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Identification of Risk Factors Affecting PPP Waste-to-Energy Incineration Projects in China: A Multiple Case Study.

1. Introduction

The amount of municipal solid waste (MSW) is constantly increasing in China because of its rapid development of urbanisation and industrialisation in the past three decades and continuous improvement of resident living standards. The annual amount of MSW generated reached 203.6 million tonnes in 2016 [1] and is expected to expand to 220 million tonnes by 2020 [2]. The sharply increased in MSW generation over the years puts pressure on such existing MSW disposal methods such as landfill and compost and resulted in a dilemma of "garbage siege" [3].

Incineration is considered the best way to treat the MSW due to low resource consumption, obvious physical volume reduction, less secondary pollution, and energy-recovery [4-6]. Consequently, waste-to-energy (WTE) technology has developed rapidly to provide an effective solution for government to alleviate the pressure of MSW disposal in past decades. WTE incineration in China has developed rapidly since 1988, when Shenzhen built the first WTE plant. According to statistics from the National Bureau of Statistics of China, incinerated MSW increased from 3.70 million tonnes in 2003 to 73.79 million tonnes in 2016, with the number of incineration plants increasing from 47 to 249 over the same period [1, 7].

Meanwhile, subject to budget constraints, lack of management capacity, and other factors, it is difficult for the government to construct and operate high-investment, long-term WTE incineration projects alone. To address the increasing need for WTE facilities, the public-private partnership (PPP) arrangement has been widely used to construct and operate WTE incineration projects, taking advantage of the innovation, know-how, flexibility, and financing provided by the private sector [8,9]. In China, more than 70% of WTE incineration projects are now operated and supervised by PPPs, and 108 PPP WTE incineration projects with a total investment of CNY 489 billion were deployed from 2012 to 2016 [8, 10].

However, due to the long concession period, involvement of various participants, external uncertainties, and other reasons, PPPs in the WTE incineration industry face more risks than traditional public projects [11-13], which affect their performance and hinder the application of WTE incineration technologies in the MSW disposal industry. In fact, ineffective risk management in the PPP WTE industry has resulted in failure of many incineration projects to reach their expected performance [14, 15]. According to risk management theory, risk identification is the basis of risk analysis and response and is crucial to the performance of risk management [16, 17]. It is therefore essential for both government and WTE private sector investors to have a clear understanding on the risks involved in PPP WTE incineration projects and to establish suitable responsive strategies accordingly.

Nevertheless, although there is ample literature concerning PPP risk identification and analysis, very little is related to the identifications of risk factors affecting PPP WTE incineration projects. Most PPP studies have been conducted to identify risk factors in such other industries as transportation [18], water supply and treatment facilities [19], energy facilities [20], and medical facilities [21]. In addition, the identified critical risk factors of PPP WTE incineration projects vary significantly between countries because of their unique social-economic environments, policies, and regulations [14, 22]. In China, Song et al. [4] and Xu et al. [23] have identified the critical risk factors affecting PPP WTE projects through case studies. However, the cases involved are insufficiently representative to reflect the status of China's PPP WTE industry because their risk events occurred before 2012, when the central and local governments introduced a series of new policies and regulations related to the PPP WTE industry [24].

In response, we conducted a multiple case study to identify the risk factors affecting PPP WTE incineration projects in China over the past decade. The results pave the way for the risk analysis, allocation, and response of PPP WTE incineration projects and are expected to shed light on their performance improvement as well as the development of the PPP WTE industry throughout the country.

2. Research Methods

The research methods used in this study comprise a comprehensive literature review and multiple case studies. The flow of the overall research framework is shown in Figure 1.

2.1. Literature Review. As the most commonly used method of risk identification, risk checklists depend on historical data and experience to list the risk factors of similar projects in a logical order [25]. Accordingly, the literature review provides an auxiliary method of building a risk checklist favoured in many studies [26-29] and is thus conducted here to identify the general risks involved in China PPP WTE incineration projects.

The Web of Science was used for the literature research because of its comprehensive coverage of journals worldwide. To address the local literature, the Journal of Engineering Management (in Chinese), Construction Economics (in Chinese), Journal of Civil Engineering and Management (in Chinese) and Project Management Technology (in Chinese) were chosen via the China National Knowledge Infrastructure (CNKI) database because they are the most widely recognised construction management Journals in China.

The acronym "PPP," which is used to specifically represent the noun "public-private partnerships," is mentioned in the literature in a variety of forms [2, 30], such as public-private partnerships (PPP), build-operate-transfer (BOT), private finance initiative (PFI), and design-build-finance-operate (DBFO). Therefore, in order to ensure integrity and accuracy, a keyword search process was conducted using the schema of TITLE-ABS-KEY ("public private partnership" OR "build operate transfer" OR "private finance initiative" OR "design build finance operate" OR "PFI" OR "BOT" OR "PPP" OR "DBFO") and TITLE-ABS-KEY ("risk"). From the literature retrieved in this way from selected databases or journals, articles with clear figures, tables, or text descriptions of the identified risk factors were chosen for further content analysis. This involved a total of 54 articles, including 16 Chinese articles and 38 English articles.

The most simple and effective method of identifying risk factors is to establish a risk checklist [31]. This was created in three steps: (1) the risk factors related to PPP infrastructure projects were identified through a comprehensive literature review; (2) these were carefully examined by deleting the inherent risk factors of some categories of PPP projects, for example, the safety risk in PPP highway projects caused by overload and combining risk factors with the same meanings but using different terms; and (3) the risk checklist was established with a clear hierarchical structure through a synthesised risk classification drawn from the literature.

Based on the comprehensive literature review, the risk checklist composed of 54 risk factors was established (Table 1). This follows the classification method of PPP risk factors proposed by Li et al. [26], where the risk factors are divided into three levels, that is, macrolevel, mesolevel, and micro-level. According to Li et al. [26], macrolevel risks refer to the risks outside the project, mesolevel risks refer to the risks within the project, and microlevel risks refer to the risks of the relationship between stakeholders.

