Political and legal risks in public-private partnership mega transportation projects

Abstract

In Public-Private-Partnership (PPP) projects, all stakeholders may be exposed to losses due to changes in political and legal environment which certainly affect the success targets of the PPP projects. Hence, this paper aims to determine political and legal risks and identify the effect of those risks on the success of PPP mega transportation projects. Thus, the risks were determined within a systematic literature review and focus group discussion were carried out for validation. Then, an illustrative case study in Turkey was presented to better illustrate the effects of political and legal environment. Finally, Fuzzy Analytical Hierarchy Process (FAHP) method was used to identify the significance of the identified risks. The prominent risks were found out as termination of concession by public institution, political opposition, failure/delay in obtaining permit/approval and expropriation. The evolution of determined risks with an associated case from a mega transportation project contributes to the PPP project practitioners about possible challenges in developing countries where political and legal instability is widespread. Considering the focus on transportation projects constitutes the limitation of this study, the research opens future evaluations by testing identified political and legal risks for other different kind of PPP-type projects to identify if any different perceptions exist.