Abstract
Public Private Partnership (PPP) are agreements where public bodies enter into long term contractual with private entities for construction or management the public sector facilities, or provision services to the community. Internal rate of return (IRR), pay back regime or tariff, and the concession period (CP) are essential items to success (PPP) projects. This research presents a systematic approach for a win-win partnership contract determined on a quantitative basis, by informing the partnership parties how long contract period should be made. Essence of the proposed methodology is that project completion time should allow a competent contractor to complete the project on schedule and operation period should be long enough to enable the concessionaire to achieve a reasonable return, but not too long such that concessionaire’s return is excessive and public sector’s interests are sacrificed. A case study of a PPP project in Mayoralty of Baghdad was conducted to evaluate performance of the developed mathematical models. The determined concession period (CP) has found to be approximately equal to actual concession period (CP) granted to the private sector. Evaluation shows the possibility to adopt the proposed approach to determine the concession period (CP) more effectively. Instead of opportunism policy, the proposed methodology enables local government of Baghdad province to enhance its policies of awarding the partnership projects to increase private sector participation in infrastructure development. Finally, the proposed method can be used by investment practitioners as a decision support tool for contract concession period (CP), and is worth popularizing to design the contracted concession period (CCP) for partnership projects in Iraq, and also can use as a methodology to assess the critical aspects which related to partnership projects in general.
Highlights
Public Private Partnerships (PPPs) have become a major scheme in delivering public infrastructure at the last decades
Another form of the concession period (CP), it begins at completion of the construction
The concession period expires as soon as investment capital cost of the concessionaire has been repaid at a reasonable level of revenue;
Summary
Public Private Partnerships (PPPs) have become a major scheme in delivering public infrastructure at the last decades. This is because of public budget constraints and severe need for new or rehabilitated infrastructure. A fair distribution of benefits and risks is one of key factors in deciding concession period and an important prerequisite for cooperation between governments and the private sectors in a (PPP) project [2]. Mayoralty of Baghdad, one of the administrative authorities of the Baghdad local government, has announced its desire to establish a luxury tourist hotel at the central of Baghdad to support the tourism sector. The Mayoralty received several offers by various investors, the most prominent of which was design and constructs a luxury tourist hotel operates it by the investor. The analysis of time period data was summarized in Figure 4. to illustrate the life intervals of hotel
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