Risk Allocation and Structuring in Public–Private Partnership Projects

Yongjian Ke

Chapter 8 in Consolidating and Developing a Body of Knowledge for Public-Private Partnership Project Management, 2026, pp 157-178 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This chapter examines risk management in public–private partnerships (PPPs), with a focus on risk allocation and structuring to achieve successful project outcomes. It outlines the risk management cycle, encompassing tasks such as risk identification, assessment, allocation, structuring, treatment, and monitoring. Addressing the challenges and limitations of the golden principle of risk allocation, the chapter explores academic solutions, including hybrid risk-sharing mechanisms and capacity-based models, alongside practical approaches such as standardized contract templates and sector-specific risk allocation tools. Emphasis is placed on translating risk allocation decisions into enforceable contractual provisions that ensure clarity, flexibility, and accountability. Using demand risk in road PPP projects as an example, the chapter illustrates the application of a structured approach that integrates theoretical principles with practical tools.

Keywords: Public-Private Partnership; Project Management; Infrastructure; Body of Knowledge; Construction Management; Mega-Projects (search for similar items in EconPapers)
JEL-codes: H54 L74 (search for similar items in EconPapers)
Date: 2026
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