Identifying and Assessing Suspension Risks of Public Infrastructure Projects

Abstract

Purpose: The long construction period of public infrastructure projects increases the probability of facing political and economic turmoil, which might be triggered by national and/or international instabilities. Combined with the chronic peculiarity of these projects, such as delays and cost overruns, political and economic turmoil could lead to the temporary suspension of public infrastructure projects since the governments and/or public authorities fail to allocate sufficient financial resources. However, suspension decision for public infrastructure projects poses a wide range of risks that are widely neglected in the literature. Thus, this study proposes a suspension risk management framework by identifying and assessing the risks that may arise after the suspension of public infrastructure projects. The study also investigates perception differences among the leading stakeholders of the public infrastructure projects to ensure that the stakeholders could formalize shared risk response strategies. Initially, a comprehensive literature review and focus group discussion (FGD) sessions were conducted to identify the suspension risks. Next, the questionnaire survey and fuzzy TOPSIS analysis were jointly implemented to determine the significance of each risk. Finally, Cronbach's alpha analysis and the Mann-Whitney U test were implemented to examine the reliability of the dataset and the perception differences. The results indicated that the suspension decision of infrastructure projects has financial, technical, managerial, social, and environmental implications. Therefore, the suspension risks proposed in this study should be analysed deeply before the suspension decision is given. Besides, the results pinpointed risks such as Uncertainties due to constant changes in the contract, Financial losses arising from the judicial and/or alternative dispute resolution processes, and Administrative difficulties in obtaining financing in the re-starting period as the most critical suspension risk factors, necessitating urgent and comprehensive risk response strategies. Lastly, the Mann-Whitney U test validated that the proposed framework could be implemented by contracting parties to formulate shared risk response strategies in infrastructure projects.