Public Infrastructure Procurement Research Articles

PUBLIC-PRIVATE PARTNERSHIP PROCUREMENT TRANSPORT INFRASTRUCTURE DELIVERY: ASSESSING THE MANAGERIAL CAPABILITIES OF PUBLIC-SECTOR ORGANIZATIONS IN AFRICA

The lingering imbalance between infrastructural services demand and supply poses serious threats to the fiscal budget balance from contingent liabilities of African countries. Despite the increasing private investment commitments and adoption of public-private partnership procurement (PPP) options to address the widening infrastructure gaps in Africa, the failure in the delivery of public infrastructure projects is yet a common phenomenon. This study therefore examined the managerial capabilities of public-sector organizations (PSOs), who steer the provisions of public infrastructure, to investigate their readiness to achieve the value for money from private funding and the benefits of PPP options. The study conducted a self-study structured questionnaire survey on professionals in PSOs in Africa, particularly Nigeria, who have been directly involved in the delivery of public infrastructure projects via PPP. The professionals were purposively sampled and the primary data obtained was subjected to descriptive and inferential analysis. The study revealed that the PSOs have internalized about 41 PPP-capabilities for the delivery of public infrastructure projects. Up to 40 PPP-capabilities were exhibited on an average score (41-60%) level, with mean score (MS) value range of 3.13 ≤ MS ≤ 3.70, for the public projects procured. The study established the existence of significant interdependence of p < 0.001, which indicated sufficient correlation between 31 PPP-capabilities and explained the 10 main components of managerial capabilities possessed by the PSOs. Some of the components clustered around public infrastructure planning and adaptability to PPP programme, project delivery parameters and control, suitable public infrastructure procurement knowledge, public policy awareness and innovation, and governance. The study provides information crucial for public infrastructure delivery success towards sustainable national economic recovery and development.

Cartels in infrastructure procurement—Evidence from Lebanon

AbstractWe study cartels in public infrastructure procurement and analyze the conditions under which they succeed in generating rents. We first conceptualize the interplay of the central actors of a procurement project, notably the contractor, the procurement agency, as well as the supervision and design consultants. By focusing on consultants, our framework includes important yet understudied actors in cartels that design tenders, evaluate bids, and supervise the implementation of projects. We go on to explore an original dataset of infrastructure procurement contracts in Lebanon and analyze the conditions under which powerful political elites can broker deals to overprice and/or overspend contracts. To examine how cartels operate, we identify the political connections of contractors and consultants and classify them according to their “quality” in terms of access to institutional functions of the implementing agency. We argue that design consultants serve as the lynchpin of the cartel by reducing transaction costs for searching, bargaining, and enforcing of corrupt deals.

Transparency and budget savings in public procurement: evidence from Thailand’s Infrastructure Transparency Initiative (CoST)

Purpose This study evaluates the effect of transparency measures on public procurement efficiency, focusing on Thailand’s Infrastructure Transparency Initiative (CoST). This study aims to understand its impact on the country’s public infrastructure procurement practices. Design/methodology/approach This paper analyses Thailand’s government construction procurement data, focusing on budgetary savings and CoST process participation. Budgetary savings are this study dependent variable, while the main intervention variable is the adoption of the CoST data disclosure standard. This study uses multiple linear regression, fixed-effects model and propensity score matching with the logit model for a comprehensive analysis. Findings This study shows that using the CoST data disclosure leads to notable budget savings in Thai public construction procurement. With CoST’s introduction, the savings rose by Baht 9.6m, and even with added controls, the savings remained significant at around Baht 3.3m. The savings consistently stay near 5% across different models. The propensity score matching method confirms these results, consistent with factors such as open bidding and agency categorisation. Research limitations/implications This study might not capture all benefits, especially non-financial ones. Thailand’s unique context and potential biases in data sources also need consideration. Practical implications CoST evidence backs Thailand’s procurement transparency. This study recommends broadening CoST, streamlining online platforms and promoting digital public engagement. Training stakeholders and partnering with state-owned enterprises and local agencies is vital to align with CoST and mitigate risks. Originality/value This study shows a clear link between transparency from information disclosure and budget efficiency in public procurement, using data from Thailand. It highlights the potential of transparency measures in developing countries.

