Public private partnership projects in Singapore: Factors, critical risks and preferred risk allocation from the perspective of contractors Bon-Gang Hwang a , Xianbo Zhao a, ⁎ , Mindy Jiang Shu Gay b a Department of Building, National University of Singapore, 117566, Singapore b Shimizu Corporation (Incorporated in Japan), 079120, Singapore Received 22 March 2012; received in revised form 1 August 2012; accepted 7 August 2012 Abstract Public private partnership (PPP) procurement was introduced into Singapore in 2003, and 10 PPP projects were successfully completed and have been in operation. This study aims to examine the critical success factors as well as the relative importance of positive and negative factors influencing the attractiveness of PPP projects in Singapore, and to identify the critical risk factors and preferred risk allocations for PPP projects in Singapore. The questionnaire survey results indicated that negative factors were more affirmative than the positive factors, and that 23 risk factors had significant criticalities. Eight risks would be preferably allocated to the public sector while 19 risks could be assigned to the private sector. 11 risks were preferred to be shared by both parties and the allocation of four risks depended on project circumstances. The findings of this study provide valuable information for organizations that intend to participate in PPP projects in Singapore. © 2012 Elsevier Ltd. APM and IPMA. All rights reserved. Keywords: Public private partnership; Critical success factors; Attractiveness; Risk criticality; Risk allocation 1. Introduction Public private partnership (PPP) has been widespread in infrastructure development in Asia and considered as an effective way to achieve better value for money in delivering infrastructure projects (Ke et al., 2010; Li et al., 2005b). Some countries have adopted PPP due to fiscal deficit, budgetary pressure, demand– supply gap, and inefficient public services to infrastructure, while other countries choose PPP for operational efficiency, innovative technological and management skills, and more active involve- ment of private players in public services (Chowdhury et al., 2011). The concept of PPP was introduced to Singapore in 2003 when the first PPP contract was awarded by the Public Utilities Board (PUB) for a desalination plant (Gunawansa, 2010). The Ministry of Finance (MOF) published the PPP Handbook in 2004, which provides the public and private sectors with the guidelines for successful structuring and management of PPP projects in Singapore. Subsequently, the government outsourced projects worth S$1.3 billion (S$1 ≈ US$0.79) to the private sector for the next 3 to 5 years (Li, 2006). 10 PPP projects were successfully completed and are in operation now, while three projects were terminated or on hold (Gunawansa, 2010; Weaver, 2010). The nature of PPP projects makes risk an important factor in the project procurement. Most PPP projects are involved with risks that are difficult to control and analyze. Hence, risk management is critical for both public and private parties in PPP projects to attain their objectives. In addition, it is necessary to balance the risks and rewards of public and private sectors in PPP projects (Grimsey and Lewis, 2002). Appropriate risk allocation was recognized as critical to successful PPP projects (Chan et al., 2010; Zhang, 2005) and should be done at the early stage of the projects. A commonly accepted principle is to ⁎ Corresponding author. Tel.: +65 9345 2665; fax: + 65 6775 5502. E-mail address: zhaoxb1984@gmail.com (X. Zhao). www.elsevier.com/locate/ijproman 0263-7863/$36.00 © 2012 Elsevier Ltd. APM and IPMA. All rights reserved. http://dx.doi.org/10.1016/j.ijproman.2012.08.003 Available online at www.sciencedirect.com International Journal of Project Management 31 (2013) 424 – 433