Exploring Public and Private Sector Perspectives on Risks in Highway PPP Projects

Abstract

Despite the existence of established contractual frameworks and risk-sharing provisions in infrastructure public–private partnerships (PPPs), disputes and renegotiations remain frequent. This study investigates whether such disputes may originate from differences in how public and private entities perceive and evaluate risks. To facilitate comparison of perspectives, the study evaluates risks on three criteria, frequency (F), impact (I), and difficulty in management (DIM). Using a structured questionnaire, responses were collected from 95 experienced highway PPP professionals, representing both public and private entities. The collected responses were evaluated for risk severity (S) and DIM aspects individually and the statistical test was performed to identify significant perceptual divergences between both entities on each risk across both aspects (S and DIM). Out of the 30 risks considered for the study, the findings reveal that there are 10 risks—such as cost estimation, adverse site conditions, refinancing challenges, and asset handover—which the public and private entities view significantly differently. These divergent perceptions can influence contractual negotiations, hinder effective risk allocation, and ultimately affect project outcomes. By exploring the underlying reasons for such divergences and their possible implications, this study provides diagnostic insights into areas where contractual interpretation, risk communication, and institutional understanding may require greater alignment.