RISK MANAGEMENT OF THE MEGAPROJECTS IN PUBLIC-PRIVATE ENTREPRENEURSHIP: PRINCIPLES OF FLYVBJERG'S «MEGAPROJECT LAW»

Abstract

The article is devoted to the justification of an integrated methodological framework for risk management in public-private partnerships (PPPs) based on the principles of Bent Flyvbjerg's law of megaprojects. In the context of the need for large-scale post-war reconstruction of Ukraine's infrastructure, attracting private investment through megaprojects becomes an unalternative strategic task. This research emphasizes that such projects are distinct not only by their scale but by their inherent vulnerability to systemic risks that traditional management models often fail to capture. The reasons for the failures of megaprojects are analyzed through the prism of technical, psychological (optimistic biases) and political and economic factors (strategic data distortions). The study highlights that these failures are rarely accidental; they are often the result of intentional misrepresentation of project viability to secure funding. Special attention is paid to the methodology of forecasting by Reference Class Forecasting (RCF), which allows moving from the subjective «internal view» of planners to the analysis of the actual results of similar projects in the past. By utilizing empirical data from a broad distribution of historical cases, RCF acts as a vital de-biasing tool that provides more realistic budget and timeline estimates. The feasibility of using a long preparation stage combined with modularity to minimize vulnerability in conditions of uncertainty is substantiated. The application of the «Think Slow, Act Fast» philosophy is presented as a strategic imperative to avoid the financial «windows of vulnerability» during the active construction phase. The article reviews the updated legislation of Ukraine (Law on PPP of 2025) and suggests ways to improve the domestic risk assessment methodology by integrating RCF into feasibility studies. This will ensure transparent risk allocation and increase Value for Money in the implementation of critical energy and transport facilities. Proposed improvements aim to foster a more resilient investment environment, capable of handling «fat-tail» risks and ensuring the long-term sustainability of Ukraine's infrastructure.