Adoption Of Public Private Partnerships Research Articles

Mediating Effect of Delivery Capability on Public-Private Partnership Financing Structure and Geothermal Energy Development Project Completion in Kenya

Investments in Geothermal Energy Development Projects (GEPs) are still considered high-risk and capital-intensive with unpredictable completion even amidst the adoption of Public Private Partnership (PPP) financing models particularly in sub-Saharan Africa (SSA). Numerous GEP completion bottlenecks affecting timely project completion have been documented lately; these challenges have caused delayed delivery of critical path milestones, project stalling, and even outright project failures. Recent empirical studies focused more on developed countries' longitudinal secondary databases covering the wider energy sector, with minimal attention paid to the situation of GEPs in developing countries. Anchored on the positivism and pragmatism foundations, this study examined the mediating influence of delivery capability on the relationship between PPP financing structure and the completion of GEPs in Kenya. Using a census survey design, data from 48 geothermal energy projects (private sector project managers and implementation team leaders from the public sector) and key informants was collected and analyzed using mixed methods. Data triangulation and diagnostic tests were performed. The results and findings revealed that while PPP financing structure alone explains 43.9% of the variance in project completion, the inclusion of delivery capability substantially increases the explained variance to 66.1%. A balanced PPP financing structure and delivery capability have statistically significant effects on project completion outcomes, with delivery capability (β = 0.579) having a stronger isolated effect than the PPP financing structure (β = 0.326). The reduction in the PPP financing structure coefficient from the first to the second model suggests that some of its effect is shared with or mediated by delivery capability. The study concluded that completing PPP-financed GEPs requires an integrated approach that considers both predictor variables: A balanced PPP financing structure comprising private equity, commercial and concessional loans, grants and government contributions; and strong delivery capability including geological, technological, PPP modelling and agile project management competencies. Geothermal sector-specific government support measures and industry recommendations are provided to enhance the completion of PPP-financed geothermal energy development projects mainly in the SSA region.

Determinants of public-private partnership governance structures: evidence from India

ABSTRACT Public-private partnerships (PPPs) represent a continuum of governance structures characterized by wide variability in private sector risk transfer. Despite the widespread adoption of PPPs, few studies examine the reasons for such heterogeneity. We investigate the factors explaining variability across PPP governance structures and their impact on the extent of private sector risk transfer using ordinal logistic regression on a novel dataset of 2330 Indian PPP projects. We find that the risk transfer is mainly driven by economic and fiscal factors, service-specific transaction costs and project-specific factors, while political factors and institutional quality barely influence it.

Examining the Relationship between Risks Associated with Public-Private Partnership Projects in Emerging Markets Using Fuzzy Cognitive Mapping Methodology

Objective: The adoption of Public-Private Partnerships (PPPs) has sparked a surge in research interest in this area in recent years. This study aims to identify and prioritize the risks associated with PPP projects. Methodology: A questionnaire was designed to assess the significance of each of the 35 research variables (risks) derived from the literature in explaining the risks associated with PPP projects. The respondents included experts in risk associated with PPP-based projects in emerging markets, specializing in policy making, production, sales, and export. These experts were considered knowledgeable due to their practical experience in management, expert, academic, and research activities related to risks and emerging projects and markets. Using purposive sampling and following a snowball method, semi-structured in-depth interviews were conducted with 19 experts until theoretical saturation was achieved. Findings: The results were analyzed using the methodology of fuzzy cognitive maps, and the relationships between the research factors were examined. Conclusion: The analysis revealed that financial constraints risk, demand risk, and government support risk are of high importance in the context of PPP projects.

Reviving Public Service Delivery at the Grassroots through Public-Private Partnership in Nigeria’s Fourth Republic

The paper examines the performance of local governments in Nigeria with special reference to their service delivery responsibilities. Local government is described as a veritable instrument of socio-economic development at the grassroots and it was for this purpose that it became constitutionally recognised as a level of government through the 1976 Local Government Reform. However, the capacity of the Nigerian local governments to carry out responsibilities assigned to them has been jaundiced by the unbridled attack on their finances by higher public authorities, particularly state governments. Specifically, local governments’ share of revenue from the federation account and other sources of revenue have regrettably been annexed by the state governments, thereby reducing local authorities to governments on papers only. Using the secondary sources of data, the article examines how local government service delivery responsibilities can be resuscitated through the Public-Private Partnership (PPP) arrangement. The paper revealed general absence of standard framework for the adoption of PPP to tap into the available huge private investment for public service delivery at the grassroots. The paper recommends active collaboration of the stakeholders in grassroots development toward developing a standard framework for PPP to restore the status of Nigerian local governments as primary providers of public services.

