Assessing determinants of PPP project performance

Abstract

PurposeThe purpose of this paper is to understand the factors that affect the performance of projects being implemented on the public-private partnership (PPP) framework, with specific reference to urban drinking water sector in India.Design/methodology/approachA listing of factors that have a bearing on project performance have been developed based on a review of the literature. Through a survey, seven factors that are relevant to the Indian context were determined. Interviews were then conducted across a cross-section of government agencies, financial institutions, development agencies, private sector entities and consultants to understand the relative importance of these attributes. The analytical hierarchy process was used to develop relative weights of these factors.FindingsRanking and relative weights of the factors in descending order are stakeholder consent and support for water PPP projects (22.1 percent), appropriate project structure (17.4 percent), availability of realistic baseline information (16.2 percent), reasonable water tariffs (13.9 percent), public sector capacity (13.0 percent), well-developed market (9.5 percent) and water sector regulator (7.9 percent). Differences in perceptions amongst various stakeholder groups were also found.Research limitations/implicationsWater sector has not matured, and with the advent of newer formats of implementation models, there could be significant changes in the sector. As the number of projects available for study is limited, this exercise can be undertaken periodically and updated in relation to experiences in other infrastructure sectors.Practical implicationsThis analysis provides inputs to policymakers and project proponents for structuring more sustainable urban drinking water PPP projects.Originality/valueIndian infrastructure PPP market is attracting increased attention from researchers, though not much emphasis is being given to urban drinking water sector. This paper aims to contribute toward filling this research gap.