Seeking the Optimisation of Public Infrastructure Procurement with NEC4 ECC: A Peruvian Case Study

The modern civil engineering and construction sector requires collaborative work environments, learning and trust among all parties involved, qualities that are absent in the Peruvian reality. This study, which is based on an extensive literature review, investigates this challenge. The study reflects upon (i) the current situation of public works procurement in Peru and (ii) the New Engineering Contract (NEC), which has recently been implemented in Peruvian Special Public Infrastructure Projects. Comparisons are presented between the characteristics, documentation and roles of these two systems, with the purpose of understanding and representing the advantages, disadvantages and possibilities of integrating the good contractual management practices of the NEC4 Engineering and Construction Contract into the traditional Peruvian State Contracting Law (Ley de Contrataciones del Estado: LCE). The research is validated through the case study of a high-impact road infrastructure project in the city of Arequipa, Peru, which revealed five main deficiencies from Peruvian procurement processes which hinder good contractual management and, also, facilitated an initial assessment of the challenges and improvement opportunities in public infrastructure procurement. Thus, a contribution is made to closing the knowledge gap regarding the implementation of the NEC4 ECC in public sector works.

“One-size-fits-all” public works contract does it better? An assessment of infrastructure provision in Italy

Public infrastructure procurement is a crucial policy tool, a prerequisite for public and private investments and for economic and social capital growth. Low performance in execution severely hinders infrastructure provision and benefits delivery. One of the most sensitive phases in public infrastructure procurement is the design because of the strategic relationship that it potentially creates between procurers and contractors in the execution stage, affecting the costs and the duration of the contract. In this paper, using recent developments in non-parametric frontiers and propensity score matching, we evaluate the performance in the execution of public works in Italy. The analysis provides robust evidence of significant improvement of performance where procurers opt for design and build contracts, which lead to lower transaction costs, allowing contractors to better accommodate the project in the execution. Our findings bear considerable policy implications.

Reforming procurement standards in order to effectively deliver public infrastructure: Rethinking the regulatory environment in post-pandemic South Africa

This research study identifies a specific layer of regulation within the governance regime which is a key factor impeding the procurement and delivery of public infrastructure in South Africa. We first identify current weaknesses of conflict and confusion at the level of soft law in the procurement and delivery of public infrastructure projects. Then we present a detailed case study of a successful South African megaproject (the procurement and delivery of the public infrastructure for two new universities, the New Universities Project) to demonstrate that these weaknesses can be avoided. The research note’s regulatory account focuses on the key element of quality in the South African public procurement regime, distinguishing that concept from the often conflated notion of value-for-money. We discuss how the problems identified could be addressed by means of changes to soft law prior to the finalisation of the current and ongoing public procurement legislative reform process.Contribution: Through a case study of the on-time and with-budget public procurement and delivery of two new universities for South Africa, the article demonstrated that national policy on public infrastructure can be successfully implemented, with attention to the key soft law layer of regulation.

Combinatorial versus sequential auctions to allocate PPP highway projects

This article models a procurement process for allocating multiple related public-private partnership (PPP) highway projects. Traditionally, public infrastructure procurement processes have used a sequential allocation mechanism, despite the potential benefits of allocating all projects at once. The main contribution of this research is to address the question whether these projects should be auctioned individually, in sequential auctions, or at the same time, in a combinatorial auction. Our goal is to understand the impact of the allocation process in terms of efficiency and social welfare. In sequential auctions, bidders submit their offers for each project independently. However, in combinatorial auctions, contractors have the ability to bid for their preferred packages (combinations of projects), reflecting synergies or entry costs, if any, in their valuations. We have compared the impact in terms of efficient allocation and social welfare of both mechanisms in order to help policymakers to take future decisions when facing these processes. The methodology used to address these core questions in the multidisciplinary environment described is based on social simulations, which involves conducting analysis by means of computational simulations. For this work we have created a sophisticated valuation model adapted to the public infrastructure sector and we have developed a simulator which includes multiple types of bidders, projects and several scenarios. The experimental setup is based on the second wave of the Colombian 4G program, a case involving the allocation of 9 highway construction projects across the country. We have also included references to multiple examples of real markets in which these mechanisms could be implemented. Therefore, this research provides a valuable reference for policymakers chasing to enhance market design that could be applied in many real-world scenarios. The results reveal that the combinatorial mechanism improves the process in terms of optimal allocation and efficiency, yielding significant savings for all parties.

Private Sector Investment in Infrastructure in Sub-Saharan Africa Post-COVID-19: The Role of Law.