2.2. Multiple Case Studies. The present study aims to identify the "what" and "how" risk factors affecting PPP WTE incineration projects in China. Case studies are appropriate t answer such questions [32]. Meanwhile, PPP WTE incineration projects are still in their infancy in China and relevant studies are limited. For a new or insufficiently researched field, case studies are the preferred method [33]. Moreover, a single case study is contextually stronger and is not conducive to summarising general rules and promoting the research results [34]. As a result, a variety of case studies are used to provide a range of contexts. The flow of the multiple case studies comprises the following four steps:

(1) Determining Standards for Case Selection: in order to fully reflect the current status of China's WTE industry and to ensure the comprehensiveness and representativeness of the cases, the criteria for case selection are as follows: (1) the WTE incineration projects are operated by PPP arrangement, such as BOT and DBFO; (2) risk events significantly that affect their performance occurred during the project lifecycle; and (3) except for some typical and significant cases, the risk events involved occurred after 2012.

(2) Case Selection and Data Collection: the systematic analytic process for case selection followed [35]. First, a wide range of sizable samples of actual WTE incineration plants that were heavily affected by the occurrence of a variety of risk events were collected from the literature, research reports, newspapers, and the Internet. Second, a total of 35 cases, which is far more than the usual requirement for multiple case studies [33], were selected as study cases to identify the critical risk factors by using the criteria for case selection determined above. Third, detailed information relating to these selected cases was collected from the Internet, industrial reports, media, academic literature, and other relevant materials, and a desk research of collected data was conducted to prepare materials for the upcoming content analysis. Table 2 provides details of the cases.

(3) Identifying Risk Factors through Content Analysis: as an observational research method to evaluate the symbolic content of all forms of materials, either qualitative or quantitative content analysis is frequently used to identify the major facets of a set of data [36]. Thus, content analysis was carried out to identify the risk factors appearing in each of selected cases by utilizing the preferred risk checklist established from the literature review.

(4) Verifying the Identified Risk Factors by Expert Interview: interviews with a preestablished team of experts were conducted to verify the appropriateness and comprehensiveness of the identified risk factors. The team consists of three experts with different WTE industry backgrounds--a Hangzhou government-related WTE industry official, a senior manager from a WTE incineration plant (Hangzhou Green Energy Environmental Protection Power Co., Ltd), and a researcher related to WTE implementation.

3. Results

The identified risk factors seriously affecting the performance of each case are summarised in Table 3.

Table 4 summarises the frequency of the risk factors identified in the case studies, divided into high-, medium-, and low-frequency risks. The high-frequency risks (appearing in at least 10 of the 35 cases) comprise public opposition risk, environmental pollution risk, government decision-making risk, defective legal and regulatory system, and MSW supply risk and may heavily affect the performance and development of the WTE incineration industry in China. Medium-frequency risks refer risk factors of the frequency from 4 to 10, while low-frequency risks mean risk factors rarely occurred (no more than 3 times).

4. Discussion

Similar to previous studies identifying risk factors in the WTE incineration industry, the results in Table 4 indicate that numerous risk factors affect the performance the PPP WTE incineration plants and the development of PPP WTE incineration industry in China. On the one hand, although the conclusions of previous studies are not entirely consistent, they provide sufficient evidence that the performance of PPP WTE incineration projects is heavily affected by critical risk factors such as environmental pollution, government decision-making, public opposition, and MSW supply [4, 23]. On the other hand, emerging factors such as safety and government behaviour risks are unexpectedly identified. (e reason may be attributed to the fact that low-frequency risks are easily overlooked, especially when those related to local community health and the environment occurred at the same time [37-39]. Moreover, different studies provide different rankings of the importance of the risks. Some argued that the vital factor affecting the development of PPP WTE incineration projects is not technical problems but deficiencies in government regulations and enforcement [40, 41]. Cheung and Chan [42], for example, concluded that government intervention and public credit are severe risks for PPP WTE incineration projects. In contrast with previous studies, however, our results indicate public opposition risk to be the highest, followed by traditional critical risk factors such as environmental pollution, government decision-making, the defective legal and regulatory system, and MSW supply risks. These are further analysed in the following.

4.1. Public Opposition Risk. The most important reason for public opposition is the emerging "not in my back yard" (NIMBY) syndrome [14], which sometimes manifests in violent behaviour [43]. WTE facilities can be seen as one kind of LULU (locally unwanted land use), of which the benefits are usually broadly distributed, while most of the costs tend to be localised [44, 45]. WTE facilities face considerable and strong opposition from the local communities in which they are situated because they have potential negative impacts (e.g., smell and dioxin release) on local residents' environments, health, or even property [14, 46]. Protests against incinerators, or anti-incinerator campaigns, have been documented in many countries/regions worldwide [47,48]. Recently, NIMBYism has become very popular in many potentially hazardous industries in China, especially the WTE industry that, as Table 3 clearly indicates, has led to many WTE projects being cancelled, suspended, or closed before the scheduled closure date. According to public information statistics, at least 10 NIMBY movements related to PPP WTE incineration projects occurred since 2013, for example, the Guangdong Huizhou WTE incineration plant, the Hangzhou Jiufeng WTE incineration plant, and the Nanjing Liuhe WTE incineration plant [49].

Disputes over site selection and decision-making of WTE incineration plants are regarded as the main reason for public opposition [14]. Inadequate disclosure of related information, as well as the inefficient governance and regulation from local governments, are other critical causes by which, once problems occur, it will not only result in a significant loss but also deepen public distrust of the government and PPP WTE incineration projects [49, 50]. Moreover, compensation should also be taken into account [51, 52] for the reason that everyone is highly unlikely to sacrifice their own interests (health and wealth) without adequate compensation [49], with economic compensation considered an effective solution to NIMBY protests [53]. Furthermore, insufficient risk communication between local governments, WTE enterprises, and local communities is also often a significant issue behind public opposition [48, 50].

4.2. Environmental Pollution Risk. Environmental pollution risk occurred in 20 of 35 cases. The collection, delivery, treatment, and incineration of MSW involve complex physical, chemical, and biological processes and can lead to a several forms of environmental pollution [54, 55]. Flue gas from waste incinerators, for instance, contains acid gases, heavy metals, dioxins, and other toxic and hazardous pollutants [23, 24] that cannot be completely eliminated [56]. Waste leachate is another significant source of pollution, and it lacks a mature and reliable treatment technology in China [24]. As happened in Cases 2 and 11, garbage spillage and leakage in MSW collection, delivery, and transportation can also lead to secondary environmental pollution [57]. Consequently, equipment, materials, and technologies for pollution prevention and control need to be used to minimise negative impacts on the environment, which significantly increased WTE operating costs [4, 24]. As one of the most common "negative impacts" of PPP WTE incineration projects, environmental pollution is often caused by the unethical behaviour of practitioners during the construction and operation stage [58], such as through the excessive discharge of contaminating materials and hazardous substance leaks [4], as illustrated in Cases 27 and 33. China's defective legal and regulatory system, which provided the loophole for private sector's illegal activities, may be the main contributing reason [58, 59].

