به سوی بهبود تخصیص ریسک: بررسی ادراک ریسک گروه های ذینفعان استرالیا در مورد پروژه های عوارض راهداری مشارکت دولتی ـ خصوصی

This paper presents a qualitative assessment of the risk perceptions held by key Australian stakeholder groups in the context of tollroads operated under the public–private-partnership model. The findings confirm that experience accumulated in recent years has contributed toward the betterment of risk-sharing optimisation amongst the contracting parties. The knowledge acquired through in-depth interviews supports the common view that equitable risk sharing is the vital ingredient of value for money. The proposition that the private sector is better equipped to manage commercial risks involving economic decision making whilst risks that have embedded unquantifiable social and public values and those in the domain of public governance are best left with government alone, appears to be replete with refutable implications. Public perception is a malleable concept and should be managed by both sectors.

Public–private-partnership (PPP) tollroads are growing in popularity throughout the world. This is a response to the need to invest in road infrastructure as well as the constraints on public budgets that are increasingly focussing on sectors such as education, law and welfare where the private market is more ambivalent about its potential role. Roads in contrast have clear market returns and have attracted growing interest from the private sector at a time when governments are stretched in their ability and willingness to raise public debt. Hence PPPs have been broadly adopted by governments as a financial means to procure, including but not limited to, infrastructure-based road services. A specific rationale of such a procurement policy is that greater value for money (vfm) in the public interest can be obtained through transferring risk to the party that is least risk averse (HM Treasury, 2006, Partnerships Victoria, 2000 and WWG, 2006) and that is best positioned to manage it (cf., NSW Treasury, 2005). Numerous studies (cf., Ball et al., 2003, Corner, 2006 and Grimsey and Lewis, 2005) have asserted that risk sharing is the raison d’ être for vfm and risk transfer from the public sector to the private sector is prominent in PPPs (Li, Akintoye, Edwards, & Hardcastle, 2005a). On the other hand, the common concern shared amongst market players is that the ethos of optimal risk allocation that risk should be assigned to the party that is best able to manage it, has not been adhered to (see for example two studies that surveyed participants of PPPs: Grimsey and Lewis, 2005 and NAO, 2001). Road infrastructure is one of the most active markets of PPPs in Australia (cf., Ernst & Young, 2007), possibly because of its high levels of capital consumption and its relatively low political sensitivity.1 The tollroads in Sydney and Melbourne are shown in Fig. 1 and Fig. 2. Private capital is primarily explored as a funding mechanism to solve a transport network problem, be it putting in a missing link or upgrading a vital arterial route. PPP road concessions resemble the nature of a sale-and-lease-back finance lease whereby a government sells to a private consortium2 a usus fructus, i.e. the right to generate income from ownership (Buitelaar, Van der Heijden, & Argiolu, 2007), normally for a price named “upfront payment”, to finance, construct and operate an infrastructure asset and profit from the sale of ancillary services generated from that asset. The private operator is given the power to charge users directly,3 but (generally) has no financial recourse to government. In this light, tollroads are unique in the way that financial risk is transferred to the private sector with the cost of risk transfer borne by road users, and in the way in which government separates the financier and provider roles from its roles as the central planner and regulator. The PPP concession bundles the finance, creation, operation and maintenance of the asset into one single package. The bundling concept incentivises the private entity to apply innovation in the financing package and in design and construction, thus facilitating cost savings over the asset’s whole-of-life operation and maintenance. The concession period ranges from 30 to 99 years in order to enable the private concessionaire to recoup the cost of capital and earn a required rate of return (Chung, 2008). In theory, these transport concessions should shield government from traffic risk, financial risk, and operation and maintenance risk, hence better financial vfm. The extant literature suggests that the public sector and the private sector do not share a monolithic set of interests (Meyer & Miller, 2001), objectives (Li et al., 2005a), and expectations (Demirag & Khadaroo, 2008), with the implication being that different parties have different perceptions of risk and their capabilities of risk management differ. These (mis)perceptions can strongly influence the manner in which partners take on risks and price these risks (Ball et al., 2003 and Blanc-Brude and Strange, 2007). A number of empirical studies confirmed that perceptions held by different partners about risks, about the motives and behaviours of their opposing partners create significant complication in the negotiations of risk allocation which would undermine the success of PPP projects (Arndt, 2000, Asenova and Beck, 2003, Li et al., 2005b and Weihe, 2008). These observations raise an interesting question about the eventuality of equitable risk sharing between public and private sector partners. Despite the criticisms of the inequitable risk-sharing outcomes (cf., NSWAGO, 1994, NSWAGO, 1997, NSWAGO, 2000, Pollock et al., 2007 and Shaoul et al., 2006), PPPs are here to stay. Not only do they provide an additional source of funding, but they also extend efficiency gains from market competition to infrastructure-based public service deliveries. Therefore, if risks and expectations are managed properly with a true risk-sharing partnership spirit, the betterment of risk allocation is likely to eventuate. Two as yet unanswered questions within the literature are: i) in PPP tollroad contracts, what are the risk attributes that concern the public sector the most and, the private sector the most? and, ii) to what extent is the outcome of risk allocation between the public and private sectors influenced by risk perceptions of different stakeholder groups? The findings herein are the outcomes of a series of unstructured in-depth interviews with stakeholders in Australia who have been either directly or indirectly engaging in PPP road projects. In this paper, the two research questions are explored in five sections. The next section discusses the extent to which value for money can be materialised through risk sharing in PPPs by examining the empirical findings in the extant literature. Section 3 explains the research methodology. Section 4 investigates the two sectors’ capability of risk management and the role risk perceptions plays in allocating risks as perceived by the stakeholders being interviewed. Section 5 concludes with the findings and sets the scene for future inquiry.

