A Sustainability-Based Risk Assessment for P3 Projects Using a Simulation Approach

Abstract

Integrating sustainability in the risk management process is an emergent problem, especially for efficient infrastructure delivery. For the case of complex projects like public–private partnerships (P3), traditional management practices offer a limited capacity to address long-ranging risk impacts on the social, economic, and environmental fabric within and around the project boundaries. Although P3 projects are objective-based contracts, present risk models rarely delineate risk impacts on focused project objectives. The relevant studies are very scarce creating a limited understanding of available approaches to conducting sustainability-based risk management for P3 projects. As risk and sustainability are two inherently subjective concepts with multiple interpretations, their combined assessment within a single framework demands a pragmatic approach. Therefore, the current study presents a model for conducting a sustainability-based risk assessment of P3 infrastructure projects through global data. Monte Carlo simulation is employed to further define the probabilistic risk ranges and risk ranks over relevant triple-bottom-line-based sustainability indicators for highway sector P3 projects. Findings are further demonstrated through two highway case studies and relevant mitigation strategies are also suggested. In the end, an implementation framework and future recommendations for the application of study findings on actual projects are also suggested. The study has useful implications for practitioners and researchers alike aiming for the delivery of sustainable complex projects.