction and stakeholders’ expectations. The SEM model outcomes include an approach for ranking risks and identifying several risk paths which can be used to offer proper risk responses. Moreover, the developed SEM model is applied to a real PPP-megaproject. The output of the SEM model was used to rank 32 identified risks and showed that these risks could affect the success of the project through 8 risk paths. Khoramabad-Polezal project study show that demand risk, as part of an uncompetitive tender risk path, was responded properly using least present value of revenue mechanism, but quality standard risk as a part of decrease in productivity and quality risk path did not respond properly and road quality during operation stage decreases consequently.