Risk Management Planning, Sustainability Risks Management, and Risk Stakeholders

Risk Management Planning, Sustainability Risks Management, and Risk Stakeholders

Copyright: © 2017 |Pages: 42
DOI: 10.4018/978-1-5225-2503-5.ch008

Abstract

Concepts in risk management in PPP projects have continuously evolved over the years. Introduction of new concepts, risk management planning, sustainability risk management and risk stakeholders, create a greater understanding of the acceptable workings of PPP projects. This chapter aims to investigate and compare these concepts in academic literatures and to the practices of PPP project implementations as exemplified in numerous PPP projects. This chapter reviews and analyzes information on these concepts. Extant literatures are reviewed and their take on the concepts are compared with the results obtained from the case studies. The chapter found both similarities and differences and also suggests some interesting researches on several key areas that should be emphasized for a better take in having an effective risk management strategy.
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Everyone is entitled to his own opinion, but not to his own facts. - Daniel Patrick “Pat” Moynihan

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Introduction

The aim of this chapter is to provide a literature survey and practical hints for PPP developers, partners and implementers in PPP implementation for three interrelated topics: risk management planning, risk sustainability and risk stakeholders. Its main focus is to critically assess the backgrounds of these topics, review practice and provide clues on their importance in the implementation of PPP projects. These topics form the core of PPP arrangement. Risk planning refer to the stance both partners adopt towards the functional mode in which the PPP arrangement ought to operate and the measures to be taken to implement the arrangement. risk sustainability usually attempt to influence the degree of a long lasting nature in which the PPP project is to hold, such as, attainment of the long-term greater good from a program. The term risk stakeholder refers to a set of individuals ‘gathered’ about a PPP project aiming at influencing the PPP project performance towards a desired objective. As all these topics affect PPP arrangement in one way or the other, boundaries between risk management planning, risk sustainability and risk stakeholders are not always clear. There seems to be a binding ‘cord’ between them. The nearer one can get to a demarcation line is arguably by referring to partner’s own perception of what they aim risk management planning, risk sustainability and risk stakeholders to be plus an underlying body of empirical/practical knowledge hopefully informing such perceptions. The partners’ objective is assumed to be the improvement on the successful implementation of PPP projects. This happens when the partners rightfully understand the roles and position in the PPP arrangement and that their actions is taking place a pace preferably faster than in lagging behind in implementing PPP projects. Risk management planning is believed to be the most important contributor to the success of PPP project, its positive link with sustainability, and even its close link with risk stakeholders. It follows that a partner wishing to improve its performance in a PPP arrangement will be well advised to design measures that lead to efficient allocation of resources and equitable share of risks. There is a universal agreement among development practitioners that risk sustainability in PPP project implementation can be a potent means of facilitating the desired objective. However, views differ as the role, the function, the responsibilities and even the nature of involvement of stakeholders in the process. In is not possible or even useful to discuss all these issues in detail in this chapter, but a bird’s eye view of alternative perspective can facilitate understanding, including the link between risk management planning, risk sustainability and risk stakeholders.

The following section deals with risk planning in theory and practice while the next section deal with risk sustainability and provide guidance on ways of sustaining risk management in a PPP project. The section on risk stakeholders discusses the dynamics of stakeholders in a PPP arrangement. The final section has a conclusion.

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