Quản lý rủi ro dự án đầu tư xây dựng cơ sở hạ tầng kỹ thuật theo hình thức đối tác công tư (PPP) tại thành phố đà nẵng tt tiếng anh

MINISTRY OF EDUCATION AND TRAINING
NATIONAL UNIVERSITY OF CIVIL ENGINEERING

PHAM THI TRANG

RISK MANAGEMENT IN THE PUBLIC PRIVATE
PARTNERSHIP (PPP) OF TECHNICAL
INFRASTRUCTURE CONSTRUCTION AND
INVESTMENT PROJECTS IN DA NANG

Specialisation: Construction Mannagement
Code: 9.58. 03. 02
DISSERTATION ABSTRACT

Hanoi – 2019


This dissertation in undertaken and completed at the National
University of Civil Engineering

Supervisor 1: Prof. Dr. Nguyễn Huy Thanh
Supervisor 2: Assoc Prof. Dr Phan Cao Tho

Reviewer 1: Prof. Scientific Dr. Nghiem Van Dinh

Reviewer 2 : Assoc Prof. Dr Ngo Thi Thanh Van

Reviewer 3 : Dr. Nguyen Pham Quang Tu

This dissertation will be defended before a Jury at the National
University of Civil Engineering. At 8 am on ……

This dissertation can be found at the National Library and also at the
Library of the National University of Civil Engineering


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INTRODUCTION
1. Motivation of research
Today, the demand for investment in construction of technical
infrastructure in Vietnam in general and Da Nang city in particular is
increasing rapidly in both scale and field with the wide participation of the
whole society. Sustainability, synchronization and completeness of modern
technical infrastructure are increasingly important, Which contributing to
the production and business activities, investment activities of the economy
as well as the lives of the people. However, the investment in technical
infrastructure requires huge capital, beyond the ability of the State
Therefore, the form of public-private partnership for development
investment in general, especially for investment in construction of technical
infrastructure in particular, is considered a major capital mobilization
channel in the future, contributing to reducing the burden as well as risks to
the State budget. It is one of the effective tools for the State to acquire
necessary technical infrastructure for public interests and socio-economic
development
In fact, in recent years, the mobilization of capital sources to invest
in technical infrastructure in Da Nang city has been implemented many
works in the form of contracts mainly BT, in terms of long-term
development, the investment in BT projects will not exist sustainably as
land availability becomes increasingly limited. Meanwhile, the legal
framework as well as the mechanism have not encouraged private

participation in investment in this area due to the complicated approval and
licensing process, low capital recovery, and a responsible role. There is still
a lack of clarity of both the State and the private sector; private investors
face many risks. It is the unstable impacts from the surrounding
environment and the internal adjustment of the project that lead to changes
in many basic criteria that were initially planned and changed the
effectiveness of the project. That is the existence of risks to the investment
project of technical infrastructure in the form of public-private partnership
in Da Nang city. Therefore, if implemented effectively, a reasonable risk
management solution will be able to minimize risks, especially in the early
stages of screening for non-compliant projects. integrated and prioritized on
higher quality projects, which contributing to the motivation for faster
development of PPP
Currently, in Vietnam in general and Da Nang city in particular, the
issue of risk management in technical infrastructure construction and
investment projects of PPP method that has not been studied, the extent of


2
the author's understanding, there has not been any research study on risk
management in technical infrastructure construction and investment projects
of PPP method
Due to this situation, the research and selection of the topic: "Risk
management in the public private partnership (PPP) of technical
infrastructures construction and investment projects in Da Nang" of
construction management major which is really necessary, in order to
contribute to minimize the impact of risk on PPP projects in Da Nang city,
thereby creating motivation to stimulate and attract potential investors, that
contributing to the development of Da Nang city in particular and Vietnam
in general.

2. Aims and objectives of research
- Aims of research: The dissertation proposes solutions to improve
the risk management in technical infrastructure construction and investment
projects of PPP method, which contributing to attract this form of
investment for the development of technical infrastructure in Da Nang city
- Objectives of research: For the purpose of research, The
dissertation proposes the tasks to be achieved by the research process are as
follows:
(1) Analyzing and evaluating research works on public private
partnerships, risk management in technical infrastructure construction and
investment projects of PPP method in the country and abroad that to
identify gaps that need further study of the dissertation
(2) Systematize, clarify and supplement the theoretical basis about
risk management in technical infrastructure construction and investment
projects of PPP method
(3) Survey to clarify the current status of PPP awareness, about risk
management in technical infrastructure construction and investment projects
of PPP method in Danang City
(4) Proposing a scientific and feasible solution to complete the risk
management in technical infrastructure construction and investment projects
of PPP method in Danang City
(5) Proposing the research and application of quantitative model and
application of information technology to build software to support risk
assessment and analysis that in order to effectively manage risks in
technical infrastructure construction and investment projects of PPP method
3. Object and scope of research
- Object of research: Study risk management in technical
infrastructure construction and investment projects of PPP method of the
Government