4.3. Government Decision-Making Risk. Government decision-making risk is often manifested as inappropriate site selection in the field of WTE incineration, which heavily affects the implementation of WTE incineration technologies in the MSW disposal industry [60], as shown in Cases 8, 16, and 24. As one kind of LULU, site selection and government decision-making related to PPP WTE incineration projects involve not only technical issues but also a complex mix of economic, social, and environmental concerns such as perceived risk and public distrust [61, 62]. Thus, an open and consultative decision-making approach with public participation and transparency is seen as an effective way to ensure the reliability and fairness of the government's decision-making approach [48, 61, 62]. However, although cultivating a strong environmental state remains a key part of China's environmental management strategy, the emerging government decision-making risks indicate that the traditional top-down decision-making approach and the command and control regulation are insufficient to deal with the NIMBY syndrome in the WTE industry [47, 63-66]. In addition, it is worth noting that almost all highly protested WTE projects in China are eventually cancelled or indefinitely postponed by the local governments because the local governments will circumvent unrest through increasing opacity or by selecting sites in locations where public opposition is less likely to emerge [64, 65].

4.4. Defective Legal and Regulatory System. Delivering sustainable PPP WTE incineration projects requires a good supportive legal and regulatory environment [26]. However, the legal and regulatory framework for PPPs, especially for PPP WTE incineration projects in China, is still in its infancy [67, 68]. As a new waste disposal approach, incineration technologies have not been widely used in China's MSW disposal industry until recently, despite the first WTE incineration plant in China being built in Shenzhen in 1988. Thus, many relevant laws and regulations that relate to their establishment and improvement are far less than perfect. For example, the price system of power generation with WTE incineration was basically chaotic until 2012, when the National Development and Reform Committee published a regulation entitled The Notice on Improving the Price Policies of the Municipal Solid Waste Incineration for Power Generation (2012) in which the conversion coefficient from MSW to grid-connected power was temporarily determined to be 280 kWh/t and the price of grid-connected power is 0.65 CNY/kWh. This led to the excessive use of traditional energy sources such as coal and diesel fuel in many WTE incineration plants to obtain high benefits from electricity generation. Meanwhile, this risk may also rely on existed legislation and regulations being poorly carried out or even not enforced at all [4, 42], resulting in illegal acts such as excessive pollutant discharge and use of outdated technologies, as shown in Cases 7, 14, 16, and so on. In addition, transparency and open decision-making approaches are essential for establishing a good legal and regulatory framework, or WTE operators may violate the technical and safety standards for their own interests [69]. Finally, frequent changes in legislation are also a major cause of legal and regulatory risks, such as laws relating to land use, tax, labour, and environmental protection [70, 71].

4.5. MSW Supply Risk. In contrast with other risks such as public opposition and environmental risk, the MSW supply risk is a specialised WTE incineration project risk. The inadequate quantity and/or quality of MSW supply are two aspects of MSW supply risk [4]. An inadequate MSW supply will affect the efficiency of PPP WTE incineration projects, both economically and technically. On the one hand, the inadequate supply of MSW caused machines to be idle or to be used interchangeably, which can lead to financial loss and reduced revenues because both disposal fees and electricity fees depend on the amount of waste disposal [23]. On the other hand, a serious shortage of MSW supply may cause incomplete MSW incineration, which leads to incineration gas leakage. In terms of quality, MSW with high moisture content and low calorific value cannot be burned directly [59, 72]. If the MSW is of poor quality, the incineration of waste will require auxiliary fuels, such as coal and diesel, which will not only increase operating costs but also lead to equipment damage [23, 73].

Moreover, compared with similar studies by Song et al. [4] and Xu et al. [23] in China, the current study contributes to the identification of PPP WTE incineration project risk factors by a more comprehensive set of cases as shown in Table 5. The comparative analysis between the three studies shown in Table 5 reveals that the identified risk factors changed with improvements in China's political, economical, and social conditions. Consistent with the findings of Song et al. [4] and Xu et al. [23], a variety of economical, social, environmental, and legal risk factors significantly affecting PPP WTE incineration projects in China have also been identified in the current study (including environmental pollution risk, defective legal and policy making, opaque government decision-making, and insufficient and nonlicensed MSW supply) in spite of the rapid growth in WTE incineration implementation during the past decade.

Meanwhile, the rankings of the significance of these identified risk factors are different. In particular, due to rising public environmental awareness and an increasing emphasis on public health along with improvements in the economic conditions and living standards in China [14, 50], public opposition is increasingly becoming a key risk factor affecting the development of the PPP WTE incineration industry. At the same time, the ranking of MSW supply risk has relatively decreased since 2013. This is because the rapid urbanisation in China had resulted in a sharp increase in MSW generation and the central and local governments had issued a series of orientations and regulations to stress the significance of classification in the disposal of harmless and recycled MSW [74-76], by which the quality of MSW is significantly improved [10].

Moreover, some critical risk factors identified in the studies of Song et al. [4] and Xu et al. [23], such as technical risk, payment risk, and government credit risk, have gradually faded out in recent years. The possible reason is that some interim issues, such as government budget deficit and immature incineration technologies, have been gradually resolved with the continuous development of China's social and economic conditions. For example, the percentage of grate furnaces (advanced incineration technologies [10, 77] and widely used in Europe, USA, and Japan) adopted in incinerators in China is about 64%, a figure predicted to increase constantly because of the localisation of the technology and policy support [10].

5. Conclusion

In light of the pivotal role that risk identification, analysis, and response play in the successful development of PPP WTE incineration projects, we conducted a multiple case study to identify the risk factors in China by drawing on the experience and lessons learn from the real-life risk events of 35 PPP WTE incineration plants through content analysis and expert interviews. The results provide a solid foundation for the further risk analysis, allocation, and response of PPP WTE incineration projects. Both researchers and practitioners of the PPP WTE incineration industry in China, including policy makers, WTE professionals, and academic researchers, may benefit from this study by referring to the identified risk factors in policy making, operating performance improvement, critical risk response, and so on. Thus, the present study is expected to shed light on their improvement in performance as well as the development and implementation of WTE incineration technologies in China's MSW disposal industry.

