John F. Y. Yeung

Empirical Study of Risk Assessment and Allocation of Public-Private Partnership Projects in China

Earlier research studies on public-private partnership (PPP) indicated that an objective, reliable, and practical risk assessment model for PPP projects and an equitable risk allocation mechanism among different parties are crucial to the successful implementation of these PPP projects. However, actual empirical research works in this research area are limited. This paper reports the first stage of a research study, which aims to identify and assess the principal risks for the delivery of PPP projects in China and to address their proper risk allocation between the private and public sectors. An empirical questionnaire survey was designed to examine the relative importance of different risk factors and to analyze the allocation of risk factors to different parties in PPP projects. A total of 580 questionnaires were sent out, and a total of 105 valid responses were obtained for data analysis. The Mann-Whitney U test is employed to investigate whether significant difference in perception existed first between the private and public sectors and second between industrial practitioners and academics in China. The empirical findings show that the three most important risk factors for PPP projects in China are (1) government intervention; (2) government corruption; and (3) poor public decision-making processes. These findings reveal that the Chinese government intervention and corruption may be the major obstacles to the success of PPP projects in China. A major cause for these risks may be attributed to inefficient legislative and supervisory systems for PPP projects in China. After conducting the Mann-Whitney U test on the 105 survey respondents, the empirical findings indicate that the perceptions of all 34 risk factors in China between the private and public sectors were not significantly different. Similarly, there were no significant differences between academics and industrial practitioners except that the former perceived the problem of government corruption to be more severe than did the latter. For risk allocation, the empirical results indicate that the public and private sectors were in general consensus with most of the risks identified. The major risks that the public sector preferred to accept are within the systematic risk category, especially political, legal, and social risks. The private sector preferred to retain the principal risks within the specific project risk category, especially construction, operation, and relationship risks, in addition to economic risks within systematic risk category. The remaining risk, environment risk, is preferred to be shared between the two sectors. This research study enables international construction companies to better understand how risks should be assessed and allocated for PPP projects in China. It also assists in risk response planning and control for future PPP projects in China. DOI: 10.1061/(ASCE)ME.1943-5479.0000049.

Overview of the Application of “Fuzzy Techniques” in Construction Management Research

During the last decade, “fuzzy techniques” have been increasingly applied to the research area of construction management discipline. To date, however, no paper has attempted to summarize and present a critique of the existing “fuzzy” literature. This paper, therefore, aims to comprehensively review the fuzzy literature that has been published in eight selected top quality journals from 1996 to 2005, these being Journal of Construction Engineering and Management, ASCE; Journal of Management in Engineering, ASCE; Construction Management and Economics; Engineering, Construction and Architectural Management; International Journal of Project Management; Building Research and Information; Building and Environment; and Benchmarking: An International Journal. It has been found that fuzzy research, as applied in construction management discipline in the past decade, can be divided into two broad fields, encompassing: (1) fuzzy set/fuzzy logic; and (2) hybrid fuzzy techniques, with the applications in four main ca...

Critical Analysis of Partnering Research Trend in Construction Journals

AbstractOver the past two decades, significant literature has been dedicated to research studies on construction partnering and related issues, and a plethora of underlying theories and industrial practices on partnering application have been reported. This paper aims to explore, analyze, and summarize the research trend of partnering related studies in construction using desktop search method from several leading construction-related journals. On the basis of an extensive and rigorous literature review, a series of partnering related journal articles published from 1989 to 2009 were analyzed in terms of the annual number of partnering related publications, the level of contributions made by various institutions and regions, and the research focus on their studies. A critical analysis of the reported literature revealed that, in general, the number of partnering related publications in these journals has been increasing from 1989 to just before 2007 when the number of publications the peaked. The findings...

Establishing quantitative indicators for measuring the partnering performance of construction projects in Hong Kong

Research into Key Performance Indicators (KPIs) for partnering projects in construction becomes vital because an increasing trend of client organizations has been observed to introduce a partnering approach to their building and construction works internationally during the last decade. A Partnering Performance Index (PPI) has been developed for construction projects in Hong Kong. The PPI can assist in developing a benchmark for measuring the performance of their partnering projects. However, it is worth noting that assessors may have their own semantic interpretations on each KPI. The aim of this paper is to establish suitable quantitative indicators (QIs) and reasonable quantitative ranges (QRs) for each KPI in order to avoid any possible discrepancies in interpreting the meaning of each KPI and provide objective evaluation results based on quantitative evidence. By conducting five structured face‐to‐face interviews and two rounds of a Delphi questionnaire survey in Hong Kong, a set of QIs were developed to measure the seven most important KPIs, including: (1) time performance; (2) cost performance; (3) top management commitment performance; (4) quality performance; (5) trust and respect performance; (6) effective communications performance; and (7) innovation and improvement performance. The identified QIs and QRs could assess and compare different partnering projects on a common basis objectively, thus helping to set a benchmark for measuring the performance level of partnering projects in Hong Kong. Construction senior executives and project managers can thus apply the QIs and QRs to measure, evaluate and improve the existing performance of their partnering projects in order to strive for construction excellence.

