Public Infrastructure Projects Research Articles

Study of bidder selection criteria in various contract modes of road projects

The selection criteria for outsourcing to execute any specialized work through tenders/bids by any executing agency have been used for the development of public infrastructure projects. The procurement procedures for road development throughout India for public infrastructure and selection were performed by the Lowest-Cost Bidder (LCB). The cost factor is a popularly used bidder selection method, in which the one who quotes the least cost will obtain the project. Various studies have been conducted to determine the causes of failure, delay, substandard work, poor quality, etc., on the performance of selected lowest-bidder-executed projects. To enhance the existing bidding selection procedure and eliminate the causes of failure caused by the existing bid selection procedures, a revised and improved procurement procedure known as Quality and Cost-Based Selection (QCBS) is currently being adopted. This study analyzes the bid selection procedure under various contract modes to reduce the risk of failure and improve the work quality of the road infrastructure in India. New guidelines in public procurement process over existing rules and procedures are emphasized by the Government of India by involving stakeholders, regulating authority, financing institutions, Ministry and Departments considering work quality.

A Dysfunctional Legal Framework for Failed Public–Private Partnership Projects: Accounting or Economics?

Public–private partnerships (PPP) are complex long-term arrangements used in public infrastructure, public services or public facilities projects. To ensure that PPPs transfer enough risk to the private sector, European directives first and member states’ national legal frameworks later have modified how these projects are treated in the event of early termination. This paper aims to analyze said changes to determine if they well serve the public interest. The analysis is done by mapping the different alternatives a granting authority has when confronted with a PPP early termination, as stated by the law. We illustrate our analysis with a case study: The Móstoles-Navalcarnero railway, a Spanish PPP project that came to early termination during the construction stage. For this project, we determine the options available to the granting authority with the old Spanish legal framework (in force at the time the project was awarded) and with the new Spanish legal framework.

Commentary] #CapTheCrossBronx: Grassroots Advocacy & Public Health Research to Secure Federal Funding for Reimagining the Cross Bronx Expressway (Policy & Practice Commentary)

The Cross Bronx Expressway is perhaps one of the greatest threats to the health of Bronx residents today. It is a major source of air pollution, noise pollution, and economic malaise. These threats can be mitigated with deck parks over the expressway. While deck parks are not a new idea, it was not until there was hard data on the damage that the expressway was doing to the health and economic well-being of local residents that policymakers had a reason to listen. The Cross Bronx Expressway presents a rare example of clear-cut translation of quantitative research into social policy. In this commentary, we discuss how a study on the cost-effectiveness of placing deck parks on a freeway translated into a grass-roots campaign to secure federal funding for a major public health infrastructure project.

Corruption and airport efficiency: A study on Asian airports

This paper evaluates the relationship between corruption and operational efficiency of airports in Asia, by analyzing a panel dataset of 26 Asian airports over the 2003–2019 period. Our estimation results for Asia confirm the findings for other regions that there exists a negative association between the operational efficiencies of airports and the corruption level in the country. Airports owned, operated and/or managed by government corporations (100% government) are the most affected, in that they experience significant loss of efficiency when located in a high corruption country. The residual variable factor productivity (RVFP) from the Air Transport Research Society (ATRS) airport benchmarking reports is used as measure of airport operational efficiency. Regression analyses are applied to evaluate the relationship between airport efficiency and corruption. The results are robust to alternative corruption indexes. The findings of this paper have important policy implications for the management of large public infrastructure projects and airport governance reforms in Asia.

