Identification and Allocation of Risks Associated with PPP Water Projects in China/Su Kinijos Vandens Projektais, Pagristais Viesojo Ir Privaciojo Sektoriu Partneryste, Susijusiu Rizikos Rusiu Nustatymas Ir Paskirstymas (Report‪)‬

1. INTRODUCTION The construction engineering is beset with a high degree of risk due to its complexity, particularly in coordinating a wide range of disparate and interrelated skills and activities under the constraint of time and resources (Deviprasadh, 2007; Tieva and Junnonen, 2009; Leung and Hui, 2005). For PPP projects, such complexity is further compounded by its additional external uncertainties and the wide extension of the disciplines, public agencies and various stakeholders involved (Thomal et al., 2006). PPP stakeholders are exposed to high risks as projects typically involve high capital outlays, long lead times, and long-lived assets with little value in alternative use (Zayed and Chang, 2002). With PPP projects becoming increasingly complex, industrial practitioners have to rethink their measures to risk management within their projects and organizations (Carr and Tah, 2001). It is reported that a majority of PPP projects in China encountered cost overrun, schedule delay, or failed to deliver service as defined in the concession agreement (Zeng et al., 2008). The main causes for such predicaments include (1) a lack of effective risk evaluation procedure; (2) underestimation of the time and resource limit; (3) insufficient consideration of changes in project implementation; and (4) undervaluing the changes in exchange rates. The need for establishing an effective risk management for PPP projects is becoming more urgent (Choi et al., 2004).