This study develops a dynamic risk modeling approach incorporating stock-and-flow structures to comprehensively evaluate the investment risks of highway PPP projects in Western China, aiming to promote sustainable infrastructure development. Through establishing a risk accumulation model with scenario simulation and sensitivity analysis, this study systematically examines the risk factors and their propagation pathways in Western China’s highway PPP projects. The research demonstrates the dynamic complexity of project risks, particularly highlighting the prominence of operation, maintenance, and government risks. Sensitivity analysis identifies five critical risk factors: financial support adequacy, public health contingencies, legal/regulatory robustness, inflation volatility, and project uniqueness. The study proposes targeted risk management strategies emphasizing the establishment of early-warning systems and emergency response plans for critical risks. Methodologically, this research advances infrastructure risk assessment by adapting stock-and-flow modeling conventions for threshold-driven risk screening, particularly suited to underdeveloped regions like Western China. The developed rapid risk determination tool provides practical decision support for stakeholders in similar socio-economic contexts.