PPP Projects Research Articles

The Renegotiation on PPP Contracts and Subsidy Efficiency

Since 2014, PPP has been developing rapidly in China and widely used in infrastructure construction such as transport, energy, sewage. The characteristics of long time, large investment and high complexity of PPP projects lead to the high incidence of renegotiation. However, experience at home and abroad indicates that most renegotiations are caused by the speculation of firms, in order to obtain subsidies to avoid taking risks and thus bring social welfare losses. Therefore, how to set reasonable renegotiation subsidy to improve project efficiency is an urgent problem in practice. This paper examines the impact of renegotiation subsidies on moral hazard and project efficiency. The problem of moral hazard refers to the fact that firms choose to make low level of efforts in advance (before risks occur) aiming at private profits. The paper firstly analyzes the intrinsic influence mechanism of renegotiation subsidy on the efficiency of PPP project by building a game model based on the incomplete contract theory and game theory, and then discusses the key factors affecting project efficiency, and finally puts forward corresponding policy recommendations. The research results show that: Moral hazard makes risk events more likely to occur, but enterprises can avoid bearing all the losses with the support of renegotiation subsidies, thereby increasing the incidence of moral hazard. Therefore, over subsidy will reduce the ex-ante efficiency, even if the ex-post efficiency still can be achieved. Controlling the renegotiation subsidy to a certain extent can avoid the occurrence of moral hazard, and achieve ex-post efficacy and financial efficiency at the same time. Optimizing policy variables such as private profit B, opportunity cost of re-tendering τ and legitimate profit of firms R-I can lower the requirement of government’s negotiating power, making it easier to control the subsidy to the above scope. The research results can provide government with reference about renegotiation in decision making and provide theoretical support for the practice of PPP renegotiation.

Critical Factors to Achieve Sustainability of Public-Private Partnership Projects in the Water Sector: A Stakeholder-Oriented Network Perspective

A key challenge in the management of the public-private partnership project is to understand the critical factors for sustainability performance as well as their complex interaction. Majority of existing studies focus on identifying general factors without consideration of specific context of individual sector. To bridge the gap, unique characteristics of water PPP projects are taken into consideration in this study where the relationship among critical factors to achieve sustainable performance is analyzed from a network perspective. Stakeholder-associated factors and their interrelations were identified via extensive literature review and structured interview, and the social network analysis (SNA) method was employed to recognize the critical factors and their interactions in sustainability achievement of water PPP projects. As a result, seven stakeholder groups and 18 critical factor nodes were identified and further classified into four challenges when achieving sustainability. These challenges are (1) promoting ecological awareness and responsible citizen behaviour; (2) project construction quality; (3) ecological designs and technology innovations; and (4) project management capacity. These findings provide the stakeholders of water PPP projects with useful references for mitigating the risks and facilitating efforts to achieve better sustainability performance.

Research on Public Participation in Public Procurement: In the Context of Digital Economy

Public participation in public procurement is an important guarantee for its sustainable and healthy operation. In the era of digital economy and big data, public participation in information disclosure, service quality, and service pricing in public procurement plays an important role. Public private partnerships are an innovative form of public procurement. This study sorts out the issues of public participation in PPP projects, and puts forward several suggestions based on data thinking. In terms of public procurement project information disclosure, big data technology is used to improve the timeliness and breadth of information disclosure, and enhance the professionalism of information disclosure. Performance-oriented public procurement focuses on service quality, and guarantees service security through information platforms and professional third parties. The stakeholders use big data to supervise social organizations, so that they actively represent the public to file lawsuits in public procurement and relieve the public’s damaged rights and interests. The protection of the public’s right to know, suggest and supervise is inseparable from the training of professional talents by universities. Colleges and universities attach great importance to the cultivation of big data-oriented public procurement professionals, which includes improving teachers’ teaching ability, building a new knowledge system that combines big data and public procurement, and setting professional courses for students at different learning stages through connotative development.

Noncompete Provision Design for Transportation PPP Projects

AbstractProjects with poor noncompete provision design have caused heavy costs for both public and private organizations, primarily due to the embedded monopoly right of the private sector to colle...

