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A Bayesian Belief Network Model for Assessing Financial Risk in PPP Healthcare Projects

Author

Listed:
  • Alper Aslantas

    (Civil Engineering Department, Middle East Technical University, Ankara 06800, Türkiye)

  • Irem Dikmen

    (School of the Built Environment, University of Reading, Reading RG6 6UR, UK)

  • Mustafa Talat Birgonul

    (Civil Engineering Department, Middle East Technical University, Ankara 06800, Türkiye)

Abstract

Public-Private Partnerships (PPPs) are essential for accelerating sustainable development as they combine public goals with private sector efficiency, leading to improved service delivery and less financial burden on governments. It is a project delivery model based on long-term contractual arrangements, where the private sector provides services, including engineering, construction, and operation of public infrastructure, taking financial risks. At the project development stage, the private sector carries out a financial risk assessment to ensure economic returns from a PPP investment and secure funding for the project. In this paper, we present a Bayesian Belief Network (BBN)-based model that can be used to assess financial risks, particularly the level of profitability in PPP projects. The proposed model was developed considering PPP projects in the healthcare sector and validated using data on PPP hospital projects in Turkiye. The findings demonstrate that the BBN model is useful for capturing the interdependencies between risks, resulting in different scenarios, and provides effective decision support for investors in PPP projects. This study contributes to the literature by offering a novel application of probabilistic risk assessment to provide a better understanding of interrelated risk factors that may result in different financial scenarios. The model can be used by the private sector to assess risk, estimate profitability, and develop risk mitigation strategies in PPP healthcare projects, which may increase project success, contributing to social, environmental, and economic sustainability.

Suggested Citation

  • Alper Aslantas & Irem Dikmen & Mustafa Talat Birgonul, 2025. "A Bayesian Belief Network Model for Assessing Financial Risk in PPP Healthcare Projects," Sustainability, MDPI, vol. 17(10), pages 1-19, May.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:10:p:4635-:d:1658749
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    References listed on IDEAS

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