Public-private partnerships for tollway construction and operation: Risk assessment and allocation from the perspective of investors

This study aims to assess and allocate the key risk events for public-private partnerships in Indonesian tollway construction and operation. The data were collected from a risk assessment survey of tollway companies in Indonesia based on two perspectives: the degrees of occurrence and impact. The top-ranked risk events (18 out of 55 risks) generated from the value-of-risk index are the focus of this study and the relationships among risk events are analysed and explained using risk mechanism models. Risks related to land acquisition were identified as the major risk events in the Indonesian tollway business and 10 out of the 18 top-ranked risk events were judged as suitable for assumption by the government. The weather risk should be shared by both parties with the remaining risks borne by the investor. The findings are expected to be useful for government review of regulations and practices and for private sectors interested in investing in tollway projects.