Nigeria Implementation of Risk Management in Public Private Partnership (PPP) Housing Projects
Introduction:
This paper appraised the implementation of risk management in Public Private Partnership (PPP) housing projects in Abuja, Nigeria with the view to suggest measures for improving the practice towards effective housing provision. Data for the research was obtained through questionnaire. The data was analysed using descriptive statistic, mean rating and Kruskal-Walis test. Strong support from top management, level of company’s turnover and the need to comply with set regulations were the main drivers to effective implementation of risk management while lack of information/knowledge of risk management, lack of awareness of the importance of risk management and risk management not been a priority in clients requirements were the inhibiting factors. Results of the hypotheses testing shows there is significant variations in the perceptions of respondents on both the drivers and barriers to to effective implementation of risks management in PPP housing projects.
The study suggested formal and structured approach to managing risks in construction projects such as PPP housing, elaborate risk management plan be made a requirement in bidding for PPP housing projects with backing legislations to ensure its implementation and the need for top management to make conscious effort towards creating enabling environment to encourage the implementation of risk management in their organisations. Public Private Partnership (PPP) is gaining wider acceptance in many countries of the world as a strategy for attracting private funds to finance housing projects. However, PPP projects are prone to risks than any other form of contractual arrangement due to the number of stakeholders involved with varying interests in addition to the economic, political, social and cultural conditions where the projects are to be undertaken. These risks affect the achievement of project objective and therefore need to be adequately managed to ensure project success. Risk management connotes predicting potential risks that may be encountered by an organisation or associated with a project and to develop appropriate strategies in order to deal with the exposure to the identified risks.
Implementation Of Risks Management –A Review:
The choice of which approach to adopt by an organisation is dependent upon the drivers as well as barriers to implementing risk management (Manab, Kassim and Hussain, 2010). Drivers to implementing risk management in construction include corporate governance, compliance to regulations, advancement in technology, good business practice, shareholder requirements, improved communication, globalisation, complexity of risks and competitive advantage (Manab, Kassim and Hussin, 2010). In addition to the above listed factors, organisations can also be influenced to implement risk management by factors such as strong support from top management, encouragement from board of directors, type of firm/size/company turnover, presence of risk officer and internal auditor and pressures from external auditors (Abdullah, Zakuan, Khayon, Ariff, Bazin and Saman, 2012). Hudin and Hamid (2014) stressed that company may also implement risk management due to the acknowledgement of risk management potential benefits, emergence of new business trends, increased occurrence of risk events, and the awareness of company vulnerabilities.
Risk Management Implementation in Public Private Partnership:
Risk Management Implementation in Public Private Partnership (PPP) Housing Projects Risk management is a deliberate act that is consciously adopted by organisation in executing construction projects. In order to examine the practice of risk management in PPP housing projects, the respondents were questioned on whether they apply risk management principles in PPP housing projects and the approaches adopted by the various organisations. The results showed that, all respondents apply risk management in executing PPP housing projects. Risk has been referred to as any event that causes variability in achieving project objectives.
Drivers to Effective Implementation of Risk Management in PPP Housing Projects in Abuja, Nigeria Abuja, Nigeria:
The decision of whether to adopt risk management in certain projects is dependent upon the operating environment with its attendant factors which support (drivers) or inhibits (barriers) the implementation of such plans. The result of data analysis with respect to drivers of effective implementation of risk management in PPP housing projects. Strong support from top management was ranked first, level of company turnover came second and need to comply to set regulations was ranked third among the main drivers of effective implementation of risk management in PPP housing projects.
Conclusion:
This study appraised the implementation of risk management principles in PPP housing projects in Abuja, Nigeria. Risk management is been adopted in PPP in housing projects but the practice lacks the needed sophistication to adequately address risks in such projects. Risks management is based on intuition rather than formal and systematic approach. There is the need for formal and structured approach to managing risks in construction projects such as PPP housing. The concept of risk management is an emerging concept in many developing countries including Nigeria; consequently, risk management culture is not fully developed. There are no adequate legislations mandating project managers to implement risk management in PPP housing projects.