Risk allocation decision-making in public private partnership development projects in Zambia

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Mukalula, Peter Mwansa
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University of Zambia
In 2009, the Zambian government enacted the Public Private Partnership (PPP) Policy and Act No.14. The act was aimed at reversing stifled development across the country using private financing. Even with legislation in place, prospective developers often weigh risks of implementing PPP projects in Africa. For Zambia, unclear and protracted negotiation procedures have tainted the performance of such executed projects. Consideration of risk allocated to the developer influences decisions made regarding timely execution of projects. The research aimed to determine critical success factors and mitigation impacts used in successfully implemented PPP projects. Data gathered on risk allocation decision-making processes used a mixed research method that included structured interviews, a questionnaire survey and two case studies. Descriptive analysis, Rotated Component Matrix and Pearson Correlation Coefficients were used to establish relationships between independent and dependent variables for allocated risk. The ontological and epistemological philosophical basis of the researcher utilised a positivistic pragmatic constructionist analytical explanation of the PPP phenomena on two projects in Zambia. These were University of Zambia East Park Mall development and the Kasumbalesa Border infrastructure. The percentage survey response was 46% obtained from 47 analysed questionnaires out of the 120 that were administered. Results indicated professionals‟ inability to evaluate developer‟s risks particularly at the proposal assessment stage. The PPP contract outlines risk to the parties involved. Technically, project developers show greater preparedness during negotiations in bargaining for their allocated risk. Decisions made, therefore, were found not to consist of relevant inputs from areas of risk allocation and risk mitigation to ensure project success by those evaluating schemes. The research proposed a decision-making framework for the timely execution of such projects in Zambia. This decision-making framework would limit the time of implementing PPP projects from three to five years to less than two years and would cover all the phases, namely; the proposal submission, negotiation, the construction and operation stages. Keywords: Decision-making system, Public private partnership, Risk allocation
Public Private Partnership policy--Zambia