Identifying public‐private partnership (PPP) risks in managing water supply projects in Ghana

Abstract

Purpose

The public‐private partnership (PPP) procurement approach enables the development and management of public infrastructure and services through leveraging private capital, management expertise, and creative commercial skills. This approach, pursued by the Ghanaian Government in the development and management of water supply services, contains a plethora of risks resulting from the complexity and dynamic interactions between municipal and central governments (pursuing monetary and political goals), public movements, private water operators, and international donors pursuing their own objectives. The paper seeks to increase awareness of the risks that can erode or reduce potential benefits of PPPs in the water supply sector.

Design/methodology/approach

A research approach integrating a literature survey and case study is adopted. A rigorous literature review of PPP risks is first undertaken. Based on six case studies carried out in the Ghanaian water supply sector, this paper identifies and categorises the risks specific to water supply PPP contracts in Ghana.

Findings

A total of 40 risk factors are identified, classified into eight categories based on their sources and their content presented in detail. Common risks which are worth practitioners' attention include weak regulatory and monitoring regime; financing; absence of risk allocation mechanisms; inexperience in PPPs; public opposition; delayed and non‐payment of bills, etc.

Originality/value

A comprehensive list of risks associated with water supply projects in Ghana has been identified. This list will aid practitioners, municipal and central government authorities, and the domestic and the (potential) international private sector audience in managing risks involved in such projects.

Citation

Effah Ameyaw, E. and Chan, A.P.C. (2013), "Identifying public‐private partnership (PPP) risks in managing water supply projects in Ghana", Journal of Facilities Management, Vol. 11 No. 2, pp. 152-182. https://doi.org/10.1108/14725961311314651