3
- Scope of research : The scope of the dissertation is to study the
status of risk management in technical infrastructure construction and
investment projects of PPP method (PPP) in Da Nang city from 2009 to
2018. Thereby, that proposing solutions suitable to the development
orientation until 2030 and vision to 2045.
4. Scientific basis of research
To solve the problem that needs research, the dissertation has used
the following scientific bases:
Theoretical basis: Theoretical about risks and risk management of
investment technical infrastructure projects in the form of public private
partnership (PPP). Based on the theoretical basis, the author has
supplemented and clarified the concepts, research points of view,
influencing factors, etc…for risk management of infrastructure construction
investment projects
Legal basis: This is an important basis to organize, deploy, evaluate
project management in general and risk management in particular for
technical infrastructure construction investment projects in the form of PPP
Practical basis: Through the reality of the demand for investment in
construction of technical infrastructure in the form of PPP, the practice of
PPP awareness and implementation of risk management of technical
infrastructure investment projects of PPP in Da Nang city, the practice of
applying information technology in risk management, the author analyzed
and assessed the situation, thereby proposing solutions to minimize
appropriate risk of the State agency on the basis of ensuring the expected
benefits for the Investor.
5. Methodology of research
In addition to the research methods such as synthesis, analysis,
comparison, the dissertation has used mainly two qualitative and

quantitative research methods to determine research results.
6. Scientific and practical significance
a. Scientific significance of research
On the basis of systematizing, clarifying and supplementing the
rationale on risks and managing risks in technical infrastructure
construction and investment projects of PPP method, the dissertation has
analyzed the status of the research and implementation of PPP in domestic
and abroad; conduct a survey to determine the awareness and demand for
PPP investment in Da Nang city, find out the causes of failure in the
implementation of construction investment projects in the PPP method in
Danang, receive identifying common risks, assessing risk levels, that
proposing reasonable risk allocation based on which groups of solutions and


4
supporting software will be built for risk assessment and analysis that in
order to effectively manage risk in the implementation of PPP projects.
Provide documents for research and training in related fields.
To equip scientific bases to help Da Nang city to realize the
construction of technical infrastructure construction investment under PPP
method, to implement PPP projects effectively.
b. Practical significance of research
Contributing to improving institutions on the management of risks of
investment project to build technical infrastructure in the form of PPP
Contributing to building a database, completing analytical and
evaluation tools for risk management to help the State management
agencies make the right decisions thanks to the accuracy of information
technology.
Address of applying the dissertation's proposals and risk analysis
software program: Construction Management Departments of Departments

of Danang City such as Department of Planning and Investment,
Department of Finance, Department of Construction, etc. and PPP project
investors
7. New contributions of the dissertation
The dissertation inherits and acquires many research documents
related to the topic, on that basis, supplements and develops in accordance
with the requirements of the research subjects. The dissertation results have
made the following new contributions:
One is to systematize, clarify and supplement the theoretical and
practical basis for risk management in technical infrastructure construction
and investment projects of the PPP method.
Secondly, Analyze the current situation of risk management in
technical infrastructure construction and investment projects of the PPP in
Vietnam in general and Da Nang city in particular through qualitative
methods such as: list, analyze, evaluate data reported in Vietnam and some
countries in the world and through quantitative survey methods
Thirdly, Proposing scientific and feasible solutions to complete the
risk management in technical infrastructure construction and investment
projects of the PPP method in Da Nang city through risk identification, risk
classification, risk analysis and risk control
Fourthly, Using SPSS.16 tool to identify factors affecting PPP
awareness in Da Nang city and risk classification, risk ranking, risk
allocation
Fifthly, Research and application of quantitative analysis models,
thereby proposing the construction of information technology application
software to analyze and assess risks, support quick decisions to manage


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risks of investment projects on construction of technical infrastructure in the

form of public private partnership effectively.
8. The structure of the dissertation
The structure of the dissertation consists of Introduction, 4 chapters
(Chapter 1: 26 pages, Chapter 2: 25 pages, Chapter 3: 35 pages, chapter 4:
36 pages), conclusion - recommendations, 17 tables, 27 Figures, graph,
indexes that presented on 150 pages of A4 paper excluding appendices
CHAPTER 1: OVERVIEW RESEARCH ABOUT TECHNICAL
INFRASTRUCTURE CONSTRUCTION AND INVESTMENT
PROJECTS OF THE PUBLIC PRIVATE PARTNERSHIP (PPP)
1.1. Overview of research works abroad
The PPP have been and continue to be the concern of many
researchers in the world when the demand for technical infrastructure
development that is a concern of many countries around the globe.
There are many researchers who have studied infrastructure
construction and investment projects of PPP method with different purposes
and levels in both theoretical and practical terms. The research focuses on
two main directions, that is empirical research (research using empirical
evidence through direct or indirect observation or experience) and non empirical research (through research that use of models to analyze and
evaluate problems), with 4 common trends: researching the success factors
of PPP projects, financial research of PPP projects, risk research of PPP
project and transfer time study of PPP project.
Risk management is also a research issue of global interest.
Researches around the world have developed models to manage risks for
projects implemented under PPP, on the other hand, the PPP have been
conducted in risk identification and analysis risk, allocate risk, thereby
developing appropriate risk reduction strategies.
All the researches in the world, besides analyzing and identifying
important success factors of infrastructure projects in the form of PPP in
general and investment project of technical infrastructure construction and
investment in particular, a number of other studies focus on building

building models to solve problems during PPP project implementation.
Most of the researches in the world mostly focus on the study of PPP
method in infrastructure construction and investment projects in general,
there are few studies related to infrastructure construction and investment
projects in particular, so the research of the dissertation is really needed.
1.2. Overview of research works in the country
Through the researches in the country, the author realized that PPP
has been and continues to be a concern not only abroad but also a concern