Sub-Saharan Africa (SSA) is the lowest income region of the world with a considerable number of low-income countries. The region is challenged by a massive infrastructure deficit. In recent years, the governments of the countries in the region have expressed the desire to bridge the huge gap in infrastructure assets through a partnership with the private sector using the public-private partnership model. However, the advent of the Coronavirus (COVID-19) pandemic which has resulted in unplanned public sector expenditure poses a new kind of hurdle to climb for states in the region. As such, there is a need for governments in SSA to create and sustain efficient opportunities for private sector investment in infrastructure procurement and maintenance. This article adopted the doctrinal legal research method as well as review of literature in the examination of the role of law in creating a healthy and sustainable business environment for private sector participation in infrastructure financing and operation in a post-COVID-19 era in the SSA region. The article recommends among others, the enactment of legislation to create an enabling environment for raising domestic capital for the purposes of private sector–led public infrastructure procurement as well as the implementation of strategies suited for developing economies to attain successful outcomes in private sector backed infrastructure procurement.

Critical skills for infrastructure procurement: insights from developing country contexts

PurposeEffective procurement of infrastructure is partly dependent on infrastructure procurement personnel having the skills that are important for the discharge of their role. Addressing the infrastructure deficits in developing countries, therefore, calls for an understanding of the skills that are important for the discharge of the roles of public personnel that are involved in infrastructure procurement. This study aims to investigate these skills from the perspective of public infrastructure procurement personnel in the sub-Saharan African region.Design/methodology/approachA questionnaire survey of procurement personnel yielded 590 useable responses, which were analysed using t-tests and exploratory factor analysis (EFA).FindingsEFA established eight key components of important infrastructure procurement skills to include skills related to: project success factors; social and environmental sustainability; marketing and e-procurement; project phase management, the application of procurement laws and procedures; soft skills, ICT and communication; and data analysis and team building.Originality/valueThe findings are crucial in developing infrastructure procurement capacity building programmes that would be appropriate for infrastructure procurement personnel in developing country contexts. Infrastructure procurement personnel ought to engage more in capacity development training that is aligned to enhancing skills within the eight components.

An Evaluation of Project Risk Dynamics in Sino-Africa Public Infrastructure Delivery; A Causal Loop and Interpretive Structural Modelling Approach (ISM-CLD)

Africa’s growth in public infrastructure provision has been fueled by the collective effort of the government authority and foreign private investors. China, through state-owned corporations, has become one of the leading infrastructure financier springing up numerous projects in transport, energy, oil and gas, water, and sewage sectors in Africa. Infrastructure procurement in developing countries comes with complexities and uncertainties. While Sino-Africa transnational public–private partnerships (TPPP) are becoming an increasingly popular route for public infrastructure procurement, their specific project risks and dynamics are not yet fully understood due to the typical assessment of risk autonomously. This paper identifies pertinent project risks in Sino-Africa TPPPs and applies system thinking in evaluating their behaviour and dynamics. An extensive review of literature and expert opinion employing semi-structured interviews was adopted in the identification and assessment of risk factors. Additionally, the study applied causal loop and interpretive structural modelling as an integrated approach in the assessment of risk behaviour from a systems perspective. Results indicate that risk factors associated with Sino-Africa TPPPs are interactive and portray curious systemic behaviour. Risk factors like force majeure and others associated with the governance structure and stability of the host African country are most influential, and their occurrence could inhibit project success. The study recommends that in conjunction with the conventional risk assessment by impact, systems thinking can be adopted to evaluate and comprehend the dynamics and interactions amongst the risk factors. This will improve risk assessment efficiency and fair allocation and treatment of risks as a conduit for project success and promote a win–win partnership for project actors.

Governance quality and public sector procurement of infrastructure projects in developing countries: evidence from Nigeria

PurposeIn developing countries, governance structures are reputed to be weak, and infrastructure procurement is largely achieved through public sector financing. This study aims to examine the impact of governance quality on public sector infrastructure procurement in Nigeria.Design/methodology/approachData on public infrastructure expenditure (CAPEX), revenue (REV) and debt burden (DEBT) were sourced from the Central Bank of Nigeria (CBN) and National Bureau of Statistics (NBS) for the period 2000–2017. In addition, the Corruption Perception Index (CPI) of Nigeria for the period was obtained from Transparency International. Data were analysed using Ordinary Least Square regression and Granger Causality Test.FindingsResults indicate that CPI and DEBT have negative effects on public infrastructure procurement, whereas REV has a significant positive impact. The findings suggest that an increase in public sector corruption leads to increase in the share of public budget allocated to infrastructure procurement. Moreover, an increase in the amount allocated to debt burden lowers the share of public resources available for infrastructure procurement. Findings also show that revenue is a leading indicator of infrastructure procurement, and public expenditure for infrastructure procurement is leading cause of public sector corruption.Social implicationsIn Nigeria, resources for financing infrastructure are scarce, and there have been reports of poor governance in infrastructure procurement. The establishment of a relationship between governance quality and infrastructure procurement will help in more efficient allocation of scarce public resources.Originality/valueTo resolve the governance-infrastructure question, the study established causal relationships between governance quality variables and public expenditure on infrastructure.

