Re-evaluating the risk costing agenda in PPP projects

Purpose The level at which risk is priced and the magnitude of risks transferred to the private sector will have a significant impact on the cost of the public–private partnership (PPP) deals as well as on the value for money analysis and on the section of the optimum investment options. The price o...

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Main Author: Almarri, Khalid (author)
Other Authors: Boussabaine, Halim (author)
Published: 2020
Subjects:
Online Access:https://bspace.buid.ac.ae/handle/1234/2383
https://doi.org/10.1108/BEPAM-12-2019-0141
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author Almarri, Khalid
author2 Boussabaine, Halim
author2_role author
author_facet Almarri, Khalid
Boussabaine, Halim
author_role author
dc.creator.none.fl_str_mv Almarri, Khalid
Boussabaine, Halim
dc.date.none.fl_str_mv 2020-11
2023-11-07T09:40:33Z
2023-11-07T09:40:33Z
dc.format.none.fl_str_mv application/pdf
dc.identifier.none.fl_str_mv Almarri, K. and Boussabaine, H. (2021), "Re-evaluating the risk costing agenda in PPP projects", Built Environment Project and Asset Management, Vol. 11 No. 1, pp. 22-37.
2044-124X
https://bspace.buid.ac.ae/handle/1234/2383
https://doi.org/10.1108/BEPAM-12-2019-0141
dc.language.none.fl_str_mv en
dc.publisher.none.fl_str_mv Emerald Publishing Limited https://www.emerald.com/insight/content/doi/10.1108/BEPAM-12-2019-0141/full/html
dc.relation.none.fl_str_mv Built Environment Project and Asset Management
https://www.emerald.com/insight/content/doi/10.1108/BEPAM-12-2019-0141/full/html
dc.subject.none.fl_str_mv PPP, risk management, risk costing, value for money
dc.title.none.fl_str_mv Re-evaluating the risk costing agenda in PPP projects
dc.type.none.fl_str_mv Article
description Purpose The level at which risk is priced and the magnitude of risks transferred to the private sector will have a significant impact on the cost of the public–private partnership (PPP) deals as well as on the value for money analysis and on the section of the optimum investment options. The price of risk associated with PPP schemes is complex, dynamic and continuous throughout the concession agreement. Risk allocation needs to be re-evaluated to ensure the optimum outcome of the PPP contract. Design/methodology/approach This paper provides a coherent theoretical framework for dealing with scenarios of potential gain and loss from retaining or transferring risks. Findings The outcome indicates that using the proposed framework will provide innovative ways of deriving risk prices in PPP projects using several risk determinants strategies. Practical implications In costing risks, analysts have to take into consideration the balance between the cost of risk transfer and the cost of losses if risk is retained. Originality/value This paper contributes to the PPP literature and practice by proposing a framework which is consistent with a risk allocation approach in PPP projects, where the key proposition is that risk pricing can overload project debt leading to loss of value.
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identifier_str_mv Almarri, K. and Boussabaine, H. (2021), "Re-evaluating the risk costing agenda in PPP projects", Built Environment Project and Asset Management, Vol. 11 No. 1, pp. 22-37.
2044-124X
language_invalid_str_mv en
network_acronym_str budr
network_name_str The British University in Dubai repository
oai_identifier_str oai:bspace.buid.ac.ae:1234/2383
publishDate 2020
publisher.none.fl_str_mv Emerald Publishing Limited https://www.emerald.com/insight/content/doi/10.1108/BEPAM-12-2019-0141/full/html
repository.mail.fl_str_mv
repository.name.fl_str_mv
repository_id_str
spelling Re-evaluating the risk costing agenda in PPP projectsAlmarri, KhalidBoussabaine, HalimPPP, risk management, risk costing, value for moneyPurpose The level at which risk is priced and the magnitude of risks transferred to the private sector will have a significant impact on the cost of the public–private partnership (PPP) deals as well as on the value for money analysis and on the section of the optimum investment options. The price of risk associated with PPP schemes is complex, dynamic and continuous throughout the concession agreement. Risk allocation needs to be re-evaluated to ensure the optimum outcome of the PPP contract. Design/methodology/approach This paper provides a coherent theoretical framework for dealing with scenarios of potential gain and loss from retaining or transferring risks. Findings The outcome indicates that using the proposed framework will provide innovative ways of deriving risk prices in PPP projects using several risk determinants strategies. Practical implications In costing risks, analysts have to take into consideration the balance between the cost of risk transfer and the cost of losses if risk is retained. Originality/value This paper contributes to the PPP literature and practice by proposing a framework which is consistent with a risk allocation approach in PPP projects, where the key proposition is that risk pricing can overload project debt leading to loss of value.Emerald Publishing Limited https://www.emerald.com/insight/content/doi/10.1108/BEPAM-12-2019-0141/full/html2023-11-07T09:40:33Z2023-11-07T09:40:33Z2020-11Articleapplication/pdfAlmarri, K. and Boussabaine, H. (2021), "Re-evaluating the risk costing agenda in PPP projects", Built Environment Project and Asset Management, Vol. 11 No. 1, pp. 22-37.2044-124Xhttps://bspace.buid.ac.ae/handle/1234/2383https://doi.org/10.1108/BEPAM-12-2019-0141enBuilt Environment Project and Asset Managementhttps://www.emerald.com/insight/content/doi/10.1108/BEPAM-12-2019-0141/full/htmloai:bspace.buid.ac.ae:1234/23832023-11-08T23:00:47Z
spellingShingle Re-evaluating the risk costing agenda in PPP projects
Almarri, Khalid
PPP, risk management, risk costing, value for money
title Re-evaluating the risk costing agenda in PPP projects
title_full Re-evaluating the risk costing agenda in PPP projects
title_fullStr Re-evaluating the risk costing agenda in PPP projects
title_full_unstemmed Re-evaluating the risk costing agenda in PPP projects
title_short Re-evaluating the risk costing agenda in PPP projects
title_sort Re-evaluating the risk costing agenda in PPP projects
topic PPP, risk management, risk costing, value for money
url https://bspace.buid.ac.ae/handle/1234/2383
https://doi.org/10.1108/BEPAM-12-2019-0141