Debt-Driven Property Boom, Land-Based Financing and Trends of Housing Financialization: Evidence from China

To cope with the global financial crisis, China’s governments issued huge amount of debt to support public infrastructure projects. These financing mechanisms brought about rapid economic restoration, as well as large amounts of debt accumulation. Among other outcomes of this were increasing the leverage in property markets and advancing the extent of financialization in China’s local economy. Financialization level measures the proportion of the total volume of financing provided by the financial system to the real economy, which covers all the generated debts connecting within real economy and financial system. In this study, we outline the mechanism of housing-centered debt expansion process, land-based financing for local governments and trends of housing financialization in local China. Most importantly, the functions of land in such mechanism is highly emphasized. We run fixed-effect and random-effect models to testify the correlation between the kernel variables—financialization level and real estate investment and public infrastructure. To lower the endogenous problems in the estimation, we use instrumental variables (IV) methods and estimate by the two-stage OLS (2SLS) method. The results show that 1% increase (or decrease) of financialization level (measured by the indicator of Aggregate Financing to Real Economy as percentage of GDP) brings about a significant increase (or decrease) of 48% of real estate investment and 59% of public infrastructure investment nationally. Based on the results, we deduce an overview of debt-driven mechanism in China’s local economy named dual financing circulation, which contains two parallel financing circuits, governmental financing based on lands as collateral and market financing based on properties. Finally, the study reveals some new trends of financialization in property markets. Therefore, the major originality of paper is theoretically combining the governmental and private financing circuits as a whole framework for better understanding the financialized local economy of China and putting forward some policy implementations, such as reducing and setting ceilings on leverage of real estate developers in China.

Criticality analysis of financial risks of public-private partnership projects in a Sub-Saharan African country

Integrating sustainable and complex financial performance models into Public-Private Partnership (PPP) project management is a challenging task due to the sheer number of inherent financial risks. Financial risk is a key impediment in the development of public infrastructure projects in Ghana. Studies on PPP projects in the country have concentrated on critical success factors and stakeholder management with little in-depth assessment of financial risks. This study develops and analyses the key financial risks of PPP infrastructure projects in Ghana. The research methodology is set as follows. First, the identification of twenty-eight financial risks in institutional and project reports, and peer-reviewed articles. Second, collection of primary data via surveys from 126 PPP experts (academics, risk managers and project managers). Third, the development and testing of a novel quantitative model on the criticality of financial risks of PPP projects. The findings show high interest charges, excessive operating expenses, and huge construction material costs as some of the critical financial risks that must be tackled immediately in the country. The outcomes of this study broaden the understanding of financial risks of PPP projects, and it sets the stage for further research.

The Impact of Boundary Spanning by Public Managers on Collaboration and Infrastructure Project Performance

The public sector is increasingly collaborating with the private sector in the development of large-scale public infrastructure projects. However, the difficulties arising due to working across organizational boundaries are often detrimental to project performance. This article argues that boundary-spanning activities can enhance the quality of collaboration and subsequently the performance of projects. Boundary spanners utilize relational governance mechanisms and undertake conscious endeavors for building interorganizational relationships by engaging in activities, such as coordination and communication with the stakeholders. The data for this study are composed of 158 survey responses from lead public managers involved in Dutch national public infrastructure projects. The data are analyzed using structural equation modeling. The study demonstrates that the quality of collaboration has a significant impact on the performance of the project during the implementation phase. Further, we find that the different boundary-spanning activities are interconnected and that they have a significant positive relationship on project performance, with a mediating effect of collaboration. The study concludes that, and shows how boundary spanners are vital to the collaborative processes through which public infrastructure projects are implemented.

Investigating cooperative strategies in low-carbon public–private partnership projects through evolutionary game

PurposePromoting low-carbon in the construction industry is important for achieving the overall low-carbon goals. Public–private partnership is very popular in public infrastructure projects. However, different perceptions of low-carbon and behaviors of public and private sectors can hinder the realization of low-carbon in these projects. In order to analyze the willingness of each stakeholder to cooperate towards low-carbon goals, an evolutionary game model is constructed.Design/methodology/approachAn evolutionary game model that considers the opportunistic behavior of the participants is developed. The evolutionary stable strategies (ESSs) under different scenarios are examined, and the factors that influence the willingness to cooperate between the government and private investors are investigated.FindingsThe results illustrate that a well-designed system of profit distribution and subsidies can enhance collaboration. Excessive subsidies have negative impact on cooperation between the two sides, because these two sides can weaken income distribution and lead to the free-riding behavior of the government. Under the situation of two ESSs, there is also an optimal revenue distribution coefficient that maximizes the probability of cooperation. With the introduction of supervision and punishment mechanism, the opportunistic behavior of private investors is effectively constrained.Originality/valueAn evolutionary game model is developed to explore the cooperation between the public sector and the private sector in the field of low-carbon construction. Based on the analysis of the model, this paper summarizes the conditions and strategies that can enable the two sectors to cooperate.