Based on a comprehensive analysis of the 35 selected cases, 18 risk factors affecting PPP WTE incineration projects in China are identified. The findings reveal that the performance of China PPP WTE projects is most affected by public opposition, environmental pollution, government decision-making, the defective legal and regulatory system, and MSW supply risks.

Although the current study contributes to the literature on the management of the PPP WTE industry and PPP infrastructure projects by identifying the risk factors affecting PPP WTE incineration projects in China, it also has some limitations that need to be addressed by further research. First, due to the limitation of case selection, there are undoubtedly other risk factors involved that are expected to be examined by further studies. Second, although multiple case studies were used in the current research, the identification of risk factors for each case was still based on the subjective judgment of experts, and future validation studies are needed using such quantitative or empirical research methods as case-based reasoning technologies and statistical analysis.

Data Availability

The data used to support the findings of this study are available from the corresponding author upon request.

https://doi.org/10.1155/2018/4983523

Conflicts of Interest

The authors declare that there are no conflicts of interest regarding the publication of this paper.

Acknowledgments

This work was supported by the National Natural Science Foundation of China (NSFC) (Grant no. 71672180) and in part by Grant nos. 71471166 and 71501142, the Soft Science Research Program of Zhejiang Province (2016C35007), and the Zhejiang Provincial Key Research Institute of Philosophy and Social Sciences for Ecological Civilization (Grant no. 17STYB05).

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Yong Liu [ID], (1) Chenjunyan Sun [ID], (1) Bo Xia [ID], (2) Sai Liu [ID], (3) and Martin Skitmore (2,4)

(1) School of Civil Engineering and Architecture, Zhejiang Sci-Tech University, Hangzhou 310018, China

(2) School of Civil Engineering and Built Environment, Queensland University of Technology (QUT), Brisbane, QLD 4001, Australia

(3) School of Art, Architecture and Civil Engineering, Hunan Institute of Technology, Hengyang 421002, China

(4) Research Institute of Complex Engineering and Management, Tongji University, Shanghai 200092, China

Correspondence should be addressed to Yong Liu; jhly1007@zstu.edu.cn

Received 18 April 2018; Accepted 2 July 2018; Published 1 August 2018

Academic Editor: Dujuan Yang

Caption: Figure 1: Overall research framework.
Table 1: Risk checklist of PPP projects.

Risk level           Risk                    Risk factors
                   categories

Macrolevel        1. Political         1. Government decision-
risks                risks                   making risk

                                      2. Government credit risk

                                       3. Government behaviour
                                                 risk

                                        4. Unstable government

                                         5. Expropriation or
                                      nationalisation of assets

                                         6. Strong political
                                         opposition/hostility

                                            7. Policy risk

                 2. Legal risks         8. Defective legal and
                                          regulatory system

                                       9. Industrial regulatory
                                                change

                                          10. Interest rate
                                              volatility

                                          11. Inflation risk

                       3.             12. Foreign exchange risk
                 Macroeconomic
                     risks             13. Influential economic
                                                events

                                      14. Poor financial market

                4. Social risks       15. Public opposition risk

                                        16. Market demand risk

                                        17. Force majeure risk

                5. Natural risks        18. Weather/geological
                                              condition

                                        19. Environmental risk

Mesolevel          6. Project         20. Land acquisition risk
risks           selection risks
                                         21. Delay in project
                                        approvals and permits

                                        22. High finance costs

                   7. Project           23. Project financial
                 finance risks              attractiveness

                                     24. Availability of finance

                                      25. Inadequate competition
                                              for tender

                8. Design risks           26. Design change

                                        27. Design deficiency

                                        28. Construction cost
                                               overrun

                                        29. Construction delay

                9. Construction        30. Materials/equipment
                     risks                 procurement risk

                                           31. Poor-quality
                                             workmanship

                                       32. Contract change risk

                                        33. Subcontractors or
                                            suppliers risk

                 10. Technical            34. Technological
                     risks                   backwardness

                                       35. Unproven technology

                                      36. Revenue and cost risk

                                         37. Low productivity

                                      38. Insufficient operation
                                               capacity

                                     39. Unreasonable concession
                                                period

                                           40. Payment risk

                11. Operational        41. Residual value risk
                     risks
                                        42. Lack of supporting
                                            infrastructure

                                       43. Frequent maintenance

                                          44. Equipment risk

                                           45. Safety risk

                                     46. Environmental pollution
                                                 risk

Microlevel            12.                47. Organisation and
risks             Relationship            coordination risk
                     risks
                                      48. Inadequate experience
                                                in PPP

                                     49. Inadequate distribution
                                               of risks

                                     50. Inadequate distribution
                                             of authority

                                      51. Differences in working
                                                method

                                        52. Lack of commitment

                   13. Third           53. Third party tort and
                  party risks             compensation risk

                                           54. Staff crises

Table 2: Descriptive statistics of the cases.

Profile                       Category                 Frequency

Location                   Eastern China                21 (60%)
                           Central China               8 (22.86%)
                           Western China               6 (17.14%)

Operation                   Before 2006               10 (28.57%)
time                         2007-2012                12 (34.29%)
                             2013-2017                 6 (17.14%)
                      Not placed in operation           7 (20%)

Total                           1-5                   25 (71.43%)
investment                      5-10                   6 (17.14%)
(CNY 100           [greater than or equal to] 10       4 (11.43%)
million)

Design                        500-1000                18 (51.43%)
capability                   1000-2000                15 (42.86%)
(tonnes/                     2000-3000                 2 (5.71%)
day)

Incineration               Grate furnace              20 (57.14%)
technology                 Fluidised bed              13 (37.14%)
                         Pyrolysis furnace             2 (5.71%)

Current                      Cancelled                 5 (14.29%)
status             In redecision-making processes      1 (2.86%)
                         Under construction            1 (2.86%)
                        Placed in operation           26 (74.29%)
                      Closed before scheduled          2 (5.71%)
                            closure date

Table 3: PPP WTE incineration cases and risk factors.