This paper has investigated risk perceptions of PPP tollroads in the following dimensions: a) benefits and gains arising from PPP tollroads; b) the public/private sector’s capacity to manage risks; c) considerations that drive each party entering into a PPP tollway contract, and the extent to which these considerations influence their approach to negotiating risk allocation; and d) the process in which the levels of toll are determined. All participants felt strongly that significant value for money that is translated into commercial and social benefits has been generated by partnerships. Experience accumulated over time and across projects has contributed to the betterment of risk-sharing optimisation amongst PPP parties. Yet many PPP tollroads have experienced teething problems between the contracting parties as the result of misconceptions, and hence the misallocation of risks. Noticeable disparities over which a party should bear certain risks reveal the chronic tension between the public and private sectors in a number of areas. The matter of concern lies with the perception that certain risks are best left alone to the party that is understood to be ‘best able’ to manage those risks. Our investigations suggest that most risks should be best shared by both sectors even though they may be perceived to be in the domain of respective sector’s field of expertise. All participants confirmed that risk perceptions about which party is best able to manage certain risks bear a powerful influence on final risk allocation. Both sectors perceive that the private sector has developed sophisticated approaches to manage commercial risks, partly due to accumulated experience, and partly due to the increasing market competition. The most prominent commercial risks in tollroads are identified as traffic risk, financial risk and risks associated with ownership. The private sector’s capacity to cope with these risks is reflected in that: i) it is better equipped with traffic modelling expertise; ii) it has wider access to financial instruments to package the best deal to handle financial distress; and iii) it has greater incentive and operational flexibility to drive outcomes forward and achieve cost efficiency over the asset’s whole-of-life cycle. The private sector is most concerned with network risk, sovereign risk, force majeure, media risk, and risk of public misperception. They perceive that these risks are beyond their expertise and the public sector should have handled these risks in the manner that assures the profitability of private investments in roads. Armed with these perceptions, the private sector seeks to negotiate with government for preventive measures to minimise risk occurrences. Some of the common measures impose constraints on transport network development; others may demand financial compensation from government under the MAE approach. The public sector is perceived to be best able to manage risks that are in the domain of public governance, including network risk, sovereign risk and risk of unclear project objectives, for the reasons that network planning matters, assurance of certainty and consistency in legislation, and the setting of project objectives and enforcement of these objectives through public policy all require government’s judiciary power. Governments are most concerned with issues of transport network disintegration, projects being unwelcome by the community with the possibility of political and reputational repercussion, unpopular media coverage and public misperception. The task of balancing the conflicting objectives between the two sectors is not without difficulties. This mission is in part executed with a careful trade off between a politically sensitive object-toll pricing and other economic (e.g., subsidy) and engineering (e.g., project scope) means. We have seen that restraint on the levels of tolling a private operator is permitted to charge is a common approach of minimising political risk. But engineering and other economic means implemented at public cost to compensate private capital for the reduced unit price often place government’s reputation at risk. Both sectors hold reservations regarding the willingness of the other party to invest in understanding the risks they are managing. The private sector’s capacity is handicapped by its myopic focus on cost minimisation and self profitability, notwithstanding that the financial success of any tollroad is indispensable to an integrated transport network. The problem is compounded by the different views regarding the bandwidth of risk tolerance held by various parties within the SPV which may create distortions in traffic estimates. The subject of the public sector’s capability of managing risks that are in the public governance circle is more complex. Many participants argued that the apparent lack of exercise of public accountability by government authorities indicate that governments do not know how to measure these risks; and public authorities’ indifference to the financial eventualities of these tollroad projects has led to the underestimation of reputational risk. Further, roads are vital components of the transport network and urban development. Many portfolio ministers such as ministers for planning, transport, and roads, and even local councils, have vested interests in roads. The intricacy of reconciling conflicting interests amongst public sector agencies obscures the clarity of project objectives. The most vexed issue centres on risks that have been transferred to the extent that they have imposed a threat to public values for the sake of risk transfer. Gradually, market competition has transformed PPPs from an approach of risk guarantee by government to a paradigm of risk dumping by government (Chung, 2008). On occasions, competition drove private bidders to compete on levels of risk that they were prepared to accept. It seems that the danger warned by Arndt (2000) that government would use competitive pressure to over-transfer risks has materialised. A true partnership needs a continual multi-facet dialogue between all levels of government and the private sector to facilitate mutual learning of each sector’s perceived ability of managing risk. Some of the findings of the current study concur with that identified in Arndt (2000) suggesting that different parties’ conflicting aims have a prolong effect on risk allocation, and the misuse of market competitive force may distort the ethos of optimal risk sharing. Nevertheless, new risks gradually emerge as the PPP market evolves. The most prominent issues are associated with social-dimensional risks and public misperceptions about what a PPP project is set out to achieve. The Media is a powerful channel through which the PPP scheme is embraced or rejected by a malleable public perception. At present, it seems that transparency and coordination between the two sectors may have imparted the scheme some welcomeness, yet it remains far from clear which party is best positioned to take responsibilities for these emerging risks. The new challenges faced by governments and private proponents warrant further research that is aimed to simplify the complex risk allocation process in order to adapt to the continuously evolving nature of PPPs. The findings herein have identified the key risk dimensions and the likely levels associated with each risk attribute that a range of stakeholders have suggested are the main drivers of the PPP risk allocation process. Given that Australia has been a pioneer in tollroad projects under PPPs, and that many Australian construction companies and banks are now active in this field on the international stage, the evidence herein is of global interest.