PAPER TITLE :DEVELOPING FRAMEWORK FOR RISK ALLOCATION OF SELECTED CONCESSION- BASED CONSTRUCTION CONTRACTS IN LAGOS STATE, NIGERIA

JOURNAL Of SUSTAINABLE TECHNOLOGY | VOLUME 9 NUMBER 2 2018

Paper Details

  • Author(s) : SANNI, G.A.1; JAGBORO, G.O.2 and OJO, G.K.2*
  • Abstract:

The performance of concession contracts is largely influenced by optimality of risks
allocation between the public and private partners. Individual partner needs post-mortem-based
knowledge of operating concession contracts to serve as a guide in risks preference. This paper
examined risk allocation of two concession contracts in Lagos State with a view to developing a
framework for enhanced risk allocation using case study research method. Lekki Infrastructure
Project (LIP) and General Aviation Terminal Building of Murtala Mohammed Airport (MMA2)
project were used as case studies. Study population comprised key public and private sectors
participants who were principals, regulatory agencies, promoters, contractors, consultants, credit
lenders and facility users. The study made used of primary data collected through structured
questionnaire and unstructured interview. The survey responses were statistically analysed using
Risk Allocation Index (RAI) which is simple majority rule of e”50% consensus among respondents.
Twenty five (25) risks associated with concession projects were identified, and evaluated by surveyed
respondents on how the risks should have been allocated based on the performance of the projects
since inception to date. Findings revealed that nine risks were preferred to the private sector; six to
the public sector; five to be shared between the public and private sectors; while five were to be
determined by project portfolios. Finance and construction-related risks were preferred to be allocated
to the private sector; political and macro-economic risks were preferred to the public sector; post
construction and operating risks should be shared among the sectors whereas design-related risks
were to be project-specific. Therefore, extensive risk management is recommended for projectspecific
risks.
Keywords: Allocation, Concession, Framework, Public and Private Partners, Risks