Public-private Partnership Projects Research Articles

Developing a Conceptual Model for Promoting Risk Management for Public–Private Partnerships Projects

Over the past decade, there has been significant growth in the literature addressing risk issues associated with Public–Private Partnerships (PPPs). However, few studies have attempted to comprehensively map and visualize research in this domain. This study aims to fill this gap through a systematic literature review conducted in four stages, utilizing knowledge mapping analysis. More than 400 peer-reviewed articles published between 1990 and September 2023 were examined, making this study the first to analyze such a substantial sample of papers in this field. The research identifies three distinct phases of growth trends in PPP risk management studies. To minimize arbitrariness and subjectivity in analyzing research focuses, this study employed a scientometric approach using VOSviewer software (version 1.6.19), which provides insights into the current state and trends of research on PPP risk management, including high-frequency keywords, contributions of core authors, and distribution across countries, regions, institutions, and journals. In addition to the scientometric analysis, a qualitative review identified six primary research interests, various research perspectives, and diverse methodologies present within the literature. Based on these findings, this study culminates in the development of a conceptual model for risk management in PPPs, offering a structured framework for future research and practical application. This study contributes to the literature by providing the first large-scale, comprehensive mapping and analysis of PPP risk management research, presenting a novel conceptual model that connects theoretical insights with practical implications, and highlighting key areas for future exploration.

Financial risk analysis of Public-Private Partnership (PPP) projects case study on Pandaan - Malang Toll Road

This study aims to analyze the financial risks faced by the Pandaan-Malang Toll Road PPP (Public-Private Partnership) project in Indonesia. Data collection techniques include semi-structured in-depth interviews with parties related to the PPP project, including the Directorate General of Infrastructure Financing, the Tolling Road Management Agency (government), and Business Entities (PT Jasamarga Pandaan Malang). The collected data will be analyzed to determine the financial risk factors faced by PPP projects and the financial controls carried out to overcome financial risks in PPP. The results show that the risk of errors in forecasting in the calculation of demand, cost, and revenue projections is a risk that almost often occurs. The Government emphasizes the importance of optimizing the role of PII (Persero) or Indonesia Infrastructure Guarantee Fund (IIGF) as an Infrastructure Guarantee Business Entity (BUPI) to ensure financial sustainability and minimize the impact of sudden shocks on the State Budget due to the provision of Government Guarantees for cooperation projects. This study provides insights or frameworks that can be applied to similar projects, helping to improve risk assessment and decision-making processes in future infrastructure developments.

Fuzzy financial risk analysis of net-zero transitions in public–private partnership projects in Ghana

Fuzzy financial risk analysis of net-zero transitions in public–private partnership projects in Ghana

The State of Public-Private Partnerships in Times of Global Economic Disruption

Growth in large private business enterprises in the 20th century established an environment that enabled a competitive relationship through Public-Private Partnerships (PPP) with the public sector, which historically suffered from inefficiencies and an over-reliance on projects and services, especially in emerging economies. PPPs can positively impact public safety, quality of life, new economic opportunities, poverty reduction, and benefit from long-term private capital and outside expertise. However, PPP investment is sensitive to critical factors such as: the macroeconomic environment, institutional and regulatory conditions, market size, rule of law, and enforceable contracts, among others. Thus, managing PPP projects is a very complex task, due to its multidisciplinary characteristics and the involvement of multiple stakeholders. In times of global economic disruption, this task becomes even more challenging. This study presents threats and opportunities for the execution of PPPs in times of global crises and their relationship with globalization trends.

PUBLIC-PRIVATE PARTNERSHIPS FOR SUSTAINABLE URBAN DEVELOPMENT: LESSONS FROM INDONESIAN CITIES

Public-private partnerships (PPPs) have become an important strategy in sustainable urban development in Indonesia, especially amidst limited local government resources and challenges posed by rapid urbanization. While the private sector has great potential to provide financing and innovation, the success of PPPs depends largely on effective coordination between the public and private sectors. The dynamics of this relationship often face complex challenges, including equitable management of risks and benefits. This study aims to explore the factors that influence the success of PPPs in the context of sustainable urban development in Indonesia. This study uses a qualitative approach, with data obtained from various relevant previous studies and research. The collected data are systematically processed to find new patterns and insights related to PPPs. The results of this study indicate that strengthening the institutional capacity of local governments and increasing transparency and accountability are key to the success of PPPs. Private sector involvement not only provides financial resources but also brings significant innovation and efficiency. Inclusive collaboration, involving local communities and stakeholders, has proven to be essential to ensure the relevance and sustainability of PPP projects. In addition, supportive and adaptive policies to local conditions are needed to create a conducive environment for these partnerships. With the adoption of a comprehensive strategy, PPP can be an effective tool to achieve sustainable urban development goals in Indonesia.