A critical review of performance measurement in construction

Purpose – The purpose of this paper is to critically review the literature of performance measurement both in general and in the construction industry in particular. By doing so, it seeks to provide valuable insights into how to construct a comprehensive performance measurement model for the construction industry.Design/methodology/approach – Based on a comprehensive literature review on performance measurement, the paper presents a critical review of the development of performance measurement, with a special focus on the construction sector. The strengths and weaknesses of most previous measurement frameworks and techniques are investigated. Performance information that each can generate is analyzed in the context of the construction industry.Findings – The research findings showed that performance measurement studies in construction can be divided into three levels: project, organizational, and stakeholder levels. In addition, the major frameworks of performance measurement in construction were found to...

Identification and Allocation of Risks Associated with PPP Water Projects in China

As part of a comprehensive research into PPP implementation, nine case studies were scrutinized to explore the critical risks influencing the success of PPP water projects in China. Eleven critical risks were identified from real-life risk events through the content analysis. They were further analyzed in the aspects of risk origin and their allocation mechanism. It has been found that the government risks are considered as the most critical risks encountered by the Chinese project practitioners. To allocate risk, industrial practitioners should not only take into account of their management capability, but they should also pay more attention to the overall balance of risks and benefits, and risk guarantee through rigorous contract structure. The findings presented here are believed to enable interested investors to better understand the risks of PPP water projects in China.

Identification of key competences of design‐builders in the construction market of the People’s Republic of China (PRC)

Design‐builders play a vital role in the success of DB projects. In the construction market of the People’s Republic of China, most of the design‐builders, however, lack adequate competences to conduct the DB projects successfully. The objective of this study is, therefore, to identify the key competences that design‐builders should possess to not only ensure the success of DB projects but also acquire the competitive advantages in the DB market. Five semi‐structured face‐to‐face interviews and two rounds of Delphi questionnaire survey were conducted to identify the key competences of design‐builders. Rankings have been assigned to these key competences on the basis of their relative importance. Six ranked key competences of design‐builders have been identified, namely: (1) experience with similar DB projects; (2) capability of corporate management; (3) combination of building techniques and design expertise; (4) financial capability for DB projects; (5) enterprise qualification and scale; and (6) credit records and reputation in the industry. The design‐builders can make use of the research findings as guidelines to improve their DB competence. These research findings will also be useful to clients during the selection of design‐builders.

Developing a Fuzzy Multicriteria Decision-Making Model for Selecting Design-Build Operational Variations

Many academic researchers have conducted studies on the selection of a design-build (DB) delivery method; however, there are few studies on the selection of DB operational variations, which pose challenges to many clients. The selection of a DB operational variation is a multicriteria decision-making process that requires clients to objectively evaluate the performance of each DB operational variation with reference to the selection criteria. This evaluation process is often characterized by subjectivity and uncertainty. To resolve this deficiency, the current investigation aimed to establish a fuzzy multicriteria decision-making (FMCDM) model for selecting the most suitable DB operational variation. A three-round Delphi questionnaire survey was conducted to identify the selection criteria and their relative importance. A fuzzy set theory approach, namely, the modified horizontal approach with the bisector error method, was applied to establish the fuzzy membership functions, which enables clients to perf...

A computerized risk evaluation model for public-private partnership (PPP) projects and its application

PPP projects usually involve more risks than other traditional procurement models because of their complexity. This paper presents the third stage of a funded study, which aims to develop a practical and computerized risk evaluation model for PPP projects. In the first and second stages, a risk hierarchal structure composed of 17 weighted risk factors is developed to describe risk profiles of PPP projects. The weightings and membership functions for risk factors are established using the Delphi survey technique and Fuzzy Set Theory. The risk evaluation model is then developed using a fuzzy synthetic evaluation approach. In the third stage, an automated decision support tool based on the risk evaluation model is designed for PPP practitioners by using Visual Basic for Application (VBA). The computerized tool can not only assist PPP participants to assess a PPP projects overall risk level for auxiliary investment decision, but can also help practitioners to identify the most risky areas of a PPP project for effective risk response. To demonstrate the applicability of the computerized model, an illustrative case is finally provided.

Fuzzy Set Theory Approach for Measuring the Performance of Relationship-Based Construction Projects in Australia

AbstractResearch into performance measures for relationship-based construction projects becomes crucial because of an increasing trend of client organizations to adopt a relationship-based (or relational contracting) approach to their construction projects worldwide over the last decade. However, few, if any, comprehensive and systematic research studies focus on developing a comprehensive, objective, reliable, and practical performance evaluation model for relationship-based construction projects. A performance index (PI), which comprises eight weighted key performance indicators (KPIs) and a set of corresponding quantitative indicators (QIs) for measuring the performance of relationship-based construction projects have been developed in Australia. The PI and QIs can assist in developing a benchmark for measuring the performance of relationship-based construction projects. However, the establishment of a set of QIs cannot fully solve the subjectivity of performance evaluation. To remedy this deficiency, ...