Number           Project           Operation         Risk events
                                      time

1           Ningbo Fenglin WTE        2001         The supplied MSW
           incineration project                  could not be burned
                                                  immediately due to
                                                  containing a high
                                                   level of water.
                                                   Insufficient MSW
                                                 treatment facilities
                                                 led to environmental
                                                    pollution. The
                                                 residents suggested
                                                  the government to
                                                  close the project,
                                                 which the government
                                                  promised to do at
                                                   the beginning of
                                                  2014. Finally, the
                                                  project was closed
                                                    in June 2014,
                                                  although there was
                                                   still a 14-year
                                                  concession period
                                                      remaining

2           Zhengzhou Xingjin         2000       Due to insufficient
             WTE incineration                      MSW supply, the
                 project                         incinerators had to
                                                 be used alternately.
                                                   The operator was
                                                  suspected of using
                                                 coal instead of MSW
                                                     to increase
                                                 production. The PPP
                                                   company suffered
                                                 heavy losses between
                                                  2004 and 2005. The
                                                 transportation cost
                                                   of MSW was then
                                                 increased because a
                                                 new toll station was
                                                  set up between the
                                                  CBD and the plant.
                                                    In 2013, local
                                                 residents complained
                                                       that the
                                                     neighbouring
                                                   environment was
                                                 polluted by MSW and
                                                      wastewater

3             Anhui Wuhu WTE          2003           The on-grid
           incineration project                  electricity price of
                                                  waste incineration
                                                 was so low that the
                                                 plant suffered heavy
                                                 losses from 2003 to
                                                 2005. The supply of
                                                 MSW was insufficient
                                                  from 2003 to 2004

4           Chongqing Tongxing        2005        Both the quantity
             WTE incineration                     and the quality of
                 project                         MSW supplied did not
                                                  reach the expected
                                                 standard. There was
                                                 no municipal sewage
                                                 pipe network on both
                                                  sides of the main
                                                  road, which caused
                                                       serious
                                                    environmental
                                                   pollutions. The
                                                 owners had signed a
                                                 new contract beyond
                                                    the concession
                                                  contract for their
                                                   own interests. A
                                                   safety accident
                                                 occurred because of
                                                  the poor design of
                                                  the transportation
                                                  vehicles. The MSW
                                                 disposal fee was not
                                                    paid on time,
                                                    increasing the
                                                  financial pressure
                                                  of the PPP operator
                                                       in 2006

5           Kunming Wuhua WTE         2008          Due to unclear
           incineration project                    regulations and
                                                      unsuitable
                                                  technologies, the
                                                  private investors
                                                    from the U.S.
                                                 decided to withdraw
                                                 their investment in
                                                 2006. The supply of
                                                  MSW was inadequate
                                                   so that machines
                                                 were standing idle.
                                                   The MSW disposal
                                                  charge was delayed
                                                  from 2008 to 2013

6            Zhongshan Center         2006        Both the quantity
                zutuan WTE                        and the quality of
           incineration project                  the MSW supplied did
                                                    not reach the
                                                  expected standard
                                                  and some equipment
                                                   was damaged. In
                                                      2006, the
                                                  incinerators were
                                                      shut down
                                                 temporarily to clean
                                                    up the remains
                                                 caused by unsuitable
                                                  MSW, which led to
                                                   heavy losses. In
                                                     2014, due to
                                                       existing
                                                    environmental
                                                 pollution, the plant
                                                     faced strong
                                                 opposition from the
                                                   local community

7          Xuchang Tianjian WTE       2004         A financial loss
           incineration project                  emerged in 2008 due
                                                    to rising coal
                                                  prices and the low
                                                 price of electricity
                                                  generated from the
                                                  WTE incinerators.
                                                  The quality of the
                                                 MSW supplied did not
                                                  reach the expected
                                                  standard, and some
                                                    equipment was
                                                  damaged. In 2015,
                                                 2016, and 2017, the
                                                 project was fined by
                                                  local governments
                                                      for heavy
                                                    environmental
                                                   pollution. With
                                                 rapid urbanisation,
                                                  increasing numbers
                                                  of urban residents
                                                  were living around
                                                    the originally
                                                     desolate WTE
                                                 incineration plant.
                                                   Due to outdated
                                                 technologies, it was
                                                  difficult for the
                                                    plant to meet
                                                   China's current
                                                 emission standards.
                                                    The plant was
                                                       finally
                                                   reconstructed on
                                                 another site in 2017

8          Beijing Liulitun WTE        --          The construction
           incineration project                   site chosen by the
                                                 local government was
                                                 located windward of
                                                 the CBD and close to
                                                   the water-source
                                                  protection area of
                                                     Beijing. The
                                                    government was
                                                  trying to conceal
                                                     risk issues,
                                                 seriously affecting
                                                 public credibility.
                                                 The local residents
                                                 opposed the project
                                                   due to potential
                                                  environmental and
                                                 health impacts. The
                                                 project was finally
                                                  suspended in 2007

9          Jiangsu Wujiang WTE        2009           The EIA was
           incineration project                  insufficient and was
                                                  considered fake by
                                                 the local residents.
                                                 The construction of
                                                 the project did not
                                                 stop despite public
                                                  opposition. Local
                                                  residents gathered
                                                 to protest, and the
                                                 project was finally
                                                  cancelled in 2009

10         Shenzhen Pinghu WTE        2005       The actual height of
           incineration project                  the chimney did not
                                                      match the
                                                 requirements of the
                                                   original design
                                                 documents, resulting
                                                   in poisonous gas
                                                    diffusion. The
                                                 actual situation was
                                                 not consistent with
                                                     the promised
                                                 technical standards,
                                                  and the equipment
                                                  for environmental
                                                  protection did not
                                                  work for nearly 3
                                                 years. In 2009, the
                                                   local residents
                                                 opposed the project
                                                    due to serious
                                                    environmental
                                                  pollution involved

11         Guangzhou Likeng WTE       2005           In 2010, an
           incineration project                   explosion occurred
                                                  in the incinerator
                                                 causing five people
                                                  to be injured. The
                                                 plant was then asked
                                                     to stop for
                                                  rectification and
                                                     reformation.
                                                    Environmental
                                                 pollution caused by
                                                    garbage truck
                                                  leakage frequently
                                                  occurred. In 2012,
                                                 the plant was fined
                                                    because of the
                                                      incomplete
                                                 incineration of MSW

