Volume List  / Volume 10 (2)



DOI: 10.7708/ijtte.2020.10(2).05

10 / 2 / 187 - 198 Pages


Sukmo Ku - Department of Public Finance and Social Policy, Korea Development Institute, Sejong-si, Korea -

Hong Ki An - Faculty of Transportation Engineering, Huaiyin Institute of Technology, Huai’an, China -


Less traffic than expected and low toll revenue from the construction of transportation on infrastructure such as roads and railways are causing business failure. However, it is a reality that the responsibility of this failure is only due to the prediction accuracy of the model analyzing the demand. This is because traffic risk is always present in Public-Private Partnership (PPP) projects and government, concessionaire, and financial investors need to be managed in terms of risk such as reducing the traffic risk through clear forecasting techniques and appropriate project structure selection. In this study, we investigated what traffic risk is, and quantified the risks by measuring the traffic risks and the case analysis with a road PPP project. As a result, the traffic risk of road PPP project was estimated to be 19.3% on the average demand reduction risk compared to predicted traffic volume. In case analysis, it was analyzed as high revenue risk project because of 86.38% risk that refund given to the government by the private sector could be lower than Korean Won (KRW) 62.4 billion (USD 55.5 million), and 88.67% risk that operating period subsidy could be generated. This analysis is meaningful in that it quantifies traffic risk that we know intuitively or qualitatively. Thus, it is expected that the risk analysis based on a clear understanding of the nature of future traffic risks will be the basis of successful PPP projects.

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