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Title: Comparative analysis of risk transfer in the United Kingdom and Malaysian public private partnerships
Author: Abdullah, Nooriha Binti
ISNI:       0000 0004 6422 3502
Awarding Body: Glasgow Caledonian University
Current Institution: Glasgow Caledonian University
Date of Award: 2016
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Utilisation of Public-Private Partnership/Private Finance Initiative (PPP/PFI) procurement and the issue of risk transfer in the United Kingdom (UK) has given rise to some concerns in other countries that use PPP/PFI procurement, including Malaysia. This research conducted a comparative analysis of the UK and Malaysia with regards to risk transfer in PPP/PFI procurement. The study focuses on the associated risks in PPP/PFI projects and how risks can be transferred to the other parties. For the efficient management of risks, the level of risks transferred to the private sector should reflect the risks actually borne by that sector in order to protect the public sector partner and taxpayers if value for money (VFM) is to be secured. This research analysed the contemporary trend of risk transfer in the UK by reviewing related empirical studies. The basis of this research relates to the notion that risk should be transferred to the party that can manage them well and at minimum cost. The vast secondary data available enabled the researcher to understand the evolution of PPP/PFI procurement in the UK and to critically analyse the issue of risk transfer. In Malaysia, lack of empirical studies on risk transfer required interviews to be conducted with relevant parties directly involved in PPP/PFI projects. Hence, this research adopted a case study approach, involving three PPP/PFI projects in Malaysia. The primary data was mainly generated from semi-structured interviews with representatives of Special Purpose Vehicle (SPV) companies, external financiers, contractors, facilities managers and officers from government agencies. Documents in the public domain were downloaded from the UK HM Treasury website, Public-Private Partnerships Unit (3PU) website as well as from the private domain, such as progress reports on the PPP/PFI projects, PowerPoint presentations and Concession Agreement contracts, were also examined to identify related issues of risk transfer, both in the UK and Malaysian contexts. The comparative analysis of PPP/PFI procurement in the UK and Malaysia reveals some similarities and differences in terms of its institutional, political, cultural and economic influences affecting the modus operandi of PPP/PFI procurement in each country. Analysis of the PPP/PFI structure in both countries indicates some similarities in terms of the Public Sector Comparator (PSC), VFM assessments, contracting and service sectors, naming a few. Some significant differences however, were found relating to the reasons and rationale of the UK and Malaysia in adopting and implementing PPP/PFI procurement. Other differences include the financing methods, the socio-political agenda of the Malaysian government, the commitment and approaches of the banking systems in both countries and the role of key players towards the success of the procurement. Reviewing the implications of risk transfer particularly in the UK towards achieving VFM for the public sector and taxpayers raised questions in relation to the options available to Malaysia. Analysis of the key findings from the three PPP/PFI projects in Malaysia shows that the spectrum of arrangements for risk transfer in Malaysia does differ because all three PPP/PFI projects analysed used different PPP/PFI model that resulted not only in different level of risk transfer, but also, more crucially, different arrangements for the sharing of certain risks that have no equivalent in the PPP/PFI models of developed countries. The results of the research contribute to the advancement of knowledge as well as to both theory and practice in three main ways: 1) identification of different ways of funding PPP/PFI procurement in Malaysia; 2) conceptualisation of a different structure of the SPV and a further degree of sharing and mutualisation of risks in the PPP/PFI model used in Malaysia; and 3) identification of a different set of socioeconomic objectives driving the PPP/PFI procurement in Malaysia
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available