Evaluation of risk factors in Ghanaian public-private-partnership (PPP) power projects using fuzzy synthetic evaluation methodology (FSEM)

Abstract

Purpose

This paper aims to evaluate the risk factors and determines the overall risk level (ORL) of public-private-partnership (PPP) power projects in Ghana using fuzzy synthetic evaluation methodology (FSEM).

Design/methodology/approach

In this paper review of literature led to the development of a 67-factor risk list which was ranked by experts and industry practitioners through a questionnaire survey.

Findings

These factors were grouped into principal risk factors (PRFs) using component analysis and they served as the input variables for fuzzy analysis. The seven components were: Contract and Payment risks, Environmental risks, Financial and Cost risks, Legal and Guarantee risks, Operation risks, Socio-Political and Performance risks (SPR) and Tender and Negotiation risks. Study showed that the ORL of Ghanaian PPP power projects is high implying they are risky to both the public and private sectors. Fuzzy analysis also confirmed SPR as the most critical principal factor.

Originality/value

This study is significant and demonstrates that fuzzy methodology can be used as a useful risk evaluation tool and risk assessment framework for private investors, policy makers and public sector.

Citation

Kukah, A.S.K., Owusu-Manu, D.-G., Badu, E. and Edwards, D.J. (2023), "Evaluation of risk factors in Ghanaian public-private-partnership (PPP) power projects using fuzzy synthetic evaluation methodology (FSEM)", Benchmarking: An International Journal, Vol. 30 No. 8, pp. 2554-2582. https://doi.org/10.1108/BIJ-09-2021-0533