Abstract/Summary

Public-Private Partnership (PPP) is essential for accelerating sustainable development as it combines public goals with private sector efficiency leading to improved service delivery and less financial burden on governments. It is a project delivery model that is based on long-term contractual arrangements where the private sector provides services including engineering, construction, and operation of public infrastructure taking the financial risk. At the project development stage, private sector carries out financial risk assessment to ensure economic returns from a PPP investment and secure funding for the project. In this paper, we present a Bayesian Belief Network (BBN)-based model that can be used to assess financial risks, particularly level of profitability in PPP projects. The proposed model was developed considering PPP projects in the healthcare sector and validated by using the data regarding PPP hospital projects in Turkiye. Findings demonstrate that the BBN model is useful for capturing interdependencies between risks resulting in different scenarios and provides an effective decision support for investors in PPP projects. It contributes to the literature by offering a novel application of probabilistic risk assessment to provide better understanding of interrelated risk factors that may result in different financial scenarios. The model can be used by private sector to assess risk, estimate profitability and develop risk mitigation strategies in PPP healthcare projects, which may increase project success contributing towards social, environmental and economic sustainability.