Public Infrastructure Procurement Practice and Challenges in the Bamenda Municipality, North West Region Cameroon

Public infrastructures play a significant role in poverty reduction, human development and spatial interaction of the population. The practices of stakeholders in the procurement system in Bamenda are a controversy in the contemporary socio-political discourse. Through these practices, public infrastructures are provided to and for the population. This paper seeks to uncover the myriad of challenges involved in the procurement practices in Bamenda. The study made use of both qualitative and quantitative data, obtained using secondary and primary sources from documentary exploration and extensive field work. Secondary sources included books, annual reports and archives of Divisional and Regional Delegations, Inspectorates of Education, Regional Institute of Statistics and Public Contracts Regulatory Agency, North West amongst others. Primary data was obtained over three months of extensive field investigations through questionnaires interviews and focus group discussions. A GPS was utilized to obtain geographic coordinates of publicly procured infrastructures, particularly health, educational and road infrastructures. Results reveal that there is complexity in the way procurement is undertaken for socio-economic benefits to the population. Procurement principles are ineffectively applied, leading to inefficient execution of contracts. Late payment of contract funds amongst others is a cause of inefficient execution and lateness in the delivery of procurement output in the domains of health, roads and educational infrastructures. The study recommends project owners to release contract funds earlier than usual and contractors who enhance poor execution of projects and uncivil road users who facilitate road degradation or cause damages to projects be severely sanctioned. The Law No. 73/7 of 7 December 1973 on the preferential claim of the treasury to safeguard public funds by Municipal and Regional Councils should be effectively implemented.

White Collar Crime: Unearthing Collusion in the Procurement of Infrastructure Projects

Engineers and other construction professionals need to take the lead to clarify the facts when a possible fraud in public infrastructure procurement is identified. A robust approach for producing scientific evidence to determine the presence of collusive bidding where questionable confessions need to be proven in court is presented. The concepts of game theory are used to demonstrate that economic principles support the confessions of senior executives from a cartel of 16 large construction companies. Relying on the confessions and defendants’ statements from the Brazilian Federal Police's anti-corruption investigation referred to as “Operation Car Wash,” the article demonstrates that the behavior of criminals was conscious and intentional rather than incidental, proving the <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">mens rea</i> necessary to establish the white-collar crime of collusion.

A review of corruption in public procurement in Indonesia

The implementation of a good State is one of the benefits of preventing corruption, meaning that Indonesia’s funds and natural resources are fully managed for the interests and prosperity of the people. The public understands corruption as something detrimental to state finances. In Law 31 : 1999 in conjunction with Law 20 : 2001 concerning Eradication of Corruption Crime there are 30 types of corruption. One of the seven Corruption Crime groups is gratification. Two of the seven principles of gratification control are transparency and accountability. The principle of openness is reflected in the mechanism for reporting on receipt of gratuities to the Corruption Eradication Commission. This study attempts to identify various aspects associated with the potential occurrence of corruption in the procurement of Government sector infrastructure projects based on a literature review through existing legislation in Indonesia. The results of the study are expected to be able to find indicators as potential corruption in public infrastructure procurement.

Public Infrastructure Procurement: Detecting Collusion in Capped First-Priced Auctions

AbstractWorldwide, numerous economies have been subjected to the unnecessary economic and social impacts that materialize from the collusion that has taken place when public infrastructure has been...

Performance-Based Road Contracts in Zambia

Public infrastructure procurement involves significant incentive problems because contracts are often incomplete. Output- and performance-based road contract (OPRC) is an innovative contractual scheme that has been developed in the road sector. Unlike traditional input-based procurement methods, contractors can freely design, invest in, and maintain roads to deliver an agreed level of road functionality, which helps to ensure the sustainability of road maintenance. Using data from Zambia, this paper shows that major reconstruction works under OPRC arrangements are effective at increasing agricultural production. In particular, small-scale farmers who currently use only a few advanced inputs, can benefit from improved connectivity from improved roads. The results also indicate the possibility of improved accessibility, which allows new economic opportunities for farmers who currently do not participate in market transactions.

