A Research Framework for Developing an Equitable Risk Sharing Mechanism for Public-Private Partnership (PPP) Projects in the People's Republic of China (PRC)

The People's Republic of China (PRC) is one of the most densely populated countries in the world. The forecast urban population in the PRC would increase to 827 million in 2025. To alleviate the negative impact of unorganized urbanization growth, mass rapid transit has been prioritized as a key transport mode in mega cities. Other public facilities are also in high demand to cope with the increasing urbanization growth. However, inadequate government funding may limit the development of these projects. Public Private Partnership (PPP) financing modalities have been identified as innovative tools for financing major infrastructure projects. Earlier research work indicated that a fair risk allocation amongst the stakeholders is essential for the success of PPP projects; however, actual empirical research on the ground is limited. The contents in this paper is based on the original proposal for the funding application of this study which is funded jointly by the Research Grants Council of the Hong Kong Special Administrative Region and the National Science Foundation Council Research Grant of China. This study aims to develop an equitable risk allocation mechanism for the delivery of PPP projects in the PRC. A two-round Delphi survey will be conducted to identify the principal risk factors and their preferred party to allocate the risk. Furthermore, face to face interviews will be carried out to evaluate the impact and actual allocation of the principal risk factors. Finally an equitable risk sharing mechanism will be developed and validated by a series of focus group meetings before proposing for implementation in the PRC.