Analysis of the Social Capital Financial Characteristics of Public–Private–Partnership Projects in Coastal Areas

Qin, Y. and Guo, X., 2020. Analysis of the social capital financial characteristics of public–private–partnership projects in coastal areas. In: Li, L. and Huang, X. (eds.), Sustainable Development in Coastal Regions: A Perspective of Environment, Economy, and Technology. Journal of Coastal Research, Special Issue No. 112, pp. 252-256. Coconut Creek (Florida), ISSN 0749-0208.This article takes the listed companies that have participated or are participating in coastal infrastructure Public–Private–Partnership projects as the research object, finds matching companies for them through the propensity score matching method, and quantitatively analyzes which financial characteristics of the social capital side affect the participation of coastal infrastructure Public–Private–Partnership projects from the micro level degree. The conclusion is that the two characteristics of corporate solvency and the nature of equity have had a significant negative impact on its participation in coastal infrastructure Public–Private–Partnership projects, and the impact of solvency is particularly important. When the empirical sample size is expanded, the asset management capability index is an influencing factor for companies participating in PPP projects one.

Research on Tax Planning of PPP Projects in China: Based on the Perspective of Digital Economy

The digital economy has become an important driving force for the growth of fiscal revenue in various countries. Tax planning is essential for the cost accounting of PPP projects, reducing corporate tax burdens, and increasing company value. This paper adopts a case analysis method, taking the smart highway PPP project in Guizhou Province as an example. Through statistical analysis, it is found that the value-for-money and big data of the PPP project affects tax planning, the project’ s value-added tax input and output items have time mismatches, and enterprises Income tax payment imbalance. In the context of the digital economy, the tax planning of China's PPP projects can be further improved: digital transformation and big data to prevent tax risks caused by value for money evaluation; based on digital technology to improve the value-added tax deduction chain, and digital communication platforms to alleviate time mismatch of value-added tax; use big data to monitor and balance project portfolio investment; improve the level of digital skills of financial personnel.

Influence of Managerial Skills on Completion of PPP Projects: A Case of Sondu-Miriu Power Project in Kenya

PPP projects are aimed at finding solutions to public problems by taking advantage of resources in the hands of public sector by combining the strengths in public and private sectors to solve problems that members of public face. The purpose of this study was to assess the Influence of Managerial Skills on Completion of PPP Projects: A Case of Sondu-Miriu Power Project in Kenya. The researcher adopted a correlational design where purposive sampling technique was adopted to select 39 management staff who were administered with questionnaires face to face or by mail. Mean and standard deviation were used for descriptive analysis while Pearson correlation was used for inferential purposes. The study found that delegating work to people with time to complete tasks moderately improves on completion of PPP projects. Further, following up on team members whose behaviors might impact projects negatively highly improves completion of PPP projects in terms of quality, time and cost. The study concludes that managerial skills strongly positively influence completion of PPP projects. The study recommends that, during implementation of PPP, selection of managers should be critically done to ensure that candidates with proven records and abilities are selected to implement the project.

The Stochastic Evolution Game of Knowledge Sharing in the Infrastructure PPP Supply Chain Network

Due to the complexity and randomness of environmental change, the knowledge-sharing behavior of members in the PPP supply chain will be affected by random disturbance factors. Traditional evolutionary game models cannot describe this effect. In this study, Gaussian white noise is introduced into the stochastic evolutionary game model of PPP supply chain knowledge sharing. The numerical simulation of the model is carried out to analyze the influence of parameter changes on the strategy selection of enterprise groups. The result shows that the strong knowledge power enterprise group is more sensitive with the variation of parameters than that of the weak knowledge power enterprise group. However, the weak enterprise group has a more vital willingness to share knowledge. Incentive measures can increase the knowledge-sharing benefits and promote the strong knowledge powerful enterprise group toward the sharing strategy. Increasing the mutual trust coefficient, reducing the sharing cost, and improving the enterprise’s transformation ability will help both sides to evolve into the sharing strategy more quickly. This study would have significance for PPP project performance and industry innovation.

