Fuzzy AHP-Based Risk Assessment Methodology for PPP Projects

Abstract

Public Private Partnerships (PPPs) have been used globally as a method to procure infrastructure projects, such as expressways, bridges, water plants, and power plants. The risks involved in such PPP projects are unique because of the large amount of investment and long contractual concession period. This paper proposed a fuzzy analytical hierarchy process (AHP) as risk assessment technique to simulate the vagueness of human judgement and to improve the assessment accuracy. Furthermore, a comparison was made between the proposed fuzzy AHP and straight-AHP in this paper. The fuzzy AHP process was illustrated by using an actual PPP expressway project from China. The results showed that planning deficiency, low project residual value (after 30 years of operation), lack of qualified bidders, design deficiency, and long project approval time were assessed as the top five risks for the project, and the feedback from the experts showed that these results reflected the actual project risk situation.