Risk Allocation and Mitigation in Nigeria’s Privatisation Programme—A Case Study of Electric Power Sector Privatisation

Under the Nigerian privatisation programme, the issues of risk allocation and mitigation were never always properly handled. Historically, there had always been a tendency to dump all the project risks on the private sector partner without properly evaluating whether it was capable of managing them. Extant literature has shown that where the comparative advantages of parties to handle risks are not properly taken into consideration, the allocation of risk is unbalanced and the tendency for the project to run into difficulties and/or fail increases. This paper looks at the electric power sector privatisation, distilling how key project risks were handled under the exercise. This should be a good pointer as to whether the privatisation exercise would be a success in the long run.

A Brief Analysis on Risk allocation for Public-Private Partnership Projects in China

Public-Private Partnership （PPP） financing modalily has the ability of alleviating the budgetary pressure to the government. fulfilling the need of infrastructure development, and improving the efficiency of investment and operation. However, the negotiations between the government and the investors are time-consuming and costly, due to the perspective differences in risk allocation and revenue distribution. Disputes often arise during concession period because of changes in various risks or non-performance of its obligalions, especially when one sector was forced to accept the requirements by the other as a result of the unequal status, the project urgency or other reasons. Only a few PPP projects in China could perform successfully. There is therefore a need to develop an equitable risk allocation mechanism for the delivery of PPP projects in China so as to improve the efficiency of private investment in infrastructure development.

Risks and new transformations of PPP contracts

This paper tries to demonstrate that the principle of the risk allocation based on the balance is the most effective way to resolve the risk allocation problems of public-private partnership （PPP） contracts and presents suggestions how to carry out this principle. For PPP projects, it is necessary to set up a workable and commercially viable risk sharing mechanism to satisfy the different interests and the objectives of both the public sector and the private sector. An effective risk allocation mechanism is not only an important part in preparing project documents, but also an essential part in the success of PPP contracts. Risk allocation can be represented in a risk matrix. The more balanced the risk allocation is, the lower the risk degree of PPP contracts is. Therefore, the most effective risk allocation of PPP contracts is that the public sector and the private sector take part in risk management together in all the stages of the project and allocate the balanced risks. The outcomes of this paper can be used by both the public sector and the private sector to make a good choice of the PPP contract form.

Research on The Factors Affecting Profit Allocation Based on Virtual Supply Chain

Traditional profit allocation solutions cannot be effectively applied to the practice for the limitations in their premises and principles. This paper based on the practical processes of virtual supply chain performs analysis on major factors relative to cost and risk which effect the profit allocation among the partners, and then proposes the quantitative relations between the factors and profit allocation. The relations can serve as a base for further research on extensive profit allocation model.

Trade Credit and Buyer Financing

This study investigates trade credit and early payment financing in a three-party supply chain consisting of a manufacturer,a capital-constrained distributor,and a retail platform.The manufacturer or the platform provides the financing service to the distributor.Two different leadership structures are investigated,namely,platform and manufacturer leadership Stackelberg game,where the platform or manufacturer first makes the decision,respectively.Under trade credit financing,the manufacturer and the whole supply chain face loss when the commission rate increases.However,under buyer financing,they benefit from the high commission rate.Under platform leadership,the distributor,the manufacturer,and the supply chain perform better with trade credit if and only if the commission rate is small or the production cost is high,while the platform always prefers buyer financing.Under manufacturer leadership,the distributor,manufacturer,and supply chain perform better with trade credit under low production cost and commission rate.The platform prefers trade credit when production cost is in the intermediate range.By further analyzing the case that both financing channels are available and the distributor decides which one to choose,we find that the financing services competition hurts only the platform's profits.And under certain conditions,trade credit and early payment can achieve the same performance for every supply chain member.These findings enhance our understanding of the supply chain risk allocation efficiency of trade credit and early payment financing under different leadership structures.Neither risk allocation form outperforms the other,and the relative efficiency depends on supply chain characteristics.