Private Sector´s Perception of the Risk Allocation in Public-Private Partnership (PPP) Arrangement

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INTRODUCTION 1.1. Background of Study The existing of various risks and financial limitation always holds the government back during initiating new infrastructure projects. Therefore, it is important for developing country like Malaysia to practice PPP as it can help the government to save resources by share the risks to the private sector for unfamiliar projects (Hodge & Greve, 2007). In general, there are two significant advantages of implementing PPP compare to the traditional procurement. First is reduce the government budget on infrastructure project and spend in other government policies priority. Second is better value for money in constructing public infrastructure and facilities (Bing, Akintoye, Edwards, & Hardcastle, 2005). This can be archive due to the use of private funding in PPP project. The availability of private funding given government new capacity to provide the infrastructure faster and enhance services delivery to the society. PPP can be define as cooperation between public and private sector in sharing risks, cost and resources to develop products or services (Ham & Koppenjan, 2002). The definition emphasizes risks, cost and resources sharing as a vital component of PPP. Public and private sector have specific qualities and the purpose of PPP is to draw out the best potential from both side in order to improve project execution and public services delivery (Tang, Shen, & Cheng, 2010). PPP project normally required the private sector to involve in

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