12           Wuxi Xidong WTE          2011         The government's
           incineration project                   publicity for the
                                                     project was
                                                   insufficient. In
                                                 2011, the residents
                                                  opposed the plant
                                                  due to black smoke
                                                 and a pungent odour.
                                                  The 90% completed
                                                   project finally
                                                 failed and suffered
                                                     great losses

13          Guangxi Laibin WTE        2008        The MSW supply was
           incineration project                       seriously
                                                   insufficient in
                                                  2008. During 2008-
                                                   2010, production
                                                   costs increased
                                                 significantly due to
                                                  rising coal prices
                                                   and a defective
                                                  subsidy mechanism.
                                                  In 2011, the plant
                                                  was closed because
                                                    of maintenance
                                                       problems

14          Guangdong Huizhou         2007          Some outdated
             WTE incineration                      technologies and
                 project                             second-hand
                                                 equipment were found
                                                  to be used in this
                                                    plant in 2013,
                                                     resulting in
                                                    environmental
                                                    pollution. The
                                                   project was then
                                                   opposed by local
                                                    residents and
                                                  stopped operation.
                                                   Some corruption
                                                   occurred in the
                                                   bidding process.
                                                 Relevant monitoring
                                                  data of the plant
                                                  were not disclosed
                                                  in time. The local
                                                  government finally
                                                    terminated the
                                                 contract and started
                                                  a new one in 2013

15          Shanghai Jiangqiao        2003         The EPA did not
             WTE incineration                     positively answer
                 project                         the questions raised
                                                      by hearing
                                                 representatives. The
                                                 residents protested
                                                  over the project's
                                                  expansion in 2009.
                                                   In 2013, a major
                                                  explosion happened
                                                 because of the lack
                                                  of on-site safety
                                                   management and a
                                                 third party breaking
                                                   operation rules

16         Hanyang Guodingshan        2012          The plant was
             WTE incineration                      constructed in a
                 project                          densely populated
                                                  area and separated
                                                   from an existing
                                                    medical waste
                                                  incineration plant
                                                    by a wall. The
                                                 residents protested
                                                  due the project's
                                                     potentially
                                                 hazardous impact. In
                                                  2013, the project
                                                  was asked to stop
                                                   for a variety of
                                                  reasons, that is,
                                                 starting to operate
                                                       without
                                                    authorisation,
                                                      inadequate
                                                    environmental
                                                      protection
                                                 facilities, and the
                                                     uncompleted
                                                 resettlement of the
                                                     surrounding
                                                 residents. However,
                                                    forced by the
                                                 pressure of garbage
                                                  siege, the project
                                                  was reoperated in
                                                         2014

17          Wenzhou Leqing WTE        2013       The decision-making
           incineration project                     procedure was
                                                  questioned by the
                                                   local residents
                                                 because most of them
                                                  were not informed
                                                   during both the
                                                 environmental impact
                                                  assessment process
                                                 and the planning and
                                                     construction
                                                 approval process. To
                                                     prevent the
                                                   expansion of the
                                                   project, several
                                                    protests were
                                                    spontaneously
                                                   organised by the
                                                  local residents in
                                                         2013

18         Kunming Donggang WTE       2012       Half of the machines
           incineration project                  became idle because
                                                  of the shortage of
                                                   MSW supply. The
                                                 distance between two
                                                   WTE incineration
                                                    plants was too
                                                 close, resulting in
                                                    a competitive
                                                 relationship for MSW
                                                  resources. Payment
                                                 of the MSW disposal
                                                  fees was defaulted
                                                  from 2012 to 2013

19         Hangzhou Jiufeng WTE        --           The technical-
           incineration project                   based, traditional
                                                  top-down decision-
                                                 making approach has
                                                    led to strong
                                                 opposition from the
                                                   local community.
                                                     However, the
                                                 response from local
                                                   governments was
                                                    inadequate and
                                                   insufficient in
                                                    dispelling the
                                                 residents' concerns.
                                                   On May 10, 2014,
                                                   more than 5,000
                                                   local residents
                                                  protested against
                                                   the plant, which
                                                  eventually turned
                                                     into a mass
                                                  incident. Finally,
                                                    the plant was
                                                   suspended by the
                                                 local government to
                                                     restart the
                                                   decision-making
                                                       process

20          Wuhan north Hankou        2010         Due to Hankou's
             WTE incineration                    rapid urbanisation,
                 project                            the plant was
                                                  getting closer to
                                                    the populated
                                                   residential and
                                                  commercial areas.
                                                   The incinerators
                                                  were not equipped
                                                  appropriately. In
                                                   2014, the local
                                                 residents protested
                                                  against the plant
                                                    because it has
                                                    caused serious
                                                    environmental
                                                  pollution. In the
                                                    same year, the
                                                 project was fined by
                                                 the local government
                                                  because of illegal
                                                  disposal of carbon
                                                   monoxide and fly
                                                  ash. Finally, the
                                                 plant was closed and
                                                  will be rebuilt on
                                                     another site

21          Anhui Huainan WTE         2014        Both the quantity
           incineration project                   and quality of MSW
                                                   supplied did not
                                                  reach the expected
                                                  standard, and one
                                                 incinerator was idle
                                                 due to a shortage of
                                                   MSW supplies in
                                                 2014. Some required
                                                  equipment such as
                                                    waste-transfer
                                                  stations, garbage
                                                 trucks, and garbage
                                                     compression
                                                  equipment was ill
                                                     equipped. (e
                                                 transportation cost
                                                 of MSW was too high
                                                   to be profitable
                                                 because of the long
                                                 distance between the
                                                  CBD and the plant

22            Hubei Xianning          2012        The government did
               Fengquan WTE                        not pay the MSW
           incineration project                    disposal fees on
                                                    schedule. The
                                                   operator lacked
                                                    experience in
                                                    investing and
                                                  operating PPP WTE
                                                     incineration
                                                  projects. In 2014,
                                                   the project was
                                                    ordered to be
                                                    suspended for
                                                    rectification
                                                 because of toxic gas
                                                 leakage, substandard
                                                   sulphur dioxide
                                                  emissions, and so
                                                         on.

