Good project governance for proper risk allocation in public-private partnerships in Indonesia

Abstract

Parties that are involved in an infrastructure project under public-private partnership (PPP) procurement system typically have different perceptions of proper risk allocation. Consequently, disputes may arise between those parties thus reducing the chances for the project's success. Moreover, PPP projects are generally challenged with both project management problems which require day-to-day supervision (short-term) as well as partnership problems which require more of a strategic approach (long-term). Consequently, PPP projects can be considered to have governance concerns because they deal with monitoring and overseeing strategic direction as well as strategic decision-making. This research is conducted to discover the perception of proper risk allocation of each party involved and utilises the findings as the foundation to develop the concept of good project governance. Accordingly, this concept will perform as a mean to achieve proper risk allocation in tollway projects that are developed under PPP procurement system which would enhance the project's performance. A case study research on a tollway project in Indonesia is carried out for this purpose and the preliminary results of the analysis are presented in this paper. © 2006 Elsevier Ltd and IPMA.