UNLOCKING PRIVATE INVESTMENT BY EXPANDING THE SCOPE OF EXISTING TOLL ROAD PPPs AGREEMENTS

Abstract - The inability of governments in many developing countries to provide basic infrastructure has encouraged the adoption of Public Private Partnership (PPP) schemes. However, many developing countries fail to attract sufficient private investment from the PPP market. This paper develops alternative schemes that can minimize the funding gap and promote sustainable infrastructure investment through modified PPP agreements at later stages of the project life cycle by making special tariff adjustments on existing toll roads. To answer research questions, both conceptual model development and empirical analysis are utilized. The study collects both quantitative and qualitative data for analysis and interpretatio. The results indicate that expanding the scope of existing PPP agreements increases the net present value as it allows for larger cash inflows at the start, leading to a faster payback period. Additionally, this scheme reduces the need for cash deficiency support during the initial period of operation. The alternative schemes encourage lower support for government subsidies, offer a reasonable tariff for users, and provide an attractive investment return for private interests.
 Keywords: Public Private Partnership; Concession Agreement; Toll Road; Sustainable Investment, Funding Gap

Public Private Partnerships (PPPs), road tolling and highway infrastructure investment in Zimbabwe

Over the last decade, developing countries have been promoting public-private partnerships (PPPs) as an alternative approach to developing infrastructure and services. This is done by utilising the efficiency and innovation of the private sector and enabling access to private-sector finance through public-private partnerships (PPP). Importantly, PPPs ensure more value for money than traditional financing options and highway and transportation infrastructure revenue sources. The study is qualitative, relied on the extensive review of written documents. In light of this, the study explores the utility and efficacy of PPPs in road tolling initiatives and highway infrastructure investment in Zimbabwe. Emphasis was placed on the PPP arrangement between the Zimbabwe National Roads Administration (ZINARA) and a South African company- Group Five, which saw road tolls being erected and operationalised to fund Zimbabwean highway infrastructure. The paper established that despite this PPP arrangement being a success, as seen by the faster completion of the trunk roads, lower project lifecycle costs, better risk allocation, faster implementation of public works and services, improved service quality and additional revenue streams a myriad of operational and administrative challenges equally dogged it. To this effect, the paper, therefore, recommends some strategies to strengthen and enhance the adoption, operationalization, and management of PPPs for road tolling and highway infrastructure investments in developing countries.

Determinants of the formation process in public-private partnership projects in developing countries: evidence from China

ABSTRACT Public-private partnerships (PPPs) are expected to play a pivotal role in mobilising financial resources for infrastructure. However, the promotion of PPPs has faced challenges to their success in many countries. This study empirically analysed the determinants of initiation and adoption in PPP projects. It employed Tobit regression models with a Chinese provincial-level panel dataset from 2009 to 2019 for evaluating how government, market, and operating environment affect the number and investments in PPP projects. The results unveiled that local governments are motivated by fiscal pressure to initiate PPP projects. They also showed that the successful adoption of PPPs is associated with the activeness of private capital in local markets while neither PPP policy nor PPP fund at provincial level could facilitate the formation of PPPs. This study distinguished the initiation of PPP projects from their adoption, through which the truly key determinants of formatting PPPs were successfully identified.

Evaluating the Impact of Macroeconomic Policy Interventions and Recession on a Sewage Treatment PPP Project Using a System Dynamic Model

The revenue of a public-private partnership (PPP) project is influenced by macroeconomic scenarios such as economic recession and policy adjustments. But these macrofactors and their dynamic relations with microfactors in PPP projects have not been thoroughly understood. In this article, system dynamics (SD) and real option (RO) are integrated to develop a novel model to investigate the impacts of the macro-risk factors on the revenue of PPP projects. Five scenarios were studied through simulation. The results indicate that the loan interest rate and tax rate are negatively correlated to the revenue, while the GDP growth rate and self-owned capital rate are positively correlated. This indicates that the government can stimulate the private sector to invest in PPP projects by providing lower loan interest and increasing the self-owned capital rate. This integrated approach has been proposed for use by decision-makers to evaluate the impact of economics and policies in the future. This study provides a comprehensive review and reliable theoretical analysis regarding the adoption of PPP by China’s local governments, yielding to main policy implications for further promoting the efficiency of PPP development.