Influence of Public Private Partnerships on Performance of Projects Among State Corporations in Kenya

Purpose: The overall objective of this study was to examine the influence of public private partnerships on performance of projects among state corporations in Kenya.Methodology: This research study adopted a descriptive research design approach. The study preferred this method because it allowed an in-depth study of the subject. The study employed stratified random sampling technique in coming up with a sample size of 127 respondents from a total of 187 target population. Structured and semi structured questionnaires were used to collect data. Data gathered from the questionnaires administered was analyzed by the help of Ms Excel and SPSS version 22, while output was presented inform of frequency tables and charts. The study used both descriptive and inferential statistics to show the relationship between variables.Results and conclusion: The regression equation above has established that taking all factors into account (policy framework, feasibility studies, value for money and risk mitigation) constant at zero, performance of projects among state corporations will be an index of 1.967. The study found that a unit increase in feasibility studies will lead to a 0.358 increase in the performance of PPP projects among state corporations. The P-value was 0.000 and hence the relationship was significant since the p-value was lower than 0.05. The findings presented also shows that taking all other independent variables at zero, a unit increase in policy framework will lead to a 0.132 increase in the performance of PPP projects among state corporations. The P-value was 0.02 which is less 0.05 and thus the relationship was significant. In addition, the study found that a unit increase in value for money will lead to a 0.121 increase in the performance of PPP projects among state corporations. The P-value was 0.000 and thus the relationship was significant because the p-value was less than 0.05. The study also found that a unit increase in risk mitigation will lead to a 0.05 increase in performance of PPP projects among state corporations. The P-value was 0.03, which is less than 0.05 and thus the relationship was significant. The findings of the study indicated that policy framework, feasibility studies, value for money and risk mitigation have a positive relationship with performance of projects among state corporations in Kenya.Unique contribution to theory, practice and policy: The study recommended that public institutions should embrace public private partnerships so as to improve performance of projects among state corporations and further researches should to be carried out in other public institutions to find out if the same results can be obtained.

Influence of Selected Factors on Implementation of the PPP Projects in Transport

Countries seek to use the knowledge and capital of the private sector to minimise the gap between the transport infrastructure needs and the capacity of their budgets. A form of private investor involvement is usually a public-private partnership PPP. However, success in implementing the PPP projects requires appropriate economic, legal and institutional conditions. The article presents results of research aimed at identifying the PPP success factors in Poland and assessing the strength of impact of individual factors on the implementation of projects. An analysis of the subject literature was carried out, based on which the success factors were determined. Next, econometric modelling methods were applied (correlation and regression), which were used to measure the degree of correlation between the variables and showed the relationships of variables to each other.

Financial Effect of Labour Related Risks on Completion of PPP Projects

Efficient management of construction works should focus its attention on utilizing labour, equipment, and raw materials in the right way. Besides, they claim that responsible parties should evaluate labour productivity continuously and that cost control measures should be developed. Low productivity witnessed in construction is linked to internal challenges including disputes, abandonment of projects, excess budget, and time overlaps. The objective of the study was to determine the financial effect of labour related risks on completion of PPP projects. A descriptive survey design was used with simple random sampling targeting 85 members of the management team at the completed Sondu-Miriu Power project. The participants were administered with questionnaire which were sent by mail (in some cases) and selected participants encouraged to respond. Data obtained was analysed through SPSS platform using descriptive statistics and Pearson Moment correlation as inferential statistics. The study found that labour related risks in construction PPP projects included failure by employees and experts to complete assigned tasks, injuries and deaths, changing labour demands during the project as well as cases of go slow. Construction labour related risks affected the financial cost, time and quality of work performed in the construction project. The study concludes that labour related risks have a financial effect on completion of PPP projects such that as the risks increase, the financial cost increases. The study recommends that more focus should be placed on the identification and recruitment of project staff as well task allocation.