23           Jilin Siping WTE         2011            Due to the
           incineration project                    insufficient MSW
                                                     supplies, a
                                                  financial loss has
                                                 emerged since 2012.
                                                    In 2015, local
                                                  residents opposed
                                                 the plant because of
                                                  the dust, odours,
                                                   and noise during
                                                 production. Finally,
                                                 the plant was forced
                                                      to suspend
                                                      production

24          Tianjin Jixian WTE        2016       There were residents
           incineration project                  and farmland within
                                                 300 m of the plant.
                                                  In 2016, thousands
                                                  of local residents
                                                   jointly signed a
                                                 petition protesting
                                                  against the plant
                                                   for its negative
                                                    impact on the
                                                   environment and
                                                 health of the local
                                                    community. In
                                                    addition, the
                                                 operator ofthe plant
                                                  was found to have
                                                    falsified its
                                                 environmental impact
                                                    assessment and
                                                     health risk
                                                 assessment. Finally,
                                                   the project was
                                                 required to stop in
                                                         2016

25         Lanzhou Fengquan WTE       2016       The local residents
           incineration project                     were seriously
                                                   affected by the
                                                   leakage of odour
                                                    caused by poor
                                                   equipment. Some
                                                  required equipment
                                                   such as cleaning
                                                   vehicles was ill
                                                  equipped. In 2016,
                                                 some illegal sewage
                                                 pipes were found to
                                                  have been built by
                                                 the operator of the
                                                 plant, which led to
                                                       serious
                                                    environmental
                                                      pollution

26          Chongqing Wanzhou         2014         Due to a serious
             WTE incineration                    shortage of garbage
                 project                          from 2014 to 2016,
                                                   insufficient air
                                                  could be extracted
                                                  from the upper end
                                                 of the trash pit to
                                                  form the negative
                                                   pressure needed,
                                                    which led to a
                                                    serious odour
                                                  leakage. A line or
                                                  two lines were run
                                                     alternately,
                                                     accelerating
                                                 equipment aging. The
                                                    operator lacks
                                                    experience in
                                                    investing and
                                                  operating PPP WTE
                                                     incineration
                                                       projects

27          Haerbing Shuangqi         2014       The plant was fined
             WTE incineration                        by the local
                 project                          government in 2016
                                                  for its excessive
                                                     emission of
                                                 pollutants, improper
                                                     disposal of
                                                 solidified fly ash,
                                                   and nonstandard
                                                     operational
                                                      management

28          Hubei Xiantao WTE          --           The technical-
           incineration project                   based, traditional
                                                  top-down decision-
                                                 making approach has
                                                    led to strong
                                                   opposition from
                                                  local communities.
                                                 In 2016, the project
                                                 was cancelled by the
                                                   local government

29          Nanjing Liuhe WTE          --             As case 28
           incineration project

30         Zhejiang Haiyan WTE         --             As case 28
           incineration project

31          Guangdong zhaoqing         --             As case 28
             WTE incineration
                 project

32         Hangzhou Qiaosi WTE        2002        Due to Hangzhou's
           incineration project                  rapid urbanisation,
                                                    the plant was
                                                  getting closer to
                                                    the populated
                                                   residential and
                                                  commercial areas.
                                                    The plant was
                                                 strongly opposed by
                                                 the local community
                                                   for its negative
                                                    impact on the
                                                     surrounding
                                                   environment and
                                                  health. The plant
                                                    was officially
                                                  closed in December
                                                         2016

33          Feicheng Fengquan         2011         Due to obsolete
             WTE incineration                         equipment,
                 project                            constraints on
                                                  maintenance funds,
                                                  and other reasons,
                                                    the pollution
                                                  control facilities
                                                 were running poorly
                                                    and successive
                                                 excessive pollution
                                                  problems occurred.
                                                    The residents
                                                      constantly
                                                 complained. In July
                                                   2016, the plant
                                                     operator was
                                                  interviewed by the
                                                 local environmental
                                                      protection
                                                    department and
                                                 required to rectify
                                                    and reform the
                                                      situation

34          Shaoxing zhonghuan        2008         The project was
             WTE incineration                      heavily fined in
                 project                           2016 because the
                                                  company falsified
                                                    and illegally
                                                  deleted automatic
                                                  monitoring data of
                                                  discharged exhaust
                                                    gases and then
                                                  deleted historical
                                                  data to circumvent
                                                   inspection. The
                                                 residents complained
                                                 about the pollution
                                                 involved but did not
                                                     receive any
                                                      responses

35          Hainan Wanning WTE         --           The technical-
           incineration project                   based, traditional
                                                  top-down decision-
                                                 making approach led
                                                 to strong opposition
                                                    from the local
                                                  community. A mass
                                                     incident has
                                                    occurred on 12
                                                     January 2017