6
of Vietnam in general and Danang City. In particular, the demand for
technical infrastructure development is increasing.
Most of the domestic research focuses on the following:
+ Studying and researching world experience in implementing PPP
and drawing lessons for Vietnam ([3], [4], [19], [32], [39])
+ Research the situation analysis to make recommendations to
promote PPP ([2], [15], [16], [17], [18], [31], [34])
+ Comprehensive research at the depth through analyzing the
situation, exploring world experience and proposing solutions to implement
PPP in Vietnam ([14], [20], [26] , [41])
The research on risks and risk management related to investment
projects to build technical infrastructure in the PPP is very little research
interest by the authors ([30], [35], [ 72])
Thus, most of the domestic researches are based on the research of
current legal documents; others are researching on the basis of a common
theoretical basis of the public private partnership form, studying
experiences of some countries and applying them to Vietnam. Few authors
study risk identification and risk allocation, but only focus on transport
projects implemented under PPP. The risk management in technical

infrastructure construction and investment projects of PPP method in
Vietnam in general and Da Nang city in particular has not been studied.
In Da Nang city, PPP has been interested and participated by many
domestic and foreign investors, attracting both potential and most difficult
investors in the region. However, the sad thing is that many PPP projects
have not yet been implemented and have not been effective as expected.
From this fact, Da Nang city needs to be responsible, need more efforts in
applied research and effective management of risks of technical
infrastructure construction and investment in PPP method that in order to
soon realize this method of capital mobilization in daily life.
1.3. Identify research gaps and issues that require in-depth study
With a broad perspective, it will be difficult for researchers to
identify the most important factors for a successful PPP project regardless
of country, industry, phase or project model. The main results identified in
previous studies can only be summarized, tested and analyzed in order to
expand the understanding of PPP regardless of country, stage of PPP
project, not sectoral and project differentiation, thereby providing the
methodology needed for further research by the author.
Inheriting and developing the ideas and results of previous studies,
this dissertation will study in depth risk management in technical
infrastructure construction and investment projects of PPP method in


7
Danang city to create a driving force. PPP project development. New issues
need to be researched in depth:
(1) Analyzing and evaluating research works on public-private
partnerships, risk management of technical infrastructure construction and
investment projects in the country and abroad.
(2) Systematize, clarify and supplement the theoretical and practical

basis for public private partnership form and risk management in technical
infrastructure construction and investment projects of PPP method
(3) The dissertation needs to quantify the impact level of risks and
propose a plan to allocate risks of the investment project for construction of
technical infrastructure in the form of PPP by qualitative and quantitative
methods suitable to the reality in Da Nang city.
(4) Analyze the current situation of risk management in technical
infrastructure construction and investment projects of PPP method in
Danang City
(5) Proposing a scientific and feasible solution to improve the risk
management in technical infrastructure construction and investment projects
of PPP method in Danang City through risk identification risk, risk
classification, risk analysis and risk control
(6) Use SPSS.16 tool to identify factors affecting PPP awareness in
Danang city, risk classification, risk identification, risk ranking, risk
allocation
(7) Research and apply quantitative analysis models, thereby
proposing the development of information technology application software
for risk assessment and analysis, supporting quick decision making to
manage risks investment projects to build technical infrastructure in the
form of effective public private partnerships
CHAPTER 2: THEORETICAL AND PRACTICAL BASIS ON RISK
MANAGEMENT IN TECHNICAL INFRASTRUCTURE
CONSTRUCTION AND INVESTMENT PROJECTS OF THE
PUBLIC PRIVATE PARTNERSHIP (PPP)
2.1. Theoretical basis on technical infrastructure
2.1.1. Technical infrastructure concept
Technical infrastructure means a system of technical infrastructure
works including traffic works, communications, energy supply, public
lighting, water supply, collection and treatment of wastewater and waste.

snakes, cemeteries, and other structures [28]
Within the scope of the dissertation, the technical infrastructure
consists mainly of transport works, water supply, wastewater collection and
treatment, solid waste, public lighting and other constructions such as Lien


8
Chieu ports, fishing ports, ... pay little attention to communication, energy
supply, cemeteries
2.1.2. Characteristics of technical infrastructure
Technical infrastructure has the following characteristics: Social;
consistency, synchronization and synthesis; Complexity; Economical;
Calculating time and space; Security and national defense; Modernity
2.1.3. Components of technical infrastructure
Technical infrastructure includes the following components: System
of transport and transport works; System of water supply and treatment
works used for domestic water, industrial water and sewage network;
Sanitation and waste management facilities systems include the disposal
and disposal of hazardous waste; System of construction works and
distribution of energy used in daily life and industry; System of
communications works from telephone services to telecommunication
information; systems of other constructions [28]
2.1.4. The role of technical infrastructure
Technical infrastructure is a complex work that directly or indirectly
participates in the production and social activities of the society, closely
linked to the object that the system serves, which is a condition for
continued development urban development.
2.2. Theoretical foundations of the public private partnership
2.2.1. Public private partnership (PPP) concept
Public private partnership is a cooperation agreement based on a

long-term contract between the State and the Private Sector in infrastructure
development and provision of public services for the purpose of taking
advantage of that sharing risks and reasonable benefits among the parties
involved in the project
2.2.3. Types of project contracts implemented of the public private
partnership (PPP)
Currently, in Vietnam and other countries in the world, the publicprivate partnership (PPP) has the following 10 types of contracts [11]: Build
- operate - transfer (BOT) contracts; Build-transfer-operate (BTO)
contracts; Build - Transfer (BT) Contract; Build-own-operate (BOO)
contract; Build - Transfer - Hire (BTL) Contracts; Contract of Construction
- Lease of Services - Transfer (BLT); Business - Management Contract
(O&M); Mixed contracts; Contract of exploitation concession (Franchise);
Design - build - sponsor - operate (DBFO) contract
2.2.4. Characteristics of the public private partnership
+ PPP is a long-term cooperation commitment (about 10-50 years)
+ PPP creates a dynamic mechanism for proper assignment between
parties in PPP project contracts


9
+ PPP distinction should be made with privatization
2.2.5. Advantages and disadvantages of the public private partnership
2.2.5.1. Advantages of public private partnership
+ Improve the efficiency of using resources
+ Improve the quality of assets and services
+ Improving public sector management
+ Overall improvement of public sector procurement
2.2.5.2. Disadvantages of public private partnerships
+ PPP projects are likely to require high costs as private investors
expect a higher return

