Determining the Critical Risk Factors of Implementing Public–Private Partnership in Water and Wastewater Infrastructure Facilities: Perspectives of Private and Public Partners in Iran

Abstract

Due to the fact that risks can cause project delays and increase project implementation costs, successful construction project completion requires effective and holistic risk management. Identification and evaluation of critical risk factors (CRFs) associated with different types of projects are the most significant components of accurate risk management. This study aims to identify and evaluate the CRFs inherent with private–public partnership (PPP) projects specifically for the development of water and wastewater infrastructure (WWI) facilities in the developing country of Iran. In this line, a comprehensive literature analysis was undertaken to extract the CRFs in applying PPP projects for the development of infrastructure projects in developing countries in general. Then, four rounds of a Delphi survey were conducted to consolidate the major risks to the circumstances of Iran and WWI facilities. There were a total of 35 risks that were grouped into six categories. The main risks were then analyzed and ranked using the Measurement Alternatives and Ranking according to the Compromise Solution (MARCOS) technique. The overall ranking results of the various CRFs revealed that “lack of trust in government’s economic programs” risk was ranked first in terms of importance, followed by the risk of “delay in timely fund payment for project financing and credits,” and the risk of “delay in finalizing bank negotiations.” The overall ranking of the risks placed “economic changes, such as inflation, increase or decrease in prices, and exchange rate” risk in the bottom position. According to the risk ranking findings based on the opinions of private experts, “lack of commitment to the project schedule” was placed first. Conversely, experts from the public sector considered “choosing the wrong financing method” to be the most CRF. It is anticipated that the key research findings and effective recommendations of this study will considerably contribute to the smooth development and remarkable improvement of risk management in applying PPP for WWI facilities in developing countries while enhancing different stakeholders’ understanding of the CRFs for PPP projects, particularly towards WWI services in Iran.