Determination of risk identification process employed by NHS for a PFI hospital project in the UK
Abstract: Long-term concession
contracts associated with Private Finance Initiative (PFI) projects, such as
National Health Service (NHS) hospitals, are subject to substantial risks,
which may not only emerge from project activities such as design and
construction, but also from global issues beyond the control of project
parties, such as commercial, legal and political risks. Therefore, the
principal parties involved must manage risks effectively and efficiently, as
early as the project initiation stage, in order to ensure a successful
delivery. The aim of this paper is to examine the risk identification process
of the NHS PFI hospital in the UK, as a case study, in order to determine the
techniques used in risk identification, and their significance, based on
estimated probabilities of occurrence. These objectives were achieved through
interviews with key personnel within the NHS Trust involved. Results found the
sole technique used in risk identification to be brainstorming, through which
more than thirty risks were identified and classified under six risk
categories: planning, pre-commissioning, design, land purchasing, construction
and operation. Thirteen risks were identified as significant based on their
estimated probability of occurrence had the project been developed via public
procurement. The results of this research will enable public sector clients
like the NHS Trust to not only identify the significant risks, which will allow
them to focus more attention on developing appropriate mitigation strategies
and contingency plans, but also to improve its risk identification process
through the use of other techniques in order to support findings from the
brainstorming process.
Keywords: National Health
Service, Private Finance Initiative, Risk identification, Public Procurement
Author: F. E. Mohamed Ghazali,
Shahid Kabir
Journal Code: jptindustrigg090028