+ PPP projects in many cases may cause the State sector to lose
control of management
+ PPP create opportunities for developing group interests in the State
sector, this is an objective risk that is difficult to control.
2.3. Theoretical foundations of risk management in technical
infrastructure construction and investment projects of public private
partnership (PPP) method
2.3.1. The concept of risk management in technical infrastructure
construction and investment projects of PPP method
a. Risk concept
Risk is the occurrence of random factors (uncertainties), the
occurrence of uncertainty events (risks) of technical infrastructure projects
implemented in PPP method, changing the results project outcomes in the
direction of negative or opportunistic and that (random) uncertainty can be
measured or cannot be measured by probability theory.
b. Risk management concept
Risk management is the process of identifying and classifying risks,
measuring to determine the level of risk, reasonably allocating risks,
proposing solutions to deal with risks, and finally auditing risk control aims
to check, monitor and adjust the risks on a regular basis to minimize the
systematic and effective risks throughout the life of a project, while also
maximizing opportunities, helping the project achieve its expected goals
2.3.2. The process of managing risks in technical infrastructure
construction and investment projects of PPP method
Risk management process is a logical sequence of 4 main steps:
Identifying and classifying risks; Analyze and assess risks; Handling risks
(coping with risks) through appropriate allocation of risks and proposing
solutions to minimize risks; Risk control
2.3.3. Content of steps of risk management process in technical
infrastructure construction and investment projects of PPP method

a. Risk identification and risk classification


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* Risk identification: Risk identification are the search, the
discovery, the detection and evaluation systematically and continuously
assess the risks that may affect the investment project of technical
infrastructure construction in the form of PPP and recognize its
characteristics to effectively and systematically reduce risks throughout the
life of a project, to maximize opportunities, help the project achieve its
expected goals
* Risk classification:
Risk classification is the division and arrangement of risks in technical
infrastructure construction and investment projects of PPP method,
according to a certain order at certain levels based on the similar and different
signs between them and depending on the purpose that used in the analysis of
economic activities in order to identify risks clearly, smoothly, without
duplication and without omission
* Classifying risks in technical infrastructure construction and
investment projects of PPP method
In Vietnam, as in many countries around the world, although there is no
agreement on classification, many researchers have pointed out a series of
identifiable risks, thereby dividing risks according to many different ways. In
the dissertation, based on the typical characteristic of PPP project, is the
cooperation agreement based on long-term contracts between the two partners,
the State and the Private Sector, so the author studied and Proposing 2 ways of
classification as follows:
* Method 1: In order to effective risk management according to the
scope of occurrence, the author classified general risks and specific risks
into 10 risk groups as shown in Figure 2.2.

* Method 2: In order to effective risk management according to the
impact environment of risks, the author classified risks into risks caused by
internal environment and risks caused by external environment with 8
specific groups as shown in Figure 2.3..
b. Risk analysis and evaluation:
Risk analysis is the calculation and assessment of the level of the
impact of risks on the effectiveness of the technical infrastructure
construction and investment project of PPP through the use of risk analysis
methods and measurement techniques. The risk analysis process means
calculating the probability of occurrence and the level of impact of the risk
(weighted for risks) determined to serve the next action.
c. Risk handling
Risk Allocation:
Risk allocation is the determination of which risks are allocated to whom
and when and when is reasonable, the risk should be allocated to the party


11
capable of identifying the risk, the party can best control the consequences of
the risk and the party can best handle that risk and handle the lowest cost in the
shortest possible time.
Risk response: Are reasonable activities to translate risks so as to be
conducive to project success and minimize the negative impact of threats on
project objectives. This process aims to identify effective response actions
appropriate to the project
d. Risk control:
Risk control is the use of measures, techniques, tools, strategies,
action plans, etc in order to prevent, avoid or minimize the damage,
unexpected impacts may come to the project. That is the key work,
connecting all risk management techniques of the project together which in

order to early identify risks, analyze and assess in time risks and propose
solutions to minimize risks appropriately to ensure the objectives of the
project and improve project performance.
2.3.4. Factors affecting the management of risks in technical
infrastructure construction and investment projects of PPP method
Through the current status of implementing PPP, the author realized
that many investment projects for construction of technical infrastructure in
the form of PPP in Vietnam in general and Da Nang city in particular that
have not been implemented effectively and objective causes of the problem.
This problem is due to the risk management is still limited because the
investment project for construction of technical infrastructure in the form of
PPP is also influenced by many factors. Typically, there are five major
factors affecting PPP project risk management: social factors, policy
mechanisms, management capacity, dissemination, and project
implementation. The factors are summarized through Figure 2.4. The
impact of these 5 factors greatly affects the risk management of PPP
projects.
2.4. Actual risk management in technical infrastructure construction
and investment projects of PPP method in countries around the world
and in Vietnam.
2.4.1. Actual in countries around the world
England: England is one of the countries applying the earliest PPP
and has had many experiences to succeed in implementing PPP. The issue
of risk management has been interested by many people in the UK,
typically by Li et al. (2005b) [99].
China: China has been planning and investing in road transport
systems. Therefore, the demand for capital is increasing rapidly.
Therefore, PPP is the optimal model to solve the capital problem for
transport projects in China. In order to effectively implement the PPP