Evaluation of Risks Involved in Housing Projects Procured by Public Private Partnership in Kebbi State, Nigeria

Studies have shown that the adoption of Public Private Partnership (PPP) system which is expected to enhance the provision of affordable housing with diverse arrays of benefits, have failed to accomplish this task due to hindrances from several risk factors. The study evaluated the risks involved in housing projects procured by PPP in Kebbi State with a view to providing better housing delivery. Data were collected using questionnaire administered on professionals in 25 construction firms registered with the Kebbi State Ministry of Land, Housing and Urban Planning, and 15 purposively selected occupiers of PPP housing projects. Analysis of data was undertaken with the use of Mean Item Score (MIS) and Relative Importance Index (RII). The study revealed that the most important reason for the adoption of PPP procured housing projects was “Reduction in the size of inefficient bureaucracy” (RII = 0.87); the most critical risk associated with PPP procured housing projects was “Completion Risks” (MIS = 4.12); the factor leading to the success of PPP housing projects with the highest value was “Stable economic system” (MIS = 4.52; average MIS = 3.96), thus implying that the projects were successful; and Occupiers were satisfied with the conditions surrounding the Gesse Phase I and Phase II PPP Housing Estate in Birnin Kebbi, Kebbi State (MIS = 3.68 and 3.60 respectively). It was concluded that the risks involved in PPP housing projects in Kebbi State are fairly critical and can be effectively managed by adopting the drivers of the success of PPP projects and preventing the occurrence of the barriers to the success of PPP projects in Kebbi State, Nigeria. The major recommendation from the study was that the Government should focus more attention on implementing the strategies of “Stable economic system”, and “Avoidance of bribery and corruption among contracting parties”, so as to mitigate the barriers to the success of PPP housing projects in Kebbi State, Nigeria.

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.

Accountability Paradox for the Success of Public Private Partnership (PPP) Projects in developing Countries

PPP projects are now being considered as a financing option for infrastructural development across the globe. The study was guided by accountability theory. The successful adoption of PPP projects in developing countries has been hindered by different poor accountability mechanisms. The main objectives of the study are to examine the relevance of accountability theory in adoption of PPPs and to analyse the issues of accountability for PPP projects in developing countries. Data collected through review of scholarly literature and documents review was analysed using narratives. The Study findings revealed that accountability theory is highly relevant to the adoption of PPP projects and that accountability is very fundamental for effective adoption of PPPs in developing countries. It was concluded that accountability theory should always be put into consideration if PPPs are to succeed. It was recommended that developing countries need to ensure a conducive accountability mechanism for successful adoption of PPPs.

The Growth of China’s Non-governmental Space Sector in the Context of Government Support for Public-Private Partnerships: An Assessment of Major Legal Challenges

The effectiveness of public-private partnerships (PPPs) has been emphasized in Chinese policy-making discourse in recent years, and policies have been introduced to promote the adoption of PPPs. A 2016 White Paper on China’s space activities advocated for policies that encourage ‘social forces’ (including non-governmental space entities) to participate in space development. The White Paper proposed amending the government procurement process of space products and services and facilitating cooperation with the private space sector. Furthermore, ‘satellite internet’ was introduced into the scope of space policy as a new type of infrastructure, providing opportunities to establish PPPs in space programs. Nonetheless, the military-dominated nature of space exploration has resulted in a complicated administration and strict supervision of non-governmental entities in order to develop space activities, including launching satellites. In addition, government-owned enterprises, commonly acknowledged as ‘public’ parties of PPPs, are counted among the ‘social forces’ authorized to act as ‘private’ parties in the Chinese PPP market. Therefore, favorable PPP policies are applied to public entities. This impedes the growth of underdeveloped non-governmental space entities, and as such, this is an issue that needs to be addressed. From a national space legislation perspective, clear and supportive rules for non-governmental space activities administration and permissions of operation should be established. Concerning PPP rules, based on fully considering existing laws, measures ought to be taken to improve the procurement measures of space products and services. Moreover, rules concerning the ‘value for money’ evaluation criteria and other details deserve to be created or improved upon to ensure non-governmental participants benefit in PPP programs conducted with public partners.

