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Structural equation model (SEM) for evaluating interrelationships among risks inherent in Ghanaian public–private partnership (PPP) power projects

Augustine Senanu Komla Kukah (Department of Construction Technology and Management, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana)
De-Graft Owusu-Manu (Department of Construction Technology and Management, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana)
Edward Badu (Department of Construction Technology and Management, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana)
Eric Asamoah (Department of Statistics and Actuarial Science, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana)

Engineering, Construction and Architectural Management

ISSN: 0969-9988

Article publication date: 27 December 2022

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Abstract

Purpose

The demand for power has surged in recent times and continues to increase yearly. In comparison to developed countries, the power industry’s risks, especially in piblic–private partnership (PPP) projects, are more complex and essential in developing countries. Appreciating the inter relationship among these risk factors is crucial. However, there exist no studies developing quantitative models to explain how various PPP power risk factors influence each other, especially in developing countries like Ghana. This study aims to investigate and model the relationship, the probability of occurrence and severity of impact of PPP power risk factors in Ghana.

Design/methodology/approach

Data were collected through ranking type questionnaire in a two-round Delphi survey with 48 respondents using purposive and snowball sampling techniques. partial least squares structural equation modelling (PLS-SEM) was used for analysis of data.

Findings

A model was developed to investigate the influence the risk factors inherent in PPP power projects have on each other. Validity of the model was tested based on the data collected. PLS-SEM results indicated the various relationships and interdependencies the risk factors had on each other considering their probability and severity. Both significant and insignificant levels of relationships were found among the various risk factors.

Practical implications

The SEM that was developed to assess the relationships among the risk factors has great value for policy makers in the energy sector, industry practitioners, researchers and industry practitioners. Strategies can be mapped out to mitigate and effectively allocate the risks with the high interdependencies.

Originality/value

Regarding the quantitative impact of the interrelationship among risk factors in PPP power projects, the findings of this research are arguably the first to be presented for the construction sector and contribute to knowledge on PPP practice and further has implications toward achieving power sector risk mitigation.

Keywords

Acknowledgements

This research paper is developed based on large data set obtained in a study on risk allocation modeling for public–private partnership power projects in developing countries. Other research outputs have been produced but with different objectives. Authors are grateful to respondents of study and anonymous reviewers for improving the quality of this paper.

Citation

Kukah, A.S.K., Owusu-Manu, D.-G., Badu, E. and Asamoah, E. (2022), "Structural equation model (SEM) for evaluating interrelationships among risks inherent in Ghanaian public–private partnership (PPP) power projects", Engineering, Construction and Architectural Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/ECAM-10-2022-0943

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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