Forfaiting by Waiver as an Alternative to Project Financing for the Realization of Public-Private Partnership Projects in Poland

Despite growing social infrastructure investment needs, public-private partnership (hereinaf- ter: PPP) is not developing in accordance to expectations in Poland. Only 25% of initiated proceedings conclude in the realization of a contract – a significantly lower rate as compared to other European nations. While there are many potential explanations for the poor development of PPP in Poland, this article showcases the inefficiencies in the project financing model, as well as analyzes the appli- cability of forfaiting by waiver for Polish PPP projects. It outlines the necessary conditions as well as potential benefits to PPP development should the forfaiting by waiver model be applied comprehensively as a mode of financing for Polish PPP projects. Critical success factors in PPP will be addressed, as well as project risk division and factors influencing the project price.

Have PPP Project Improved the Efficiency of Medical Facilities Supply? : The Example of Inland Port Urban

Pei, J.P. and Lian, C., 2020. Have PPP project improved the efficiency of medical facilities supply?: The example of inland port urban. In: Guido Aldana, P.A. and Kantamaneni, K. (eds.), Advances in Water Resources, Coastal Management, and Marine Science Technology. Journal of Coastal Research, Special Issue No. 104, pp. 967–971. Coconut Creek (Florida), ISSN 0749-0208.To further explore the influence of PPP project on the supply efficiency of medical facilities, the PSM-DID method is adopted to make an empirical test of the supply efficiency of medical facilities in PPP projects on the basis of theoretical analysis. The results of this paper show that PPP project is still an important policy tool to make up for the shortage of public investment and promote the reform of medical and health undertakings. We should focus on increasing the construction and support of high-quality, high-tech PPP medical and health projects, provide more high-quality medical resources, and further promote the reform of the medical and health system mechanism.

VALUE FOR MONEY IN PUBLIC-PRIVATE PARTNERSHIP PROJECTS IN THE FIELD OF STREET LIGHTING IN THE REPUBLIC OF SERBIA

Public administration reform, better known as the New Public Management - NPM, which began in the mid-1970s, had a key impact on the development of modern public administration. The NPM emphasizes the economic values of public administration, to the detriment of its other values. Public Private Partnership- PPP is one of the basic elements of NPM doctrine. PPP is a partnership between the public and private sector that aims to provide a service traditionally provided by the public sector. An integral part of every PPP is the Value for Money methodology. The “Value for money”- VfM method emerged in this process of public administration reform, first in the UK. The document of the British Government Private Finance Initiative (PFI) from the year 1992, presented the basis for the creation of a new so-called “Venture”, which at that time was called a joint venture, and which is today known as PPP. PPP is a relatively new institute that has existed in the Republic of Serbia since 2011. In this paper, we will deal with the application of the VfM methodology in PPP projects related to street lighting in the Republic of Serbia, and try to give answer about social and economic justification of PPP and potential economic savings that can be achieved in the public sector through the implementation of PPP. At the present time, when there is more and more talk about the need for environmental protection, sustainable development and energy efficiency, PPP projects can have an increasing importance in this area. For this reason, we have limited the application of VfM methods in PPP projects in the Republic of Serbia only to street lighting projects which provide the mentioned goals.

The value added chain in the mechanism of public-private partnership for the development of the land use economy of rural territories