Institutional entrepreneurship: collaborative change in a complex Canadian organization

PurposeThis study adopts an institutional entrepreneurship perspective in the context of public–private partnerships (P3s) to highlight the role of social actors in enacting institutional change in a complex organizational setting. By studying the actions of two prominent social actors, the authors argue that successful institutional change is the result of dynamic managerial activity supported by political clout, organizational authority and the social positioning of actors.Design/methodology/approachThe authors conducted a field-based case study in a complex institutional and organizational setting in Alberta, Canada. The authors employed an institutional entrepreneurship perspective to identify and analyze the activities of two allied actors motivated to transform the institutional environment for public infrastructure delivery.FindingsThe empirical study suggests that the implementation of institutional change is both individualistic and collaborative. Moreover, it is grounded in everyday organizational practices and activities and involves a coalition of allies invested in enacting lasting change in organizational practice(s), even when maintaining the status quo seems advantageous.Originality/valueThe authors critique the structural explanations that dominate the literature on public–private partnership implementation, which downplays the role of agency and minimizes its interplay with institutional logics in effecting institutional change. Rather, the authors demonstrate that, given the observed impact of social actors, public–private partnership adoption and implementation can be theorized as a social phenomenon.

Effect of private capital in rival projects on public-private partnership adoption in China

ABSTRACT This study analysed how local governments react to intergovernmental competition for private capital in the public goods market. Using microlevel data for public-private partnership (PPP) projects in China from 2012 to 2018, we found that the more private capital rival cities have attracted, the more likely local governments start to introduce PPP projects, especially those whose future returns are paid by governments. The results are robust to an instrumental variable estimation using the financing demand of rival cities. The effect of rival projects was found to be related to information disclosure, financing facilitation, and governors’ responsibility. The results suggest that local governments tend to promise future obligations for payment to decrease advanced capital expenditures. This study also provides implications for political and economic research by shedding light on local competition in the progress of marketization.

Barriers to PPP Projects in Construction Sector of Pakistan

Public Private Partnership (PPP) is a mechanism adopted to support the development in a country facing financial problems. In achieving successful PPP projects, one of the major criteria is attaining value for money. There are several barriers which can affect adoption of PPP which are essential to uncover for enhancing the adoption level of PPP. Hence, this project has focused on identifying barriers affecting PPP projects of Pakistan. Data collection for this study was done through questionnaire survey among the personnel involved in handling PPP projects. From statistical analysis of collected data it was found that unhealthy bid competition, lack of managerial skills and experience and public sector related problems are major barriers in adoption of value for money in PPP projects of Pakistan.

Factors influencing the adoption of public–private partnership in low-cost housing development in Myanmar

Purpose To provide low-cost housing, the Myanmar Government is attempting to use public–private partnership (PPP) to attract private investors. However, there is little information concerning the influencing factors for implementing PPP low-cost housing projects in Myanmar. This paper, therefore, aims to identify and analyse these factors. Design/methodology/approach A total of 51 in-depth interviews were conducted with interviewees involved in various kinds of housing projects implemented through the adoption of PPP or other approaches. The methods of data collection and the analysis are based on grounded theory (GT) methodology. Findings Using the GT method to analyse the interviews, five categories emerged from 50 influencing factors regarding the establishment and implementation of the PPP model for low-cost housing in Myanmar: provision of incentives; obstacles in implementing PPP for all stakeholders; barriers to private sector participation; public sector responsibilities and challenges; and attraction factors and challenges for financial institutions. Among 12 newly found factors, the three most important for PPP low-cost housing in Myanmar are the availability of project funding, the resolution of land-acquisition issues and the development of a sound financing system. Research limitations/implications Our findings strengthen previous studies by identifying factors affecting PPP low-cost housing either specific to Myanmar or common among other countries. Of the 50 factors identified, 38 factors were found in previous studies, but 12 are likely specific to Myanmar. Practical implications Our findings can be used by governments, particularly the Myanmar Government, and financial agencies to understand the low attractiveness of PPP low-cost housing for investors and to develop/improve policies to stimulate PPP low-cost housing, especially in Myanmar. Originality/value Many previous studies have been undertaken to identify factors that influence the implementation of PPP for low-cost housing. However, to the best of the authors’ knowledge, there are no prior studies specific to Myanmar in this context.

Financial Risk and Adoption of Public-Private Partnerships in Kenyan Public Universities

Employment of public-private partnerships as a way of delivery of public utilities has been on the rise in the recent past. This has been driven by a number of factors, key among them being the ability of the public entity to transfer financial risk to private sector players who are better placed to mitigate such risks. The study purposed to assess the effect of financial risk on adoption of public-private partnerships in Kenyan public universities. The specific study objectives were to evaluate the influence of interest rate variability, revenue streams variability and exchange rate variability on adoption of public-private partnerships. The study employed a descriptive research design while targeting a population of 223 comprising of purposively selected employees from nine public universities. A sample size of 143 was used from whom data was collected using structured questionnaire. Data analysis employed use of both descriptive and inferential statistics. The results obtained show that interest rate variability, revenue stream variability and exchange rate variability have a statistically significant influence on adoption of public-private partnerships. On the basis of the study findings it was concluded that financial risk transfer had a significant positive influence on adoption of public-private partnerships in Kenyan public universities. It is therefore recommended that Kenyan public universities should thoroughly evaluate financial risk involved in any project before entering into public-private partnership arrangement in order to enhance value for money.