Actuarial Credibility Approach in Adjusting Initial Cost Estimates of Transport Infrastructure Projects

This paper presents a novel methodology based on the modified actuarial credibility approach. It allows for the adjustment of initial cost estimates of public infrastructure projects by accounting for the additional risk/uncertainty factor. Hence, it offers an interesting alternative to other existing forecasting methods. We test our approach by applying data for over 300 major infrastructure projects implemented in Poland between 2004 and 2020. We prove that, despite its simplicity, the actuarial credibility approach can deliver accurate cost estimates compared to more complex methods such as regression analysis (OLS) or machine learning (LASSO). In particular, we show that, although the forecasting accuracy varies among different project categories, actuarial credibility outperforms other forecasting approaches in the majority of cases. As a result, we argue that actuarial credibility should be considered as a relatively simple tool with very modest data requirements that can be easily applied by investors and policy makers in order to improve project planning and avoid cost overruns.

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.

Limited Diversity in risk treatment selection in public infrastructure projects

In public infrastructure projects, risks can emerge quickly due to its external uncertainties and interdependencies among a large number of stakeholders. Scholars still debate whether the current approach of risk management is dynamic enough to safeguard project objectives in such public environments. Because of little empirical evidence that explains how and why Project Management Teams (PMTs) select a specific risk treatment, we aim to characterize risk treatment selection by PMTs in public infrastructure projects. Based on document reviews and semi-structured interviews with PMT members and their executives of a Dutch project-oriented public infrastructure agency, it was found that the diversity in risk treatment selection is limited and risk treatment in public infrastructure projects focuses on controlling risk predominantly through preventive control measures. Although PMTs also intentionally control risk through preventive measures, the decision to do so is often implicitly taken and constitutes an unwitting routine that PMTs seem to have developed due to a risk-averse organizational culture. We conclude with providing directions to improve risk management practices and enable more diversity in risk treatment selection by PMTs in public infrastructure projects.

Aligning actors in a road renovation project by a co-design process: the road to circularity?

In a circular economy, the aim is to close material loops that retain the highest utility, quality, and value of products, components, and materials. The environmental impact of the material used in constructing, maintaining, and renovating roads is severe. Within the European H2020 project CityLoops, the municipality of Apeldoorn prepares a circular road renovation project, yet wonders: how to align the actors in public infrastructural projects to come to a circular and, at the same time, executable project? A literature study and experiment were conducted. The experiment consisted of a co-design process aiming for the renovation of a residential road constructed in the late seventies. When conducting road renovation, multiple departments within the municipal organization and different external organizations need to collaborate. To them, circular material usage was introduced as a new specific sustainable objective, while traditional constraints, like time and costs, remained. It was visualized in a process journey, showing who is expected to meet which collaborative milestones and when. The insights from this experiment might help other municipalities, principals, and contractors to come to circular design processes in the road construction industry.

