A canvas model for risk assessment and performance estimation in public–private partnerships

Kadir Kuru, Deniz Artan*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

21 Citations (Scopus)

Abstract

Public-private partnership (PPP) is being widely used to meet the growing infrastructure and service demand. However, previous literature draws attention to distressed or failed PPP projects due to significant risks. In the quest for assessing risks and estimating the performance at the outset of a project, there is a need for a practical tool allowing in-depth analysis of the project conditions. This paper aims to develop a PPP Canvas which enables assessment of the project risk factors and determining the related compensation mechanisms that can be used to mitigate these risks or allocate them to the parties in a balanced way. The Canvas also helps to estimate a project performance score based on the significance coefficients determined by the Analytical Hierarchy Process. AHP results show that stability of economic environment, political support and government intervention are the most important risk factors in the local context. AHP can be repeated for each specific PPP project, as part of the PPP Canvas process, to foster discussion and analysis of the risks and compensation mechanisms across different geographical locations and PPP project types. The paper adds a new dimension to PPP risk assessment by making use of the Business Model Canvas approach and the inclusion of contractual compensation and penalty mechanisms. As the stakeholders become more informed of the project conditions and the risks involved, they can make better decisions throughout the project life-cycle and can benefit from the identified compensation mechanisms in contract drafting.

Original languageEnglish
Pages (from-to)704-719
Number of pages16
JournalInternational Journal of Construction Management
Volume20
Issue number6
DOIs
Publication statusPublished - 1 Nov 2020

Bibliographical note

Publisher Copyright:
© 2020, © 2020 Informa UK Limited, trading as Taylor & Francis Group.

Keywords

  • analytical hierarchy process (AHP)
  • compensation mechanisms
  • contract drafting
  • critical success factors
  • performance estimation
  • Public-private partnerships (PPP)
  • risk assessment
  • risk factors

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