Policy and institutional enablers of public–private partnerships in the electricity sector in Uganda: a multi-level and path dependence perspective

PurposeThis paper explains the evident disproportionality in the levels of adoption of the modality of public–private partnerships (PPPs) in Uganda by tracing the peculiar preconditions and enablers of the model's relative high adoption in the electricity sector.Design/methodology/approachKey conceptual suggestions from historical institutionalism (HI), critical juncture and path dependence are used to orient the data collection and analysis. The direct experiences and perceptions of key informants involved in policy, regulation and operations in the electricity sector are thematically analyzed.FindingsThe primacy of specific policy, institutional decisions and actions sequentially undertaken at the international, national and sectorial levels in shaping the conceivability and possibility of PPP modality is foregrounded. In particular, international advisory for the changed role of the state and the government's subsequent decision to enact and reenact specific institutional frameworks at the national and sectorial levels created important disruptions to the status quo and paved a new and relatively stable institutional path conducive for private sector participation.Research limitations/implicationsTheoretically, the paper demonstrates the ability and power of HI to support the exploration and framing of multilevel and path-dependent explanations of institutional development and policy adoption. Practically, suggestions in terms of policy, legal and regulatory enablers for the adoption of PPP are made to shape practitioners' decision-makingPractical implicationsPractically, suggestions in terms of policy, legal and regulatory enablers for the adoption of PPP are made to shape practitioners' decision-making.Originality/valueThe importance of considering factor combinations and sequences in explaining the emergence, adoption and proliferation of public policy instruments and phenomena is underscored. In addition, the discourse on PPPs is moved beyond rationalization on how to even out their adoption (and subsequently the associated benefits) across sectors.

Effective strategies for developing retirement village public – private partnership

Purpose The growth in ageing population globally has led to the increase in demand for retirement or aged care homes. Adopting public–private partnership (PPP) in the global retirement village market has become the new approach to address some of the emerging challenges. This paper aims to explore and analyse the critical success factors (CSFs) for the adoption of PPP in the global retirement village market. Design/methodology/approach An empirical questionnaire survey was conducted with experienced practitioners in the global PPP and retirement village markets. Mean score analysis, normalization range method, Kendall’s coefficient of concordance and factor analysis were used for analysis. Findings Results show that out of the 27 CSFs identified, the most significant ones in developing PPP retirement village projects are “the age-friendly design of villages”, “appropriate location of PPP retirement village”, “reliable and accessible health and physical facilities” and “effective social inclusion and integration in villages”. Further analysis shows that the 27 CSFs can be grouped into 7 major factor groupings, namely, “effective project monitoring”, “financial support”, “social integration”, “effective contractual arrangement between parties”, “government commitment and support”, “sustainable design of village” and “effective payment structure”. Originality/value The outputs of this study will adequately inform retirement village developers, retirement village stakeholders and local government authorities of the best practices they should put in place to ensure the sustainable growth of the global retirement village market.

Determinants of Public-Private Partnership Adoption in Solid Waste Management in Rural China.

Rural solid waste management is a severe challenge in China. The Public-Private Partnership (PPP) is an effective method for rural solid waste management. However, policy efforts aimed at stimulating the adoption of PPP in rural solid waste management have been limited in their success. This study aims to empirically investigate the determinants of rural solid waste management PPP adoption in China. First, this study builds a theoretical model that consists of factors related to the institutional environment and market and proposes theoretical hypotheses. Then, using the balanced provincial panel data of 150 samples from 2015 to 2019, this study applies various count regression models and truncated regression models to empirically test the theoretical hypotheses. The results show that provinces with higher fiscal transparency, financial burdens, and market demand tend to adopt more PPP, while provinces with lower per capita GDP and market openness index ratings have a stronger motivation to initiate more PPP. In contrast, investment institutional environment factors have no impact on PPP adoption. To stimulate the development of PPP in rural solid waste management, this study proposed that a good-governed government and a strong market demand are critical foundations, and also a debt-risk prevention and evaluation system should be established to avoid local debt risks resulting from over-adoption of PPP.