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Modelling and assessment of critical risks in BOT road projects

Author

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  • A. V. Thomas
  • Satyanarayana Kalidindi
  • L. S. Ganesh

Abstract

Over the years, many private sector participation (PSP) models have been evolved for infrastructure procurement and the Build-Operate-Transfer (BOT) model is one of the most common approaches used for the same. Private infrastructure projects under BOT arrangement have a complex risk profile and to a considerable extent, the success of any BOT project is influenced by the degree to which various project risks are managed. The major steps involved in risk management of a project are risk identification, risk assessment and the processes of prioritization and response to the risks. The conventional risk assessment approaches may not be effective in privatized infrastructure projects because of the fact that, they have very long project lifecycle with many country and sector specific risk factors. The assessment of complex risks is often a difficult task when past data on similar risks are not available. In this research, a risk probability and impact assessment framework based on fuzzy-fault tree and the Delphi method is proposed. The framework includes extensive scenario modelling of critical risks in projects and systematic processing of professional judgement (subjective knowledge) of experts and is developed and demonstrated in the context of critical risks in Indian BOT road projects. Detailed scenario modelling of most critical risks such as traffic revenue risk, delay in land acquisition, demand risk and delay in financial closure are also presented. The proposed risk assessment framework is generic and can be applied with appropriate modifications to suit any complex developmental project where past data is inadequate for risk assessment.

Suggested Citation

  • A. V. Thomas & Satyanarayana Kalidindi & L. S. Ganesh, 2006. "Modelling and assessment of critical risks in BOT road projects," Construction Management and Economics, Taylor & Francis Journals, vol. 24(4), pages 407-424.
    • Handle: RePEc:taf:conmgt:v:24:y:2006:i:4:p:407-424
    DOI: 10.1080/01446190500435275
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    Citations

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    Cited by:

    1. Feng, Zhuo & Zhang, Shui-Bo & Gao, Ying, 2015. "Modeling the impact of government guarantees on toll charge, road quality and capacity for Build-Operate-Transfer (BOT) road projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 78(C), pages 54-67.
    2. Abraham Park & Chen Yu Chang, 2013. "Impacts of Construction Events on the Project Equity Value of the Channel Tunnel Project," ERES eres2013_97, European Real Estate Society (ERES).
    3. Sy, Do Tien & Likhitruangsilp, Veerasak & Onishi, Masamitsu & Nguyen, Phong Thanh, 2016. "Impacts of risk factors on the performance of public-private partnership transportation projects in vietnam," MPRA Paper 96583, University Library of Munich, Germany.
    4. Jokar, Ebrahim & Aminnejad, Babak & Lork, Alireza, 2021. "Assessing and Prioritizing Risks in Public-Private Partnership (PPP) Projects Using the Integration of Fuzzy Multi-Criteria Decision-Making Methods," Operations Research Perspectives, Elsevier, vol. 8(C).
    5. Daniel W. M. Chan & Hadi Sarvari & Ahmad Abdul Jaleel Abdul Husein & Khalid Mubarak Awadh & Mahboobeh Golestanizadeh & Matteo Cristofaro, 2023. "Barriers to Attracting Private Sector Investment in Public Road Infrastructure Projects in the Developing Country of Iran," Sustainability, MDPI, vol. 15(2), pages 1-26, January.
    6. Guo, Jian & Luo, Cheng & Ma, Kaijiang, 2023. "Risk coupling analysis of road transportation accidents of hazardous materials in complicated maritime environment," Reliability Engineering and System Safety, Elsevier, vol. 229(C).
    7. Xiaoyan Jiang & Kun Lu & Bo Xia & Yong Liu & Caiyun Cui, 2019. "Identifying Significant Risks and Analyzing Risk Relationship for Construction PPP Projects in China Using Integrated FISM-MICMAC Approach," Sustainability, MDPI, vol. 11(19), pages 1-31, September.
    8. Hany Abd Elshakour Mohamed & Ahmed Ibrahim Eltohamy, 2022. "Critical Success Factors for Competitiveness of Egyptian Construction Companies," Sustainability, MDPI, vol. 14(17), pages 1-22, August.
    9. Yutong Xue & Pengcheng Xiang & Fuyuan Jia & Zhaowen Liu, 2020. "Risk Assessment of High-Speed Rail Projects: A Risk Coupling Model Based on System Dynamics," IJERPH, MDPI, vol. 17(15), pages 1-27, July.
    10. Norhana Danial & Mohd Saidin Misnan, 2022. "Possession of Site: Another Layer of Complexity in Road Construction," Sustainability, MDPI, vol. 14(11), pages 1-20, June.
    11. Akbari Ahmadabadi, Ali & Heravi, Gholamreza, 2019. "Risk assessment framework of PPP-megaprojects focusing on risk interaction and project success," Transportation Research Part A: Policy and Practice, Elsevier, vol. 124(C), pages 169-188.
    12. Khwaja Mateen Mazher & Albert P. C. Chan & Rafiq M. Choudhry & Hafiz Zahoor & David J. Edwards & Ahmed M. Ghaithan & Awsan Mohammed & Mubashir Aziz, 2022. "Identifying Measures of Effective Risk Management for Public–Private Partnership Infrastructure Projects in Developing Countries," Sustainability, MDPI, vol. 14(21), pages 1-19, October.
    13. Virgo Sulakatko & Frank U. Vogdt, 2018. "Construction Process Technical Impact Factors on Degradation of the External Thermal Insulation Composite System," Sustainability, MDPI, vol. 10(11), pages 1-26, October.
    14. Zhao, Zhen-Yu & Zuo, Jian & Zillante, George, 2013. "Factors influencing the success of BOT power plant projects in China: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 22(C), pages 446-453.
    15. Sy, Do Tien & Likhitruangsilp, Veerasak & Onishi, Masamitsu & Nguyen, Phong Thanh, 2016. "Different Perceptions of Concern Factors for Strategic Investment of The Private Sector in Public-Private Partnership Transportation Projects," MPRA Paper 96581, University Library of Munich, Germany.
    16. Yan Wang & Yujie Wang & Xiuyu Wu & Jiwang Li, 2020. "Exploring the Risk Factors of Infrastructure PPP Projects for Sustainable Delivery: A Social Network Perspective," Sustainability, MDPI, vol. 12(10), pages 1-26, May.
    17. Yorela Yenifer Esperilla-Niño-de-Guzmán & María de los Ángeles Baeza-Muñoz & Francisco Jesús Gálvez-Sánchez & Valentín Molina-Moreno, 2024. "Public–Private Partnership (PPP) in Road Infrastructure Projects: A Review of Evolution, Approaches, and Prospects," Sustainability, MDPI, vol. 16(4), pages 1-24, February.
    18. Babatunde, Solomon Olusola & Perera, Srinath, 2017. "Analysis of traffic revenue risk factors in BOT road projects in developing countries," Transport Policy, Elsevier, vol. 56(C), pages 41-49.
    19. Jalil Heidary Dahooie & Amir Salar Vanaki & Hamid Reza Firoozfar & Edmundas Kazimieras Zavadskas & Audrius Čereška, 2020. "An Extension of the Failure Mode and Effect Analysis with Hesitant Fuzzy Sets to Assess the Occupational Hazards in the Construction Industry," IJERPH, MDPI, vol. 17(4), pages 1-22, February.
    20. Sigal Kordova & Shimon Fridkin, 2021. "Risk Management for Defense SoS in a Complex, Dynamic Environment," Sustainability, MDPI, vol. 13(4), pages 1-17, February.
    21. Gatzert, Nadine & Vogl, Nikolai, 2016. "Evaluating investments in renewable energy under policy risks," Energy Policy, Elsevier, vol. 95(C), pages 238-252.

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