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 : Assoc Prof Dr Ngo Thi Thanh Van Reviewer : Dr Nguyen Pham Quang Tu This dissertation will be defended before a Jury at the National University of Civil Engineering At am on …… This dissertation can be found at the National Library and also at the Library of the National University of Civil Engineering INTRODUCTION 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 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 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 Object and scope of research - Object of research: Study risk management in technical infrastructure construction and investment projects of PPP method of the Government - 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 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 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 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 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 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 risks of investment projects on construction of technical infrastructure in the form of public private partnership effectively The structure of the dissertation The structure of the dissertation consists of Introduction, 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 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 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 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 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 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 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 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 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 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 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 risks, to investors with 27 risks and to both parties to 26 risks However, in reality only 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 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 Suggest Based on the research results obtained, the PhD student has some recommendations as follows: In order to effectively manage risks for 24 technical infrastructure construction and investment projects of the publicprivate partnership in Da Nang city, the parties have The following should be done to ensure the following: The first is for the Government and the National Assembly: + Need to improve the system of legal documents on PPP method + Information must be publicized, ensuring transparency during project implementation in PPP method + The State should strengthen the management of project implementation process, need a comprehensive system of regulations and procedures, strictly enforce sanctions against competent agencies in case of wrong appraisal The second is for Danang city: + Need support mechanism, the commitment of the city during the implementation of the project Need to develop and publicize the process of guiding the implementation of the project + Strict sanctions against when operating projects are ineffective + Need to raise public awareness about PPP method, improve management capacity, provide more professional training for staff implementing PPP projects + Building and perfecting a system of data related to the PPP project, data on risks and risk management during PPP project implementation in Da Nang City + Research and application of information technology in risk assessment analysis to effectively manage risks The third is for Investors: + Need to select contractors with enough experience and capacity to implement the project Development trend of the dissertation With the research results of the dissertation, the author wishes to complete the risk management software program, namely building a database system of identified risks for the technical infrastructure construction and investment project of the PPP in Danang city includes: name of risk; type of risk; Level of influence of risks; Risk allocation to whom; Specific measures to minimize that risk Integrating the risk database and the system of application tools to automate quantitative analysis models to analyze risks in order to propose risk management solutions quickly and effectively Thereby, completing the program of analysis, calculation and risk management to help expedite the process of calculating and negotiating and negotiating risks for the technical infrastructure construction and investment project of the PPP that is implemented quickly and effectively 25 LIST OF PUBLISHED SCIENTIFIC WORKS BY AUTHOR RELATED TO THE DISSERTATION [1] Pham Thi Trang (2016), "Research and development risk management procedures in process of construction contracts", Proceedings of the conference "Advanced construction technology towards sustainable development for the first time" "ATCESD2016, pp 173 – 179, ISBN: 978 – 604 - 82 - 2016 - [2] Pham Thi Trang (2017), " Financial risk controlling of public-privatepartnership transportation projects in Vietnam ", Journal of Science and Technology, The University of Danang, No.8.2017, pages 102 – 107, ISSN 1859 – 1531 [3] Pham Thi Trang, Phan Cao Tho (2017), “Applying the multimedia Highlights Analysis form AHP to selection and ratios of infrastructure investment Project under The form of Public Partnership (PPP) in Da Nang” Journal of Science and Technology, The University of Danang, No.11/2017, pp 90 - 96 (Book 1), ISSN 1859 – 1531 [4] Pham Thi Trang, Nguyen Huy Thanh (2017), "Awareness and and levels of risk management in infrastructure investment projects under the form of public-private partnership in Danang", Journal of Science and Technology, The University of Danang, No.11/2017, pages 90 - 96 (Q 3), ISSN 1859 – 1531 [5] Pham Thi Trang (2017), " Identifying and priority ranking in technical infrastructure investment projects in Public private partnership in Da nang", Vietnam Journal of Construction, No.3/2018, ISSN: 0866 - 8762 [6] Pham Thi Trang (2018), "Identifying and classifying of the risks in the projects of technical infrastructure of public private partnership (PPP) in Danang", Vietnam Journal of Construction, No 8/2018, ISSN: 0866 - 8762 [7] Pham Thi Trang (2018), " Risk allocation in the public private partnership (PPP) of technical infrastructure projects in Da Nang", Vietnam Journal of Construction, No.9/2018, ISSN: 0866 - 8762 [8] Pham Thi Trang (2018), " Risk management: Awareness, Identification and Mitigation in PPP of technical infrastructure Projects in Da Nang", The 4th internationnal conference on Green technology and sustainable development, IEEC [9] Pham Thi Trang, Phan Cao Tho (2019), "Research and development of software for optimize capital structure and risk analysis of financial in public-private partnership projects in Viet Nam", Journal of Science and Technology, The University of Danang, No.05.(17).2019, ISSN: 1859-1531, Pages: 25 – 29, ISSN 1859 – 1531 ... 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... 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 : Assoc Prof Dr Ngo Thi Thanh Van Reviewer : Dr... impact environment of risks, the author categorized risks caused by internal environment and outside risks caused by projects outside the project into specific groups are shown through Figure