Research On Risk Management Of PPP:A Case Of RD Company’s Water Treatment Project In Jiangmen City

As the administrative organization to manage public affairs,the government has always been responsible for providing public products and services and is the main participant and investor of infrastructure projects.Recent years have seen the growth of demand for public products,the emergence of supply gaps,the development of China’s market reforms,and the limit of financing huge investments in infrastructure projects.Due to those factors,the way of supplying public products and services has also changed.In addition to simply providing public products and services by the government,market mechanisms can also play a role in resource allocation in this regard.Driven by various policies,the concept of Public-PrivatePartnership(thereinafter referred to as PPP)has been widely accepted,and the participation of social capital has eased the financial pressure of local governments while effectively expanding the supply of public infrastructure and services.However,in the process of introducing PPP,the projects also face various problems.The implementation of good risk management and control based on the identification and analysis of project risks could guarantee the advancement of the project.Strengthening the risk management of the project is of great significance for applying PPP and leveraging its advantages.In this paper,a case study is carried out from the perspective of the risk management of the water treatment PPP project in Jiangmen City,Guangdong Province.With the elaboration of relevant theories,the paper first discusses the related issues and their impacts of this PPP project based on the actual situation of the heavily polluted water treatment process and the features of this specific project.The cases of the same kind of projects also offer some great references for these issues.Secondly,at the stage of risk identification,a comprehensive list of various key risk factors was established after the qualitative analysis of all kinds of factors.In the next step,the paper shows an indicator system for risk assessment constituted of 7primary factors and 34 secondary factors.Through a questionnaire of experts in the water treatment PPP project,the risk evaluation uses the analytic hierarchy process(AHP)to determine the weights of every indicator and it is used to assess the Jiangmen’s project.It is found that,compared with PPP projects in other sectors,the project of treatment of black and odorous water has its particularities and complexity.It faces many problems in the control of pollution sources and the division of treatment responsibilities,which affect the implementation of the project.The risk assessment results suggest that in the PPP project of water treatment,the impact of government risks and contractual governance risks is more critical.Among them,government behavior and changes in policies and laws are more prominent risk factors.Operational risks and construction risks also play an important role in the implementation of the project.It is necessary to focus on the quality of work and ensure reasonable profits during the operation period.Finally,based on risk assessment,relevant suggestions are put forward to perform better project risk management and support the operation of such kinds of projects.