Purpose. The aims of this paper are (i) to explore public-private partnerships as a tool for economic development of rural economies in developing countries and countries with economies in transition in order to ensure sustainable use of nature and increase public welfare of rural communities through the added value chain; (ii) to develop proposals for the implementation of public-private partnerships on land management and land use in Ukraine. Methodology / approach. The methodological approach involves study of the world’s PPP practice in land management and land use (including the use of land in forestry), study of the connections between PPP projects and scientific approaches to the concept of sustainable development and the added value chain, as well as analysis of domestic scientific bibliography, which relate to the subject of this study. Results. The authors found that the declared priorities of the Agenda for Sustainable Development until 2030 require the application of integrated approaches. In particular, the programme in the mechanism of sustainable development management in the form of PPP to ensure sustainable use of nature and increase the social welfare of rural communities. Because the programme approach here involves investing in natural resources and environmental protection and should cover the entire value chain, which directly or indirectly affects the efficiency of natural rural assets, as well as the use and application of innovative technologies. Originality / scientific novelty. It is substantiated that progress in achieving the declared priorities, in particular in the field of environmental protection, growth of public rural welfare, etc. is possible only in a combination of strengths of all PPP partners, which will eliminate the shortcomings and weaknesses of rural communities. In contrast to existing approaches to the development of the land use economy of rural territories, the basis of the synergy of the parties to PPP is a special natural resource – land, which performs environmental, economic, legal and socio-cultural functions, and determines the form and content, which actually builds sustainable development, including rural. A wide range of PPP forms has been further developed, varying in the degree of involvement and risk taken by the private party in relation to the development of the land use economy of rural territories. The approach to the value chains organization in the development of PPP projects on land management and land use and providing security of land use in terms of taking into account the land use of farmers, formed on different rights, has been improved. The author’s project PPP in the production of pellets a private investor in lumber logging waste provided by some state-owned enterprise both subject to the extension of the moratorium and without its effect is developed. Practical value / implications. The authors’ research shows that the introduction of the value chain in the mechanism of public-private partnership will lead to significant effective changes in the development of the land use economy, in particular of rural territories. Namely, with the use of appropriate policies it will ensure the provision of sustainable use of natural resources and growth of public welfare, in particular rural communities. This approach allows to involve all stakeholders (government, community, business) for effective management of natural assets in general and agriculture in particular and will increase their level of capitalization and investment attractiveness.

A risk-adjusted decoupled-net-present-value model to determine the optimal concession period of BOT projects

PurposeThe net-present-value (NPV) method is well-known for its drawbacks. To overcome some of these NPV weaknesses this paper aims to provide a methodology to determine an optimal concession period that treats risk and time separately. The purpose of this paper is to apply the notion of risk-adjusted decoupled net present value (risk-adjusted DNPV) to determine a conception period taken into consideration synthetic insurance premiums as compensation for risks.Design/methodology/approachThis paper conducts theoretical and empirical analysis and provides an integrated model for deriving concession periods of any PPP projects. The model is able to capture several contractual issues such risks costing and other contractual scenarios. Methodologically, the paper addressees both the issues of risk-based cost–benefit analysis and cash flow analysis bearing an emphasis of risk-adjusted DNPV to compute an optimum concession period.FindingsThe results show that using DNPV will produce a shorter concession period comparatively to NPV. The consequence of this is that the public sector will gain financially from an earlier transfer of the concession.Research limitations/implicationsThis paper contributes to the PPP literature by combing DNPV and risk to determine the PPP concession period for the mutual benefits both the private and public sectors. The decoupling of risk from traditional NPV computation will allow for risk pricing and tradability through insurance and allocation.Originality/valueThe attempt to decouple time and risk in the computation of NPV is the added value to the body of knowledge.

ҚАЗАҚСТАН РЕСПУБЛИКАСЫНЫҢ АГРАРЛЫҚ САЛАСЫНДАҒЫ МЕМЛЕКЕТТІК-ЖЕКЕШЕЛІК ӘРІПТЕСТІК

The study of theoretical approaches and substantiation of recommendations for improving PPP mechanisms in AIC is dictated by their relevance and practical significance, which allow, on terms of mutual benefit for the state and business, to expand the resource base of agricultural production. The problems of using public-private partnership in the field of agriculture of the Republic of Kazakhstan are analyzed and its need for increasing the competitiveness of the agro-industrial complex is shown. There are presented 4 types of common PPP projects in the development of agribusiness, proposed by the UN Food and Agriculture Organization. The reasons that hinder the active development of public-private partnerships in agricultural sector are identified: lack of cash; often low possibility of obtaining loan from bank; insufficient qualifications of specialists. The main directions have been identified that have significant potential for promising PPP programs: production of organic products in crop and livestock production sectors; an increase in the volume of meat products and milk; development of greenhouse economy, specializing not only in growing vegetables, but also in floriculture. A SWOT analysis of the use of public-private partnerships in agricultural production is presented, its strengths and capabilities, weaknesses and threats are shown, and, based on the results of the study, conceptual directions for the development of the PPP institute in AIC of the republic are highlighted. The following advantages of public-private partnership are reflected: the use of its mechanism will help to attract additional investment in agriculture, modernize production facilities, increase the profitability of production, saturate the domestic market with quality and affordable food, realize the country's export potential, and increase tax revenues.