12
project in China, risk management is also an issue of interest, typically:
Ke and Wang (2010a) [90]; Ke et al. (2010b) [91].
India: Recognizing the benefits of PPP from the 1990s to the
present, India is an Asian country that has widely applied PPP to
infrastructure development projects. Risk management has been
concerned and effectively implemented in PPP projects in India.
Typically, there are: Rajkumar et al (2013) [122]; Rajkumar et al (2016)
[123]
In developed countries such as Albania, Belgium, Ireland, Italy ...
PPP is also used in many investment projects to build infrastructure and
provide public services. Risk management in the project is also interested in
research, typically: N. Carbonara et al. (2015) [114]
2.4.2. Actual in Vietnam
The demand for infrastructure construction investment capital is
increasing rapidly. This situation leads to the requirement of a
comprehensive plan with long-term vision and goals for the PPP program.
However, in this context, risk management has not really been implemented
in Vietnam. Most studies have only investigated risk identification and
allocation as well as proposed total solutions for PPP projects in transport
development ([30], [72]). relating to risk management of technical
infrastructure construction investment projects in the form of PPP. Risk
management in general is still passive, only managed when risks occur, and
there is no plan to identify and respond to risks right from the start of the
project.
2.4.3. Practice of the legal system, mechanisms and policies on PPP
method in Vietnam
2.4.3.1. System of legal documents about PPP
Currently, in the legal framework governing PPPs in Vietnam, there

are the following highest legal documents: Investment Law No.
67/2014/QH13, Bidding Law No.43/2013/QH13, Construction Law
Construction No.0/2014/QH13; Public Investment Law 49/2014/QH13;
Enterprise Law No. 68/2014/QH13; State Budget Law No. 83/2015/QH13
2.4.3.2. System of lower legal documents about PPP
The Decree system related to the public private partnership form has
been constantly researched, improved and perfected through the following
stages: Decree 108/2009/ND - CP; Decision 71/2010/QD-TTg; Decree
15/2015/ND - CP; Decree 63/2018/ND – CP
In general, the new points of Decree 63/2018 / ND - CP are mainly
directed to or around the subject of the State. For investors and users, there
are no additional provisions on rights and obligations that are significantly
different from the old decree, except that some contents are presented fully,


13
clearly, closely and in a more logical sequence, creating a more transparent
feel, but project information transparency is not required.
CHAPTER 3: CURRENT SITUATION OF RISK MANAGEMENT IN
TECHNICAL INFRASTRUCTURE CONSTRUCTION AND
INVESTMENT PROJECTS OF THE PUBLIC PRIVATE
PARTNERSHIP (PPP) IN DA NANG
3.1. Situation of implementing in technical infrastructure construction
and investment projects of PPP method in Da Nang city
3.1.1. Current situation of demand for investment in construction of
technical infrastructure in the PPP
The situation in Table 3.1 shows that the demand for infrastructure
construction and investment in general and technical infrastructure in
particular is increasing, while capital from the Central Budget is limited, the
demand for foreign loans is increasing. PPP is an effective solution for

infrastructure construction and investment in Da Nang city. In the context
that the demand for investment capital for infrastructure development in the
city is very large while the budget is limited, if all the investment projects of
the city use 100% of the budget capital, there will not be enough power; If
only private investors do the project without the participation of the State,
the risk level will be higher. Therefore, PPP is a good method and an
effective tool to mobilize capital for development in the current context
3.1.2. Actual situation of PPP implementation
+ In the city of Da Nang, PPP has been implemented for a relatively
long time, from 2009 to the present.
+ Among the 42 projects of construction investment and technical
infrastructure construction in the form of PPP in Danang city, only 15
projects have been implemented or are being implemented, and 27 projects
have not been implemented. Most of the completed projects and ongoing
projects are implemented in the form of BT contracts through the method of
exchanging land for projects.
+ Therefore, Da Nang needs to have solutions and policies to
encourage PPP projects to be more diversified with many different forms of
contracts to overcome the future depletion of land fund of the city
3.2. Current situation of awareness about PPP in investment in
construction of technical infrastructure in Danang City
A quantitative research on the status of awareness of PPP forms, risk
awareness and risk management of investment project for construction of
technical infrastructure in the form of PPP has been conducted in Da Nang
City through the survey of 200 subjects combined with the survey. survey
of 24 experts from parties related to the project of technical infrastructure


14
construction investment in the form of PPP in Danang city by the author.

PPP in investing of technical infrastructure construction in the PPP
in Danang City is considered a very important form of investment, currently
there is a high demand for knowledge and investment. However, awareness
of PPP in Da Nang in technical infrastructure investment is still very
limited: most of the survey respondents are only aware of the right concept
of PPP (172 people perceive the concept correctly), most know only 3 main
types of PPP contracts are BT, BOT and BTO; 142 subjects considered that
socio - economic efficiency was the most important factor in the PPP
project, 92 subjects considered the second most important financial
efficiency; only 34 subjects knew a lot about PPP documents
The awareness about risk and risk management are also limited.
Only 31 subjects are aware of risks in PPP projects; most surveyed experts
said that risk is only determined when the project has a problem of risk, the
risk appears at the stage managed by which party is responsible for
handling. The risk is not foreseen and not allocated at the beginning, all BT
projects are mostly allocated to Investors. Only 45 subjects were interested
in and knew about risk sharing in the process of implementing PPP projects
in Da Nang city.
Through the results of the survey, the author found that the
perception of PPP in Danang is an objective cause of risk perception, risk
management in technical infrastructure construction and investment projects
of the PPP method in Da Nang city that is still limited and passive. That is
the reason why many infrastructure construction and investment projects in
the form of PPP in Danang city are not effectively implemented and many
projects have not been implemented and actualized in reality
3.3. Situation of risk management in technical infrastructure
construction and investment projects of public private partnership
(PPP) method in Da Nang city
3.3.1. General research order:
A case study on the risk management in technical infrastructure

construction and investment projects of public private partnership (PPP)
method has been conducted in Da Nang city through the following steps:
Step 1: Research the actual works that have been implemented in Da
Nang city
Step 2: Qualitative research through relevant documents at home and
abroad
Step 3: Quantitative research through a survey of 24 experts of the
parties involved in technical infrastructure construction and investment
projects of PPP method in Da Nang city by the author.
3.3.2. Actual identification and classification of risks


