Jurnal Pengurusan 54(2018) 101 – 114 https://doi.org/10.17576/pengurusan-2018-54-09 Risk Management in the Malaysian Public Private Partnership Projects (Pengurusan Risiko di dalam Projek Perkongsian Persendirian Awam Malaysia) Usman Ahmad Yusnidah Ibrahim Arpah Abu Bakar (School of Economics, Banking and Finance, Universiti Utara Malaysia) ABSTRACT The Malaysian government has been implementing Public Private Partnership (PPP) program since 1980s for infrastructure development. The literature shows that quite a number of PPP projects failed to achieve their objectives due to lack of risk management. Nonetheless, literature on risk management process for different type of PPP projects is lacking. In addition, the literature does not provide the robust measurements to study PPP risk management as a variable in the feld of risk management. Therefore, this study aims to describe risk management practices for PPP projects in Malaysia. To facilitate the empirical research, the current study develops a set of items for describing PPP risk management processes by employing exploratory sequential research design. The fndings show existence of some forms of risk management in PPP projects where the agreement and design concept form a vital role in risk management. Keywords: Public private partnerships; agreement; design concept; risk management ABSTRAK Kerajaan Malaysia telah melaksanakan Perkongsian Persendirian Awam (PPA) sejak tahun 1980 untuk pembangunan infrastruktur di negara ini. Kajian terdahulu menunjukkan beberapa projek PPA telah gagal mencapai objektif kerana ketiadaan pengurusan risiko. Walau bagaimanapun terdapat sangat sedikit karya mengenai proses pengurusan risiko untuk setiap jenis projek PPA. Tambahan pula, kajian terdahulu tidak menyediakan alat pengukuran yang mantap untuk mengkaji proses pengurusan risiko PPA sebagai pemboleh ubah dalam bidang sains sosial. Untuk membolehkan perlaksanaan kajian empirikal ini, satu set item pengurusan risiko telah dibangunkan melalui kaedah penyelidikan secara jujukan penerokaan. Penemuan kajian menunjukkan kewujudan amalan pengurusan risiko dalam projek-projek PPA, di mana konsep perjanjian dan konsep kaedah memainkan peranan penting. Kata kunci: Perkongsian persendirian awam; perjanjian; konsep kaedah; pengurusan risiko INTRODUCTION The Malaysian government aims to promote the involvement of private sector for the provision of public services by using Public Private Partnership (PPP) (Ismail 2013a). Various factors such as increased innovation, reduction of public money tied up in capital investment, reduction of the total project cost, and local economic development, attract the Malaysian government to apply PPP as a tool for provision of infrastructure and public services (Ismail 2013b). In PPP projects a private concessioner designs, constructs and maintains the facility, and after the concession period, the ownership is transferred to government except in a few models of PPP (Ahmad, Ibrahim & Abu Bakar 2018a, 2018b). Despite the benefts of PPP, quite a few numbers of PPP projects in Malaysia failed to achieve the desired objectives (Mohamad, Ismail & Said 2018). The National Audit Report (“Auditor General’s Report” 2012, 2015 & 2016) highlights the issues of delay in constructions, lack of monitoring and risk management in the Malaysian PPP projects. Similarly, for Malaysian e-government PPP projects, Khadaroo, Wong and Abdullah (2013) reported the barriers that hinder the project objectives such as lack of clarity in contract, relationship risks and inaccurate costs assessment. All these issues are extreme risks for Malaysian PPP projects (Ahmad, Ibrahim & Minai 2017). Several studies have identifed that organizations that are involved in PPP have not adopted proper risk management (Keers & Van Fenema 2018; Markom 2012). Likewise, for Malaysian Light Rail Transit (LRT) PPP project, Markom (2012) and Mottain (2017) reported the lack of risk management in handling demand risk, design risks and risk of technical feasibility. Keers and Van Fenema (2018) claims that recent literature on risk management of PPP mostly emphasizes on risk identifcation and allocation as the strategy to manage the risks while few studies consider only risk identifcation (Ahmad et al. 2018; Hwang, Zhao & Gay 2013). Moreover, studies on PPP around the globe focused on risk ranking or risk allocation only (Li et al. 2005; Ahmad et al. 2017). Apart from Fischer et al. (2010), the discussion on risk management in PPP projects is scant. Some researchers have suggested that a better understanding of risk management in PPP projects may lead to achieving the desired objectives (Fischer et al. JP 54(2018) Bab 9.indd 101 5/8/2019 9:36:14 AM