Critical risk factors affecting the implementation of PPP waste-to-energy projects in China

Yelin Xu, Albert P.C. Chan, Bo Xia, Queena K. Qian, Yong Liu and Yi Peng

Applied Energy, 2015, vol. 158, issue C, 403-411

Abstract: Since 2003, Mainland China has been promoting the public–private partnership (PPP) procurement model in the waste-to-energy incineration sector to reduce the waste burying rate and improve environmental quality. Five critical risk factors (CRFs) that affect the construction and operation of waste-to-energy incineration projects have been identified from real-life risk events of 14 PPP waste-to-energy incineration plants through content analysis. These risk factors are insufficient waste supply, disposal of non-licensed waste, environmental risk, payment risk, and lack of supporting infrastructure. A recently completed PPP waste-to-energy incineration plant, the Shanghai Tianma project, was investigated to learn from the effective management of CRFs. First-hand data about the Shanghai Tianma project was collected, with a focus on project negotiation and concession agreement. Lessons learned about risk management were acquired. This paper presents a detailed study of the contractual structure, risk sharing scheme, risk response measures to CRFs, and project transfer of a PPP project. The study results will provide governments with management implications to prepare equitable concession agreements and benefit private investors by effectively mitigating and managing risks in future PPP waste-to-energy incineration projects.

Keywords: Public–private partnership (PPP); Waste-to-energy incineration plant; Risk management; Project transfer; China (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (24)

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DOI: 10.1016/j.apenergy.2015.08.043

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