15
Based on the actual research through PPP projects in Da Nang city,
the author has compiled a list of 41 risks, combining domestic and foreign
research through the collection of secondary data from Relevant documents,
the author initially identified 59 risks of technical infrastructure
construction investment project in Da Nang city. On that basis, through
direct surveys from experts, with the creation of hypotheses and testing of
hypotheses in quantitative research conducted by the author, the results
identified 59 risks of PPP project in the technical infrastructure construction
investment project in Da Nang city, which is classified into 10 groups
according to the scope of occurrence of risks and classified into 8 groups of
results according to the environment of impact of risks.
The list of risks has been summarized and generalized into a concept
through Appendix 16 (Page 92, PL)
3.3.3. Situation of risk analysis and risk ranking
a. Actual situation of analyzing and ranking risks in case of classifying
risks according to the scope of occurrence of risks
In order to effectively manage risks according to the scope of

occurrence, the author classified general risks and specific risks into 10 risk
groups are shown in Figure 2.2.
Results of ranking the level of risk for the risk groups of the
investment project for construction of technical infrastructure in the PPP in
Da Nang city are shown through Table 3.6.
b. Situation of risk analysis and ranking in case of classifying risks
according to the impact environment of risks
In order to effectively manage risks according to the impact
environment of risks, the author categorized risks caused by internal
environment and outside risks caused by projects outside the project into 8
specific groups are shown through Figure 2.3
The results of ranking the level of risk for the risk groups of the
investment project for technical infrastructure construction in the form of
PPP in Da Nang city are shown through Table 3.7.
3.3.4. Situation of risk allocation
On the basis of direct survey of 24 experts who have been doing the
project of constructing technical infrastructure construction project under
PPP in Da Nang city. Through SPSS.16 software, the author has analyzed,
calculated and checked the consistency in the evaluation of experts, the
author proposed risk allocation solution for the State and Investors or
allocated to both parties.
An expert survey was conducted to find out the priority in risk
allocation of stakeholders in the PPP of technical infrastructure construction
and investment project in Danang City. Analysis of feedback data shows


16
that: Risks should be best allocated (standard allocation) to the State with 6
risks, to investors with 27 risks and to both parties to 26 risks. However, in
reality only 2 risks accounting for 3.39% were allocated to the State sector,

38 risks accounting for 64.41% were allocated to both parties and 19 risks
accounted for 32.20% were allocated. Complementary to investors. Thus,
most of the risks are allocated to the two parties to bear the same risks, the
State bears only very few risks. The allocation results are summarized in
Table 3.8.
3.3.5. The information technology application situation in the PPP of
risk management in project
In the world:
+ There have been many studies focusing on developing a
quantitative model that to solve various problems in risk management of
technical infrastructure construction and investment project of the PPP
method.
+ Most of those studies only stop at setting up software to apply each
model separately to solve each problem that arises in the risk management
of technical infrastructure construction and investment project of the PPP
method.
In Vietnam:
+ No research has been conducted on applied research integrating
many quantitative models to solve many different issues in risk
management of PPP projects, no studies have applied the information
technology to build software integrates many models that to solve many
problems of risk assessment and analysis in risk management of the PPP
projects.
+ The research is just limited to the study of model theory and the
application of manual tools to solve the model, there is no research and
application of information technology in risk analysis to manage risks
effectively in the PPP project
3.3.6. Causes of risks for investment projects on construction of
technical infrastructure in the PPP in Da Nang city
Based on the analysis of the status of the implementation of PPP

projects in general and the risk management of the technical infrastructure
project construction and investment in the PPP in particular in Danang City,
there are many causes of risks for the technical infrastructure construction
project according to PPP that makes many PPP projects implemented
ineffectively
3.3.7. Evaluation the status of risk management in technical
infrastructure construction and investment projects of the PPP method
in Da Nang city


17
Risk management has not been given adequate attention; The
process of allocating risks is usually determined when the project has a
problem, the risk occurs at the stage managed by the party, that party is
responsible for handling, there is no mechanism to identify risks and
allocate risks. ro from the beginning. The application of information
technology in evaluation analysis to manage risks has received little
research attention
CHAPTER 4: ORIENTATIONS AND SOLUTIONS TO
PERFECT THE RISK MANAGEMENT IN TECHNICAL
INFRASTRUCTURE CONSTRUCTION AND INVESTMENT
PROJECTS OF THE PUBLIC PRIVATE PARTNERSHIP (PPP) IN
DA NANG
4.1. Orientation for development of technical infrastructure of Danang
city to 2030, vision to 2045
4.1.1. Orientation for development of Danang city to 2030, vision to
2045
Development orientation to 2030 and vision to 2045 of Danang city
is “Danang strives to become a green city, modern - intelligent, global and
identifiable, with the following characteristics: Green City; modern - smart

city: having modern technical infrastructure and management mechanism,
applying modern technologies on the basis of industrial revolution 4.0;
Global cities: global connectivity and connectivity; The city has its own
identity: worth living and memorable”
4.1.2. The objective of developing the technical infrastructure of
Danang city till 2030, with a vision to 2045
On the basis of the technical infrastructure development orientation
to 2030 and a vision to 2045, Da Nang city sets the goals: Socio-economic
development in line with the development orientation of the whole region
and the country; It is truly a major economic center and a strong growth
area of the Central Coast - Central Highlands
4.2. Orientation of solutions to complete the risk management in
technical infrastructure construction and investment projects of public
private partnership (PPP) method in Da Nang city
The solution must satisfy the following two criteria: Firstly, it must
meet the balance of benefits for both public and private sides in controlling
and controlling risks. Secondly, it must be clear, transparent, feasible and
highly effective according to the project's objectives. The solution besides
contributing to minimizing risks in the direction of strategy and overall, also
contributing to proposing the solution in detail, specify on the basis of each
cause of risk and each factor causing risk


