Abstract
Apart from the loss of time and money, disputes between public authority and private partner in China’s public-private partnership (PPP) projects are destroying the government’s image of PPP support and the private partner’s investment confidence. This article aims to explore the main causes for PPP disputes, present the results of disputes, and then predict the litigation outcomes. Based on 171 PPP litigation cases from China Judgements Online within 2013–2018, the research identified 17 legal factors and explained how these factors influence the litigation outcomes, which are named as “prediction approach” in this study. Nine machine learning (ML) models were trained and validated using the data from 171 cases. The ensemble model of gradient boosting decision tree (GBDT), k-nearest neighbor (KNN) and multi-layer perceptron neural network (MLP) performed best compared with other nine individual ML models, and obtained a prediction accuracy of 96.42%. This study adds meaningful insights to PPP dispute avoidance, such as high compensation of expected revenues could prevent the government from terminating the contract unilaterally. To some extent, if parties consider the case litigation outcome, they are more likely prefer a rational settlement out of court to avoid further aggravation of the dispute, and would also alleviate the pressure of litigation in China.
Highlights
Public-private partnerships (PPPs) allow non-public sector funds to participate in the public infrastructure projects to make use of the private sector’s advanced technology and management experience (Dansoh et al, 2020; Feng et al, 2017)
The gradient boosting decision tree (GBDT) attained the highest accuracy of 96.06%, whereas the support vector machine (SVM) attained lowest accuracy of 69.87%
The GBDT model achieved the best performance (96.06%) in recall
Summary
Public-private partnerships (PPPs) allow non-public sector funds to participate in the public infrastructure projects to make use of the private sector’s advanced technology and management experience (Dansoh et al, 2020; Feng et al, 2017). PPP arrangements have been widely introduced for the construction of public infrastructure by a growing number of governments due to advantages, such as saved public investments and improved public service quality and supply efficiency (Carrillo et al, 2008; Dixon et al, 2005; Feng et al, 2017). The Ministry of Finance (MOF) of the People’s Republic of China (PRC) and the National Development and Reform Commission (NDRC) began to promote actively the application of PPP method and encourage private capital to participate in infrastructure construction (Cheng et al, 2016). The latest statistics released by the MOF showed that at the end of June 2019, a total of 8,921 projects have been collected by China PPPs Center, with a total investment of 13.5 trillion CNY (Chinese Yuan) (China Public Private Partnerships Center, 2019).
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