Risk analysis of public-private partnership waste-to-energy incineration projects in China: a hybrid fuzzy DEMATEL-ISM approach

Abstract

PurposeMany waste-to-energy (WTE) plants are constructed and operated using the public-private partnership (PPP) mode in China. However, risk events of PPP WTE incineration projects sometimes occur. This study aims to clarify the relationship of risks in China's PPP WTE incineration projects and identify the key risks accordingly and risk transmission paths.Design/methodology/approachA risk list of PPP WTE incineration projects was obtained based on literature analysis. Moreover, a hybrid approach combining fuzzy sets, decision-making trial and evaluation laboratory (DEMATEL) and interpretive structural modeling (ISM) was developed to analyze the causality of risks, explore critical risks and reveal the risk transmission paths. The quantitative analysis process was implemented in MATLAB.FindingsThe results show that government decision-making risk, government credit risk, government supervision behavior risk, legal and policy risk, revenue and cost risk and management capacity risk are the critical risks of PPP WTE incineration projects in China. These critical risks are at different levels in the risk hierarchy and often trigger other risks.Originality/valueCurrently, there is a lack of exploration on the interaction between the risks of PPP WTE incineration projects. This study fills this gap by examining the key risks and risk transfer pathways of PPP WTE incineration projects from the perspective of risk interactions. The findings can help the public and private sectors to systematically understand the risks in PPP WTE incineration projects, thus enabling them to identify the risks that need to be focused on when making decisions and to optimize risk prevention strategies. The proposed hybrid approach can offer methodological ideas for risk analysis of other types of PPP projects.