Infrastructure procurement capacity gaps in Nigeria public sector institutions

Purpose The achievement of sustainable development goals is linked to the procurement of public infrastructure in a manner that meets key procurement objectives, such as sustainability, value-for-money, transparency and accountability. At the heart of achieving these procurement objectives and others is the capacity of public procurement institutions. Whereas previous reports have hinted that there are deficiencies in procurement capacity in Nigeria, insights regarding critical aspects of organisational capacity deficiencies among different tiers of government agencies is limited. The purpose of this paper is to investigate the critical gaps in the procurement capacity of state and local government agencies involved in the procurement of public infrastructure in Nigeria. Design/methodology/approach The study employed a survey of public infrastructure procurement personnel which yielded 288 responses. Findings Among 23 operationalised items that are related to organisational procurement capacity, none is perceived to be adequate by the procurement personnel. Additionally, among 14 procurement objectives only 1 is perceived as being attained to at least a high extent. Originality/value The findings underscore the acuteness of organisational procurement capacity weaknesses among public procurement institutions within Nigeria’s governance structure. It is, thus, imperative for policy makers within state and local government to formulate, resource and implement procurement capacity building initiatives/programmes to address these deficiencies. Additionally, the organisational procurement capacity items operationalised in this study could serve as a useful blueprint for studying capacity deficiencies among public infrastructure procurement agencies in other developing countries, especially within sub-Saharan Africa where several countries have been implementing public procurement reforms.

Natural logarithm transformation for predicting procurement time of PPP projects in Nigeria

AbstractTraditional method of procurement has been in practice over a considerable period and is still the most common type of public infrastructure procurement. The major alternative to it is the ...

Assessment of procurement capacity challenges inhibiting public infrastructure procurement

PurposePublic procurement capacity is composed of three facets: individual, organisational and an enabling national environment which encapsulates national legislation, policies and institutional arrangements that can facilitate or hamper the effectiveness of procurement. The purpose of this paper is to investigate the extent to which procurement capacity challenges in the national environment affect the effectiveness of infrastructure procurement by public agencies in Nigeria.Design/methodology/approachA total of 30 procurement capacity challenges drawn from literature were operationalized in a survey of infrastructure procurement personnel in different tiers of public agencies (i.e. local and state government) in order to ascertain the critical challenges affecting the effectiveness of infrastructure procurement. The survey yielded 288 responses, which were analysed using descriptive statistics, one-sample t-test and independent-samples t-test.FindingsChallenges related to transparency, integrity and accountability are amongst the topmost challenges adversely affecting the effectiveness of public infrastructure procurement. There is limited difference in the extent to which the challenges affect the effectiveness of infrastructure procurement in different tiers of public agencies in Nigeria.Originality/valueWhilst various procurement capacity challenges have been identified in the extent literature, this study has shown that an assessment of their effect on the effectiveness of infrastructure procurement could reveal valuable insights regarding the status of public infrastructure procurement within a country, particularly countries in Sub-Saharan Africa and other developing regions where there is acute infrastructure deficits. Such insights could inform appropriate infrastructure procurement reforms by policy makers, procurement entities and infrastructure funders.

Infrastructure procurement skills gap amongst procurement personnel in Nigeria’s public sector

PurposeProcurement of public infrastructure that is fit for purpose partly depends on the competencies of procurement personnel. In many developing countries in Sub-Saharan Africa, including Nigeria, there is a deficit in the quantity and quality of infrastructure and their procurement is further riddled with deficiencies in the capacity of public procuring entities. The purpose of this study was to ascertain the critical skills development needs of public personnel involved in the procurement of infrastructure in Nigeria.Design/methodology/approachBased on a quantitative research strategy, this study sought to address the knowledge gap through a survey of public infrastructure procurement personnel (n = 288) in different tiers of government (i.e. state and local government) and geopolitical contexts (north and south) in Nigeria.FindingsOf the 45 procurement skill areas operationalised, there is need for further development in 38 of them including: computing/ICT; problem-solving; communication; decision-making; health and safety management; quality management; relationship management; team building; project monitoring and evaluation; time management and procurement planning.Originality/valueA key implication of this study is for policymakers in state and local government to formulate and implement infrastructure procurement capacity development reforms that address the competency gaps of procurement personnel. Such reforms need to take into account the suitable methods for developing procurement competencies. Additionally, the procurement skill areas operationalised in this capacity assessment study could serve as a useful blueprint for studying capacity deficiencies amongst public infrastructure procurement personnel in other developing countries.