Impact of Endogenous Risk Factors on Risk Cost in PPP Projects in Saudi Arabia


  • Y. Alfraidi Architecture Engineering Department, University of Hail, Saudi Arabia
  • S. M. Alzahrani Civil Engineering Department, University of Business & Technology, Saudi Arabia
  • M. H. H. Abdelhafez Architecture Engineering Department, University of Hail, Saudi Arabia | Architecture Engineering Department, University of Aswan, Egypt
  • H. Boussabaine Faculty of Business and Law, The British University in Dubai, United Arab Emirates
Volume: 10 | Issue: 4 | Pages: 6087-6091 | August 2020 |


The formation of the Public-Private Partnership (PPP) contracts is based on the grounds that the construction, progress, operation, and investment of a project must be allocated to a private organization under a contract. The risks associated with PPP projects are usually associated with resource improvement and development as well as the long-term operation of the project. It is known that cost and time overruns are among the obvious risks faced by a project during the development phase. Cost and time overruns are major sources of monetary risk. The risk and its impact may vary at different phases during the life cycle of a PPP project. In traditional procurement, all of the monetary risks are covered by the public sector. Most of the projects delivered under traditional procurement involve a price confirmation to indicate standard cost risks. This paper aims to investigate the impact of endogenous factors on budget overrun in PPP projects in Saudi Arabia. The paper briefly illustrates the content regarding the PPP risk evaluating systems and explains the association between risk occurrences and cost overrun in the Kingdom of Saudi Arabia (KSA). The paper concludes with recommendations for future research.


Public Private Partnership (PPP), risk, risk pricing, System Dynamics (SD)


Download data is not yet available.


M. A. Akhund, A. R. Khoso, A. A. Pathan, H. U. Imad, and F. Siddiqui, "Risk Attributes, Influencing the Time and Cost Overrun in Joint Venture Construction Projects of Pakistan," Engineering, Technology & Applied Science Research, vol. 8, no. 4, pp. 3260-3264, Aug. 2018. DOI:

N. J. Smith, T. Merna, and P. Jobling, Managing Risk in Construction Projects, 3rd ed. Hoboken, NJ, USA: Wiley-Blackwell, 2014.

D. Cooper, S. Grey, G. Raymond, and P. Walker, Project Risk Management Guidelines: Managing Risk in Large Projects and Complex Procurements. Hoboken, NJ, USA: Wiley, 2005.

D. A. Wehrung, K.-H. Lee, D. K. Tse, and I. B. Vertinsky, "Adjusting risky situations: A theoretical framework and empirical test," Journal of Risk and Uncertainty, vol. 2, no. 2, pp. 189-212, Jun. 1989. DOI:

M.-T. Wang and H.-Y. Chou, "Risk Allocation and Risk Handling of Highway Projects in Taiwan," Journal of Management in Engineering, vol. 19, no. 2, pp. 60-68, Apr. 2003. DOI:

E. Witt, "Procurement Arrangements and Risk Transfer in construction projects - initial evidence from Estonia," presented at the Modern Building Materials, Structures and Techniques, Vilnius, Lithuania, May 2010.

P. T. Nguyen and P. C. Nguyen, "Risk Management in Engineering and Construction: A Case Study in Design-Build Projects in Vietnam," Engineering, Technology & Applied Science Research, vol. 10, no. 1, pp. 5237-5241, Feb. 2020. DOI:

I. A. Ansari, "Evaluating the financial robustness of special purpose vehicles involved in the delivery of defence private finance initiatives," Ph.D. dissertation, Cranfield University, 2014.

S. S. Gao and M. Handley-Schachler, "Public bodies' perceptions on risk transfer in the UK's private finance initiative.," Journal of Finance and Management in Public Services, vol. 3, no. 1, pp. 25-39, 2003.

T. Dixon, G. Pottinger, and A. Jordan, "Lessons from the private finance initiative in the UK: benefits, problems and critical success factors," Journal of Property Investment and Finance, vol. 23, no. 5, pp. 412-423, 2005. DOI:

M. P. Abednego and S. O. Ogunlana, "Good project governance for proper risk allocation in public-private partnerships in Indonesia," International Journal of Project Management, vol. 24, no. 7, pp. 622-634, Oct. 2006. DOI:

A. Boussabaine, Risk Pricing Strategies for Public-Private Partnership Projects. Hoboken, NJ, USA: Wiley-Blackwell, 2013. DOI:

D. J. Price, A. M. Pollock, and S. Player, "Public risk for private gain? The public audit implications of risk transfer and private finance." Public Health Policy Unit, School of Public Policy, UCL, London, 2004.

A. D. Ibrahim, A. D. F. Price, and A. R. J. Dainty, "The analysis and allocation of risks in public private partnerships in infrastructure projects in Nigeria," Journal of Financial Management of Property and Construction, vol. 11, no. 3, pp. 149-164, Jan. 2006. DOI:

A. Dziadosz, A. Tomczyk, and O. Kapliński, "Financial Risk Estimation in Construction Contracts," Procedia Engineering, vol. 122, pp. 120-128, Jan. 2015. DOI:

A. Alfraidi, S. M. Alzahrani, F. Binsarra, M. H. H. Abdelhafez, E. M. Noaime, and M. A. S. Mohamed, "Impact of political risk on construction cost in PPP project in KSA," International Journal of Advanced and Applied Sciences, vol. 7, no. 5, pp. 6-11, May 2020. DOI:

F.-M. Liou and C.-P. Huang, "Automated Approach to Negotiations of BOT Contracts with the Consideration of Project Risk," Journal of Construction Engineering and Management, vol. 134, no. 1, pp. 18-24, Jan. 2008. DOI:

J. S. Russel, "Decision models for analysis and evaluation of construction contractors," Construction Management and Economics, vol. 10, no. 3, pp. 185-202, Jul. 2006. DOI:


How to Cite

Y. Alfraidi, S. M. Alzahrani, M. H. H. Abdelhafez, and H. Boussabaine, “Impact of Endogenous Risk Factors on Risk Cost in PPP Projects in Saudi Arabia”, Eng. Technol. Appl. Sci. Res., vol. 10, no. 4, pp. 6087–6091, Aug. 2020.


Abstract Views: 384
PDF Downloads: 304

Metrics Information
Bookmark and Share

Most read articles by the same author(s)