Modelling Risk Allocation Decisions in Public–Private Partnership Contracts using the Fuzzy Set Approach (original) (raw)

Fuzzy Hybrid Computing in Construction Engineering and Management, 2018

Abstract

Allocating risk in public–private partnership (PPP) projects based on public–private parties’ risk management (RM) capabilities is a condition for success of these projects. In practice, however, risks are allocated to these parties beyond their respective RM capabilities. Too much risk is often assigned to the private or public party, resulting in poor RM and costly contract renegotiations and terminations. This chapter proposes a methodology based on fuzzy set theory (FST) in which decision makers (DMs) use linguistic variables to assess and calculate RM capability values of public–private parties for risk events and to arrive at risk allocation (RA) decisions. The proposed methodology is based on integrating RA decision criteria, the Delphi method and the fuzzy synthetic evaluation (FSE) technique. The application of FSE allows for the introduction of linguistic variables that express DMs’ evaluations of RM capabilities. This provides a means to deal with the problems of qualitat...

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