18
4.3. Solutions to complete the risk management in technical
infrastructure construction and investment projects of public private
partnership (PPP) method in Da Nang city
4.3.1. Solutions to perfect the system of legal documents related to the
public private partnership
4.3.1.1. Supplementing fully, synchronously and unifying legal

documents
According to this solution, the author proposes that it is necessary to
develop a system of PPP laws, other related legal documents should be
considered, amended and supplemented at an appropriate time.
4.3.1.2. Supplement and complete the Decree 63/2018 / ND - CP on
investment in the public private partnership
Under this solution, the author proposes that it is necessary to
finalize Decree 63/2018/ND-CP in place of Decree 15/2015/ND-CP by
adding a number of relevant issues.
4.3.2. Solution of organizing the implementation of risk management in
technical infrastructure construction and investment projects of the
PPP method in Da Nang city
4.3.2.1. Current status of PPP project risk management apparatus
Under this solution, the author proposes the need to establish a
professional PPP project management apparatus, perfecting the existing
management apparatus through the addition of experienced PPP
implementation resources.
4.3.2.2. Establishing a professional department to manage PPP project
risks
For Competent State Authorities: It is necessary to set up a
professional department to manage risks for each PPP project in the
investment project of technical infrastructure construction.
For the State: There should be a specialized inter-agency agency
with the participation of each relevant ministry or specialized branch
To well carry out the risk management in technical infrastructure
construction and investment projects of the PPP method, it is necessary to
focus on well implementing the contents of risk management organization
work.
4.3.3. Solutions to improve the capacity of implementing technical
infrastructure construction and investment projects in the public

private partnership
4.3.3.1. Raising awareness of risks and managing risks in projects
implemented about the PPP
- Setting and implementing training plans about awareness of PPP
forms, awareness of risks and risk management of PPP projects


19
- Promote the development of propaganda and dissemination
knowledge of PPP form, knowledge of risks and knowledge of risk
management in PPP projects
- Increase integrating relevant knowledge on PPPs into teaching
4.3.3.2. Improve the professional qualifications, capacity and
experience of officials and organizations performing risk management
in projects implemented about the PPP
- Need training project about awareness and knowledge of PPP
forms as well as legal knowledge and project implementation capacity.
- Establishment of Project Supervision Committee
- Strengthen development and focus on collecting and accumulating
data related to risks and managing risks during project implementation.
- Improve the information technology capacity of project executives
in the PPP method
4.3.3.3. Reforming the management mechanism of the State
The State needs to strengthen reform of the management of contract
making and implementation
Each specific project also needs to be concerned, there should be a
mechanism to ensure the objectivity and fairness in attracting investment in
the PPP method.
The state needs to reform its state management institutions or set up
separate state management agencies.

The PPP projects should be held openly
4.3.3.4. Increasing the participation and supervision of the community
in the risk management in technical infrastructure construction and
investment projects of the PPP method
According to this solution, the author proposes that there should be
community participation and supervision in the implementation as well as
risk management in technical infrastructure construction and investment
project of the PPP method in Danang city.
4.3.4. Solutions to complete the risk management
4.3.4.1. Complete solution for risk allocation process
The current actual risk allocation process in Danang City is shown in
Figure 4.2. As such, the State plays a decisive role in allocating risks and
selecting risk management subjects.
In order to reduce the burden on the State as well as competent
project management agencies, the author has studied, additional, complete
the process of risk allocation according to Figure 4.3.
4.3.4.2. Complete solution for risk management process
The risk management process is shown in Figure 4.4. The risk
allocation process in Figure 4.4 shows the content of the steps of risk


20
management and shows the specific work content in each step of the
process, helping the State to control and manage risks that is proactively
and effectively
4.3.5. Solutions to perfect the project implementation in the PPP
method
4.3.5.1. Completing the order of implementing in technical
infrastructure construction and investment projects of the PPP method
The sequence of implementing PPP projects in the technical

infrastructure construction and investment is shown in Figure 4.5.
According to this solution, the author proposes that the State should
consider the proposal to shorten the implementation time of PPP projects to
create favorable conditions for investors when implementing PPP projects.
On the other hand, it is necessary to add the re-evaluation of the feasibility
study report into the implementation sequence in Figure 4.5 in order to
increase the effectiveness of the project's feasibility selection, support to
minimize risk of selection, select an inappropriate project
4.3.5.2. Complete the process of evaluation and selection of investment
project proposals in the PPP prepared by the investor
The process of evaluating and selecting proposals for the technical
infrastructure construction and investment projects of PPP, that is shown in
Figure 4.6. Under this solution, the author proposes to build and use a set of
general evaluation criteria and detailed evaluation criteria shown in Table
4.2 and Appendix 27 (Page 136, PL)
4.3.5.3. Completing the bidding order for investor selection
The order of bidding for selecting investors to implement technical
infrastructure investment projects in the form of PPP is shown in Figure 4.7.
According to this solution, the author proposes in the stages of the bidding
process, the selection of investors needs the State to build and announced
set of specific and detailed evaluation criteria for each period in order to
limit risks and enhance fairness and transparency in bidding. For the stage
of negotiation, completion and signing of contracts: The State needs to
reduce the legal procedures, shorten the negotiation time, build contracts on
the principle of ensuring the balance of expected benefits for both public
parties and private parties
4.3.5.4. Complete the order of evaluation of the feasibility study report
of the project
The order of appraisal of the feasibility study report of the
investment project in the form of PPP is shown in Figure 4.8. Based on

the project appraisal order established under the State regulations, the
following issues need to be supplemented and completed:
+ When evaluating the necessity of the project: It is necessary to


