An enhanced multi-objective optimization approach for risk allocation in public–private partnership projects: a case study of Malaysia

Abstract

The decision making for risk allocation problems in public–private partnership (PPP) projects is a vital process that directly affects the timeliness, cost, and quality of the project. Fair risk allocation is a vital factor to achieve success in the implementation of these projects. It is essential for private and public sectors to apply efficient risk allocation approaches to experience a more effective process of agreement arbitration and to reduce the appearance of dispute during the concession period. The aim of this study is to develop an optimization approach to enhance risk allocation process in PPP projects. The shared risks in projects are identified through comprehensive literature review and questionnaire survey obtained from Malaysian professionals involved in PPP projects. Objective functions are then developed to minimize the total time and cost of the project and maximize the quality while satisfying risk threshold constraints. The combinatorial nature of the risk allocation problem describes a multi-objective situation that can be simulated as a knapsack problem (KP). The formulation of the KP is described and solved applying genetic algorithm (GA). Due to the flexibility of GA, the results are Pareto Optimal solutions that describe the combinations of risk percentages for shared risks in PPP projects.

A Fuzzy Analytic Network Process Method for Risk Prioritization in Freeway PPP Projects: An Iranian Case Study

“…In this regard, mean analysis was used for determining the mean of frequency and risk impact. Mean can be calculated using SPSS according to the formula below (Alireza et al 2013):…”

“…Risk scores are determined by multiplying the mean of frequency and the mean of risk impact shown as follows (Alireza et al 2013):…”

“…The primary result of this step was to genarete a list of possible important risks. Data were collected through the previous studies on PPP highway projects (Ebrahimnejad et al 2010;Heravi, Hajihosseini 2011;Karim, Alkaf 2011;Li, Zou 2011;Mousavi et al 2011;Xu et al 2010;Alireza et al 2013). As a result, 81 risks were identified.…”

A Swara-Copras Approach to the Allocation of Risk in Water and Sewerage Public–private Partnership Projects in Malaysia

“…Therefore, it is necessary to broadly consider the criteria and barriers of risk allocation to achieve appropriate risk allocation (Valipour, Mohammadi, Yahaya, Sarvari, & Noor, 2014;Grasso & Soldo, 2017). It is also essential for public and private sector parties to apply efficient risk allocation approaches in PPP projects to experience a more effective process of agreement arbitration and to reduce the occurrence of disputes during the concession period (Alireza, Mohammadreza, Zin, Yahaya, & Noor, 2013).…”

Genetic Algorithm of Network Graph Multi-Objective Optimization as an Instrument of Project Monitoring

“…-allocating fixed and variable parts in total expected expenses is possible not for every project task (Yang, 2007); -exact calculation of the missed benefit, as a rule, is an exigent task; -using the restriction demanding delegation to one executor of only one work during the concrete moment of time is not always correct, for example, in case of outsourcing, since the companies that are ready to carry out some of project tasks may be engaged in several works simultaneously (Alireza et al, 2014); -many projects are characterised by lack of linear dependence between time and project cost, and exact expression of criterion function showing the project duration of the project through criterion function of project costs is impossible.…”