Risk Identification, Assessment, and Allocation in PPP Projects: A Systematic Review

Public private partnerships (PPPs) have gained widespread adoption as an innovative way of procuring public infrastructure projects over the last two decades. Risk identification, assessment, and allocation have received considerable attention from researchers due to the risk heavy nature of PPP projects. Adoption of PPPs has triggered a sudden increase in research interest in the area in recent years. This study attempts to provide an updated systematic review of literature related to risks in PPPs using a PRISMA flowchart. The results of the study offer some valuable insights into the future and current state of research. The study found that the focus of research on PPPs has shifted from an overall risk identification and assessment approach to individual risk analysis. Moreover, this research trend is on the rise in developing countries, and that quantitative methods for risk management in PPP research and qualitative methods in practice are preferred. In developed economies, due to negative public sentiments, transparency concerns, and arguments of value for money not being achieved, PPPs are becoming less popular. For these reasons a shift to availability-based payment mechanisms such as in Design-Build-Finance-Maintain (DBFM) from traditional revenue-based mechanisms as in Build-Operate-Transfer (BOT) has been observed. These shifts in research trends and practice offer researchers future opportunities to investigate these relatively newer approaches.

Local economic impacts of legislative malapportionment

Malapportionment is a common and persistent feature of electoral systems in many countries. In Japan, an electoral reform largely equalized the geographical distribution of representation for the 1996 Lower House election, weakening the bargaining position of delegates from historically over-represented regions. We document that central government transfers declined more in over-represented municipalities after the reapportionment, relative to under-represented municipalities, but interestingly, we do not detect significant job losses in over-represented municipalities. The results from the disaggregated industry-level data show that over-represented municipalities lost jobs in the construction sector, which is dependent on public infrastructure projects, while experiencing an offsetting gain in employment in the wholesale and retail sector and, to a smaller extent, the manufacturing sector, which exhibited relatively high productivity growth at the time.

OCCURRENCE AND IMPACT ANALYSIS FOR TIME-RELATED RISKS IN MALAYSIA PUBLIC INFRASTRUCTURE PROJECTS

The public works sector in Malaysia has generally executed construction projects that are highly complex, requiring multiple components and involving a large scale of resources and management. Many construction works are carried out in rural settings with challenges and constraints in terms of site access, transportation and material availability. Hence, the problem of timely delivery of projects persists. It is critical to identify and manage schedule-related risks rigorously to ensure a successful and timely project delivery which is a precursor for the nation’s sustainable development. This study, part of efforts to set up a Malaysia-based risk registry, involves the identification of key risks related to scheduling in Malaysia’s public works infrastructure projects and the analysis of their occurrences and impacts. A total of 111 of 123 projects from the Sarawak state’s Public Works Department are studied via the case study method. The selection of projects was based on whether a project’s completion date was extended due to the occurrences of delay events. The number of occurrences is calculated based on the number of times a delay event occurred in the 111 projects. The impact analysis is carried out based on the total delay over the overall project delay for a project. The findings show that the most frequently occurring risk in the 111 projects is “exceptionally inclement weather”, “whereas risks related to land blockage”, “obstructions by others and approval from other authorities” are risks that caused high severity in terms of delay in schedule. Information obtained from this research is part of key effort for risk data and knowledge retention and dissemination which can be used for further risk analysis for future construction projects.

A Sustainability Perspective Analysis of the Donggi-Senoro Gas Refinery Development

Mining and the production of oil and gas are two industries that contribute significantly to development. The impact of the Donggi-Senoro gas refinery development in Banggai Regency, Central Sulawesi on sustainability was assessed using a qualitative research framework. Data were gathered through direct interviews and field observations, which were supplemented by secondary data in the form of regional planning and evaluation documents. According to the findings, the oil and gas industry contributed significantly to regional income growth and economic development in Banggai Regency. The oil and gas industry’s growing contribution to regional spending is expected to support macro development in Banggai Regency, particularly community-oriented economic development, despite its low proportion in comparison to the agricultural and plantation sectors, as well as the marine sector. Since 2015, this multilevel partnership has been at the forefront of building public facilities, infrastructure, and social projects as a form of corporate social responsibility (CSR). However, the study concluded that pursuing long-term gains is hampered in general. The construction of Donggi-Senoro has benefited only a few members of the community. The ‘trickle-down effect’ was stifled due to a lack of long-term CSR monitoring and the Local Government’s political commitment to forming an integral and long-term public-private partnership. Capacity building, a regional economic development roadmap based on an impact analysis, and a CSR-based empowerment program were among the recommendations made in this study.
 Keywords: development, sustainability, public-private-partnership

