The Relationship of Critical Risk Factors in Chinese PPP Projects: Modeling Perspective

Public Private Partnerships (PPPs) have been applied for twenty years in China. Many problems of PPP projects in China are related to unsuccessful risk management. This paper addresses modeling the critical risk factors (CRFs) that have been identified from the Chinese PPP projects based on a questionnaire survey. The aim of this paper is to find the relationship between the CRFs according to the classification of these CRFs during the lifecycle of Chinese PPP projects. The method of Structure Equation Model (SEM) is used to analyze the hypothesis. The results show that there are positive cause-and-effect collections between the physical and process-related CRFs and couple of positive interaction relationships within physical CRFs. The results suggest that the private sectors in Chinese PPP projects should keep long term and stable good relationship with Chinese government. On the other hand, the public sectors should also select the one who has the best capability to control the potential risks.