A Scientometric Review of System Dynamics Applications in Construction Management Research

Construction management can be regarded as a complex and dynamic system. In recent years, system dynamics (SD) has been widely applied to solve the complex and dynamic problems in the construction management. However, there is a lack of a scientometric analysis to investigate SD applications in construction management from an objective perspective. To fill out this research gap, this study retrieved a total of 222 relevant articles from the Scopus database. Then, VOSviewer was employed to analyze the collected literature from five aspects (i.e., co-authorship, published journals, co-occurring keywords, article citations, and regions). Based on the analysis results, four mainstream research themes were identified and discussed, including “risk management”, “waste management”, “energy management”, and “construction productivity”. In addition, future research directions, such as “construction risk allocation in PPP projects”, “evaluating the economic feasibility of construction waste landfilling centers”, “identifying the variables affecting lighting infrastructure energy consumption”, and “assessing construction productivity for technology-intensive activities”, were proposed. The contribution of this study lies in that it helps both scholars and practitioners to solve the complex and dynamic problems in construction management.

An Algorithm for Implementing Public-Private Partnership Tools in the Sports Industry Management System

The presented study examines efficient tools for the development of the sports industry based on PPP in the context of limited budget allocations and the need to introduce innovative management methods and new technologies for providing services. Aim . The study aims to develop an algorithm for implementing public-private partnership tools in the sports industry management system based on the analysis of theoretical and methodological foundations of efficient interaction between the public and private sectors. Tasks . The author considers the specific features of the mechanism of formation and implementation of public-private partnership projects, identifies efficient tools for the development of the sports industry based on PPP, determines the stages of PPP implementation, and develops a scheme for implementing the PPP project in the sports industry management system. Methods . This study uses general scientific research methods, including analytical, systems, comparative, and economic analysis, and the graphical approach. Results . The specific features of the organizational and economic interaction between the government, business, and population within the framework of PPP are examined, which involves achieving social and economic goals, creating conditions for the functioning of the infrastructure complex, and meeting the needs of society. Strategic indicative planning is found to be the most effective mechanism for the implementation of PPP tools in the development of infrastructure projects and coordinating the interests of the government and business entities. This mechanism requires the government to have a specific global goal and national priorities that would direct and motivate economic agents to fulfill them in the national interests. The author has developed an algorithm for the implementation of public-private partnership tools in the sports industry management system. Conclusions . The developed algorithm for implementing PPP in the sports industry is a general scheme for step-by-step implementation of a PPP project as a methodological approach to meeting social needs, improving the social system and the public good in order to meet the interests of the state and the private sector and improve the well-being of the population.

On Living Dam Planning for Earthquake Prevention and Disaster Reduction

Based on the comprehensive research on the technology of “geographical name code”, “modern nonmetallic structure”, “high temperature fermentation biogas digester waste disposal power generation”, “Internet plus earthquake prevention and disaster mitigation APP” and “new theory of securities public investment”, this paper puts forward a new concept of “earthquake prevention and disaster reduction” in dam, which will obviously alleviate the shortage of farmland, cross river traffic, small hydro-power development in mountainous areas, and environmental protection waste. One belt, one road area, and the county level place code are proposed to lay the foundation for the new intelligent platform for earthquake emergency international earthquake preparedness and disaster reduction. The basic theory of securities public investment and its application in the PPP project for earthquake prevention and disaster mitigation are put forward, and the specific planning plan and budget for the construction of the dam in the poverty-stricken mountainous area are put forward. We will demonstrate the one to one belt, one road and one country. This paper is originated from practice and has a new idea, which will obviously promote the new development of human earthquake prevention and mitigation.