21
pay more attention to the evaluation of the suitability of the project with
the planning, development plans of branches, regions and socio-economic
development plans of the locality; Influence level of related projects;
Clearly analyze the advantages of project investment in PPP form
compared to other investment forms
+ When evaluating the basic elements of the project: It is necessary
to propose many compensation, site clearance and resettlement options to
select the project with the best and beneficial resettlement assistance
compensation plan for people in the project area, in order to minimize
risks posed by the people
+ When evaluating the effectiveness of the project: Specific
quantitative indicators need to be built to accurately assess the project's
effectiveness.
+ When evaluating the feasibility of the project: Need to set up
detailed and specific evaluation criteria to select the project correctly;
propose many financial options on the basis of the effect of service price
(fee) and capital structure on project efficiency; propose multiple capital
allocation plans taking into account the effect of monetary value over time
+ When assessing the suitability of the project contract:
Quantitative model should be applied to select the appropriate type of
contract (AHP model) and select the appropriate transfer period. It is
necessary to clearly identify the list of risks in an adequate manner,
allocate risks appropriately together with proposing solutions to minimize
risks suitable for each risk and each specific project.

+ When appraising the project implementation plan, the project
monitoring and management mechanism: It is necessary to clarify and
provide sufficient specific processes of stakeholders to take the initiative in
implementation, management and project monitoring
4.3.6. Solutions of coping with risks to relevant parties of the State
Solutions to cope with risks of investment projects on construction of
technical infrastructure in the form of PPP in Da Nang city are generalized
through Figure 4.9. Under this solution, the competent State authority and
Da Nang City need to have specific detailed solutions to minimize risks,
avoid risks, transfer risks or accept the most reasonable risks
4.3.7. Solutions to minimize risks according to the impacting
environment and by subjects causing risks
The author proposes solutions to minimize risks for entities
according to the project's impact environment, which is summarized
through Appendix 28a (Page PL139) and Appendix 28b (Page PL153).
Under this solution, the State needs to supervise and ensure the


22
implementation of the Investors' solutions in order to minimize project risks
and ensure balanced benefits for both the State and the Investors
4.3.8. Information technology application solution to support risk
analysis in managing risks of technical infrastructure construction and
investment projects of the PPP method in Da Nang city
4.3.8.1. The goal of the program
+ The PPP project evaluation and analysis software system is a
decision support system to help minimize risks during the implementation
of a technical infrastructure construction investment project in the form of
PPP. The software uses VBA programming language on Excel platform
with integrated models such as Monte Carlo simulation, AHP hierarchical

analysis, win - win negotiation. Supporting software helps the State and
investors to calculate and analyze the project's financial risks, thereby
finding the optimal capital structure for the project; assisting the State in
making decisions on project selection, ranking of technical infrastructure
investment projects in the form of PPP; assisting the State in making
decisions on project selection quickly through negotiating the time for
transfer of a BOT project to ensure a balance of interests for stakeholders.
+ After entering all data, the software tool will automatically process
the data and give the desired result.
+ The software exports the results as Excel spreadsheets and tables
to serve for printing and archiving.
+ The software supports accessing data quickly and conveniently on
a user - friendly interface, saving time and money
4.3.8.2. Function of risk assessment analysis program of PPP project
Through the use of Excel-based VBA programming language with
integrated quantitative models such as Monte Carlo simulation, AHP
hierarchical analysis, win - win negotiation, the author has built the
software risk assessment of PPP projects in technical infrastructure
construction and investment with the following functions:
Functionality of PPP project financial efficiency
Function of financial risk analysis thereby optimizing capital
structure
Functions supporting decision-making hierarchical analysis of
AHP criteria to select and rank technical infrastructure construction
investment projects in the form of PPP
Negotiation support function under the Win - Win (Win - Win)
model to determine the transfer time of a technical infrastructure project of
the PPP
4.3.8.3. Program test results
+ Function of calculation of financial efficiency of PPP project is

23
shown in Appendix 29 (Page PL156)
+ The function of analyzing financial risks thereby optimizing the
capital structure is shown in Appendix 30 (Page PL160)
+ AHP multi-criteria hierarchical decision-making support function
to select and rank investment projects on technical infrastructure
construction under PPP form is shown in Appendix 31 (Page PL164)
+ The function of negotiating support according to the Win - Win
(Win - Win) model in order to determine the transfer time of a technical
infrastructure project in the form of PPP is shown in Appendix 32 (Page
PL169)
CONCLUSION
1. Conclusion
Based on the research methods that have been used in combination
with theoretical and practical science, the dissertation has contributed a lot
of new risk and risk management in technical infrastructure construction
and investment projects of the PPP method. The dissertation has solved a
number of contents as follows:
One is to systematize, clarify and supplement the theoretical and
practical basis for risk management in technical infrastructure construction
and investment projects of the PPP method.
Secondly, Analyze the current situation of risk management in
technical infrastructure construction and investment projects of the PPP in
Vietnam in general and Da Nang city in particular through qualitative
methods such as: list, analyze, evaluate data reported in Vietnam and some
countries in the world and through quantitative survey methods
Thirdly, Proposing scientific and feasible solutions to complete the
risk management in technical infrastructure construction and investment

projects of the PPP method in Da Nang city through risk identification, risk
classification, risk analysis and risk control
Fourthly, Using SPSS.16 tool to identify factors affecting PPP
awareness in Da Nang city and risk classification, risk ranking, risk
allocation
Fifthly, Research and application of quantitative analysis models,
thereby proposing the construction of information technology application
software to analyze and assess risks, support quick decisions to manage
risks of investment projects on construction of technical infrastructure in the
form of public private partnership effectively.
2. Suggest
Based on the research results obtained, the PhD student has some
recommendations as follows: In order to effectively manage risks for