Number        Identified risk
                  factors

1           (i) MSW supply risk

            (ii) Environmental
              pollution risk

               (iii) Lack of
                supporting
              infrastructure

              (iv) Government
                credit risk

2           (i) MSW supply risk

           (ii) Defective legal
              and regulatory
                  system

             (iii) Revenue and
                 cost risk

              (iv) Government
           decision-making risk

                (v) Public
              opposition risk

            (vi) Environmental
              pollution risk

3             (i) Policy risk

             (ii) Revenue and
                 cost risk

             (iii) MSW supply
                   risk

4           (i) MSW supply risk

               (ii) Lack of
                supporting
              infrastructure

            (iii) Environmental
              pollution risk

           (iv) Defective legal
              and regulatory
                  system

              (v) Safety risk

                (vi) Design
                deficiency

             (v) Payment risk

5              (i) Unproven
                technology

             (ii) Policy risk

              (iii) Contract
                change risk

           (iv) MSW supply risk

             (v) Payment risk

6           (i) MSW supply risk

            (ii) Equipment risk

            (iii) Environmental
              pollution risk

                (iv) Public
              opposition risk

7          (i) Revenue and cost
                   risk

             (ii) Policy risk

           (iii) MSW supply risk

            (iv) Equipment risk

             (v) Technological
               backwardness

            (vi) Environmental
              pollution risk

              (vii) Defective
           legal and regulatory
                  system

             (viii) Government
           decision-making risk

8             (i) Government
           decision-making risk

                (ii) Public
              opposition risk

             (iii) Government
                credit risk

            (iv) Environmental
              pollution risk

9             (i) Government
           decision-making risk

                (ii) Public
              opposition risk

10         (i) Design deficiency

                (ii) Public
              opposition risk

            (iii) Environmental
              pollution risk

            (iv) Technological
               backwardness

            (v) Equipment risk

11
              (i) Safety risk

            (ii) Environmental
              pollution risk

              (iii) Defective
           legal and regulatory
                  system

12              (i) Public
              opposition risk

              (ii) Government
           decision-making risk

            (iii) Environmental
              pollution risk

13          (i) MSW supply risk

             (ii) Policy risk

             (iii) Revenue and
                 cost risk

14           (i) Technological
               backwardness

            (ii) Equipment risk

              (iii) Defective
           legal and regulatory
                  system

              (iv) Government
              behaviour risk

                (v) Public
              opposition risk

            (vi) Environmental
              pollution risk

              (vii) Contract
                change risk

            (viii) Revenue and
                 cost risk

15              (i) Public
              opposition risk

              (ii) Government
           decision-making risk

             (iii) Safety risk

           (iv) Defective legal
              and regulatory
                  system

16            (i) Government
           decision-making risk

            (ii) Environmental
              pollution risk

               (iii) Public
              opposition risk

           (iv) Defective legal
              and regulatory
                  system

17            (i) Government
           decision-making risk

                (ii) Public
              opposition risk

18          (i) MSW supply risk

            (ii) Equipment risk

             (iii) Government
           decision-making risk

             (iv) Payment risk

19              (i) Public
              opposition risk

              (ii) Government
           decision-making risk

20            (i) Government
           decision-making risk

            (ii) Technological
               backwardness

               (iii) Public
              opposition risk

            (iv) Environmental
              pollution risk

            (v) Defective legal
              and regulatory
                  system

21          (i) MSW supply risk

               (ii) Lack of
                supporting

             (iii) Revenue and
                 cost risk

22           (i) Payment risk

             (ii) Insufficient
            operation capacity

            (iii) Environmental
              pollution risk

           (iv) Defective legal
              and regulatory
                  system

23          (i) MSW supply risk

                (ii) Public
              opposition risk

            (iii) Environmental
              pollution risk

             (iv) Revenue and
                 cost risk

24            (i) Government
           decision-making risk

                (ii) Public
              opposition risk

              (iii) Defective
           legal and regulatory
                  system

            (iv) Environmental
              pollution risk

25           (i) Environmental
              pollution risk

            (ii) Equipment risk

               (iii) Lack of
                supporting
              infrastructure

           (iv) Defective legal
              and regulatory
                  system

26          (i) MSW supply risk

            (ii) Equipment risk

            (iii) Environmental
              pollution risk

           (iv) Defective legal
              and regulatory
                  system

27          (i) Defective legal
              and regulatory
                  system

            (ii) Environmental
              pollution risk

28              (i) Public
              opposition risk

              (ii) Government
           decision-making risk

29              (i) Public
              opposition risk

              (ii) Government
           decision-making risk

30              (i) Public
              opposition risk

              (ii) Government
           decision-making risk

31              (i) Public
              opposition risk

              (ii) Government
           decision-making risk

32            (i) Government
           decision-making risk

                (ii) Public
              opposition risk

33          (i) Equipment risk

           (ii) Defective legal
              and regulatory
                  system

            (iii) Environmental
              pollution risk

                (iv) Public
              opposition risk

34          (i) Defective legal
              and regulatory
                  system

                (ii) Public
              opposition risk

            (iii) Environmental
              pollution risk

35            (i) Government
           decision-making risk

                (ii) Public
              opposition risk

Table 4: Risk factors frequency statistics.

Category                       Risk factors               Frequency

High-frequency            Public opposition risk              22
risks                  Environmental pollution risk           20
                      Government decision-making risk         18
                           Defective legal and                15
                             regulatory system
                              MSW supply risk                 12

Medium-                       Equipment risk                  8
frequency risks            Revenue and cost risk              7
                            Lack of supporting                4
                              infrastructure
                                Policy risk                   4
                               Payment risk                   4
                        Technological backwardness            4

Low-frequency                   Safety risk                   3
risks                     Government credit risk              2
                             Design deficiency                2
                           Contract change risk               2
                            Unproven technology               1
                      Insufficient operation capacity         1
                         Government behaviour risk            1

Table 5: Comparative analysis of similar studies.

Profile                   Song et al. [4]           Xu et al. [23]

Research methods        Expert interview and      Literature review
                         site investigation       and multiple cases
                                                    studied using
                                                   content analysis

Number of cases                  6                        14
studied

Time range of               Before 2008               2002-2012
events

Criteria for case           All cases in             All cases in
selection                    operation                operation

Risk factors            10 key risk factors        5 critical risk
identified                                             factors

                        Government decision-      Insufficient waste
                            making risk                 supply

                         Government credit        Environmental risk
                                risk

                          Legal and policy       Entry of nonlicensed
                                risk                    waste

Critical risk              Technical risk         Lack of supporting
factors (high-                                      infrastructure
frequency risk
factors) discussed      Contract change risk         Payment risk

                          Environment risk

                         Public opposition
                                risk

                          MSW supply risk

Profile                   Song et al. [4]         The present study

Research methods        Expert interview and      Literature review
                         site investigation       and multiple cases
                                                    studied using
                                                   content analysis

Number of cases                  6                        35
studied

Time range of               Before 2008          2001-2016, with 80%
events                                                after 2012

Criteria for case           All cases in          About 2/3 of cases
selection                    operation               in operation

Risk factors            10 key risk factors      18 risk factors with
identified                                         5 high-frequency
                                                     risk factors

                        Government decision-      Public opposition
                            making risk                  risk

                         Government credit          Environmental
                                risk                pollution risk

                          Legal and policy       Government decision-
                                risk                 making risk

Critical risk              Technical risk        Defective legal and
factors (high-                                    regulatory system
frequency risk
factors) discussed      Contract change risk       MSW supply risk

                          Environment risk

                         Public opposition
                                risk

                          MSW supply risk
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Title Annotation:Research Article
Author:Liu, Yong; Sun, Chenjunyan; Xia, Bo; Liu, Sai; Skitmore, Martin
Publication:Advances in Civil Engineering
Date:Jan 1, 2018
Words:9704
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