Decision-making Process in Infrastructure Projects and Losses due to Delayed Decision-making in Public Sector Projects of Pakistan

In recent years, the subject of decision-making in public infrastructure projects has become an important topic not only in project management but also in programme and portfolio management literature. Today, interdisciplinary projects are becoming a key focus in the collection, design and execution of government-sponsored programmes. With the various underlying risks and uncertainties, developed countries greatly depend on strategic planning regarding decision-making in infrastructure projects, whereas, in developing countries, the public sector programmes and projects are greatly affected by the lack of standardised and robust decision-making. This is primarily due to the lack of expertise to deal with the increasing complexity of the projects. This article aims at analysing the decision-making process in infrastructure development programmes/projects and discusses the factors affecting the decision-making process and thereby statistically chalking out the key losses caused by the delay in decision-making process in the public sector infrastructure projects of Pakistan. The findings will contribute towards understanding the criticality of decision-making process and mitigating the delay factors by encouraging to introduce standardisation in decision-making processes in the public sector. JEL Classification: C51, D7, D91, L74, O18

Solving the Negative Earnings Dilemma of Multistage Bidding in Public Construction and Infrastructure Projects: A Game Theory–Based Approach

AbstractWith the tremendous increase in spending on public projects, contractors need to employ efficient and effective bidding strategies to cope with the competitive bidding environment. Usually,...

Sustainable project risk and stakeholder management for pension funds projects performance in Kenya

This paper aims to evaluate the sustainable project risk and stakeholder management for pension funds projects’ performance in Kenya. This paper highlights that current project management practices of Kenyan Pension Funds do not always ensure project success that secures desired market returns on these investments. The main problem with projects management practices being mentioned as planning, project implementation, cost and time overruns and quality achievement. As the pension schemes are also expected to continue to invest in alternative assets given the broadening of the allowable investment categories and to take advantage of the public infrastructural projects under the big four agenda (RBA, 2021), it becomes paramount to identify and implement sustainable project management practices for performance of the pension funds projects. The outcome of this paper showed that integration of risk management and stakeholder management practice was one of the key project management practices that would contribute towards pension funds projects' performance.

Analysing outsourced and insourced public infrastructure projects’ performance in a provincial department of public works: a grounded theory approach

PurposeAn increase in outsourcing of consultancy services has been observed during procurement and delivery of public-sector infrastructure projects. However, the incidence of project failure has continued unabated despite this shift by public-sector entities. Also, there appears to be limited literature focussed on seeking to provide the rationale governing the decision to outsource or insource consultancy services by public-sector organisations. The purpose of this study was to appraise the performance of public-sector projects in which consultancy services have been outsourced or insourced. These are the gaps which this study was undertaken to fill.Design/methodology/approachA grounded theory methodology (GTM) research design was adopted based on the nature of evidence sought and gathered from a Provincial Department of Public Works and Infrastructure (PDPWI) in South Africa. Data was obtained from a mixture of semi-structured interviews and project-specific documents spanning a five-year period and was analysed according to the procedures associated with GTM. Accordingly, open coding, axial coding and pattern matching were carried out at several intervals to develop categories and themes.FindingsThe findings of the study showed the absence of a structured approach within the PDPWI for facilitating decisions pertaining to outsourcing or insourcing consultancy services within construction projects. Furthermore, the study established that both approaches yielded similar results across all performance facets of cost, time and quality. In addition, a detailed insight into the steps required for the successful application of GTM in built environment research has been provided in the study.Originality/valueLimited studies have been undertaken to compare the impact of either outsourced or insourced services on the organisational and project performance. This was the gap to which the study reported in this paper was undertaken to contribute.