FINANCIAL ISSUES IN PUBLIC PRIVATE PARTNERSHIPS

Abstract

Public-Private Partnerships (PPPs) have gained significant importance in academia, government, and the construction industry over the last three decades. As a result, numerous studies have been published on the topic. These studies investigate various issues associated with PPP projects such as the length of the concession period, the selection of the private consortium, and the laws, rules and regulations that govern PPP implementation. However, there is a lack of systematic overview about issues with particular attention to financial aspects. This paper presents the outcome of a literature review that has been conducted to collect information about financial issues encountered in PPP implementation. This review included a total of 33 papers published in major journals and conference proceedings in the construction field in the last 25 years. At the end of the review, it was possible to identify a set of 19 financial issues that were grouped into five categories, namely (1) financing system, (2) financial market, (3) transaction costs and delays, (4) the public agency, and (5) the private consortium. The choice of focusing on this theme was prompted by the fact that the other issues (i.e., social, legal, and political) are all linked to financial issues. The identification of the salient issues related to financial aspects in PPPs is expected to contribute to the state-of-art in PPP research and implementation as it can pave the way to an empirical investigation that can in turn lead to a streamlining of the PPP processes throughout the world.