Information Requirements for Effective Risk and Contract Management in Public-Private Partnerships: A Delphi Approach

Effective risk and contract management are crucial in Public-Private Partnerships (PPPs) and require adequate collection and utilisation of the project and financial information. Although access to sufficient information is indispensable, there is a lack of empirical literature documenting the information requirements in PPPs. This research aims to identify the information items the public party needs for effective risk and contract management in PPP projects undertaken in the construction sector. Information requirements were determined in three steps including (1) a structured literature review to identify the information items from academic studies, (2) identification of the information items currently used in the industry via expert interviews, and (3) validation of the information items via the Delphi Method, which included three rounds of consultations with 12 PPP experts. The findings present 52 qualitative project information requirements under various categories. In addition, 33 quantitative financial items were determined as essential information requirements for effective risk and contract management. The proposed information requirements were utilized to develop a qualitative risk assessment tool for the public party and its consultants to streamline structured data collection, avoid overlooking important project and financial information in risk assessment, and facilitate knowledge management in PPPs. The developed tool was tested by 21 PPP experts and found usable as a customizable knowledge-based system for qualitative risk assessment utilizing extensive project information during early risk assessment, feasibility studies, contract drafting and management in PPPs.

Initial study of the Palu-Parigi By-pass road policy in Central Sulawesi Province, Indonesia

This research aims to do the assessing the feasibility of the Public-Private Partnership project in investing in the construction of the Palu-Parigi By-pass road through a PPP financing scheme, thereby providing opportunities for the private sector to participate in the provision of special road infrastructure. In this context, experimental criteria for determining Value for Money (VFM) are applied using the PPP model, to evaluate projects. The main objective also emphasizes the provision of greater VFM Goods through private financing, through conventional methods that are economical, efficient and effective. Furthermore, financial performance measurement reports apply several methods, including Payback Period (PP), Net Present Value (NPV), and Internal Rate of Return (IRR) which determine the feasibility and time required for returns on invested capital. The previous Economic Feasibility Study of the Palu-Parigi By-pass Road Construction project also showed an EIRR value of 20.1% in 2014, illustrating the economic development of this work. In connection with the limitations currently faced by the Regional Budget Agency of Central Sulawesi Province, the next PPP scheme is recommended for road construction by prioritizing infrastructure completion after the 28 September 2018 earthquake and the COVID-19 pandemic. The DBFMT (Design–Build–Finance–Maintenance–Transfer) model was also applied to the project, with GCA responsible for design, construction, financing, periodic maintenance and transfer at the end of the collaboration agreement.

An environmentally-friendly optimization framework for road pricing and pavement management under public-private-partnership

Vehicular emissions and the unsustainable development of transportation systems have received increasing attention in recent years. On one hand, transportation emissions increase as car ownership increases. On the other hand, construction of the new transportation infrastructure and maintenance of the existing transportation facilities are needed as travel demand increases. Thus there is a growing market for Public-Private Partnership (PPP), which aims to overcome existing deficiencies of traditional approaches while stimulating the sustainable development of transportation systems. This paper proposes an environmentally-friendly multi-objective optimization framework to derive dynamic toll pricing strategies and pavement maintenance and rehabilitation (M&R) activities for road networks containing PPP projects. A case study of a road network containing toll and toll-free highways in Florida, United States is used to verify the performance of the proposed approach. The results show that the public and private sectors could coordinate their actions to guarantee profits for the private sector while alleviating negative externalities for society.

Institutional Environment, Institutional Arrangements, and Risk Identification and Allocation in Public–Private Partnerships: A Multilevel Model Analysis Based on Data from 31 Provinces in China

As an important part of market-based reforms, the issue of “risk” has always been a part of the public–private partnership (PPP) debate, and the way in which risks are managed determines the sustainability of market-based reforms. This study systematically examines how the institutional environment and institutional arrangements affect the effectiveness of PPP risk identification and allocation. The study aims to establish a multi-source database of all publicized PPP projects in 31 provinces during the period of 2017–2021 in China, and it incorporates different levels of influencing factors, such as the institutional environment and institutional arrangements, into a framework. Through the application of a multilevel model, the impact of the political–institutional structure at the provincial level and institutional arrangements at the social capital and project levels on PPP risk identification and allocation is judged hierarchically. It is found that only social capital at the institutional environment level can directly and positively contribute to the effective identification and allocation of PPP risks, while both the degree of potential market competition and the degree of integration at the project level have a positive effect on its risk profile. In addition, there are cross-level moderating effects, with social capital, government transparency, and government–business relations positively improving risk allocation and identification through the degree of market competition, with no significant coordinating effect on the degree of contractual integration. This study goes beyond the existing one-dimensional risk profile analysis and risk typology to dismantle the “black box” of risk identification and allocation, which is a process of continuous negotiation, and to provide a sustainable governance mechanism for the market-oriented reform of public services in the institutional arena.

Analyzing Trends and Emerging Issues in Public-Private Partnership (PPP) Projects in Construction: A Bibliometric Study

Analyzing Trends and Emerging Issues in Public-Private Partnership (PPP) Projects in Construction: A Bibliometric Study

Critical Success Factors of Public-Private Partnership (PPP) Implementation: A Study in Bangladesh

This study aims to discover the perceptions of the critical success factors (CSFs) of the public and private sectors’ players that influence the implementation of public-private partnership (PPP) infrastructure projects in Bangladesh. Methods: A questionnaire survey was adopted to discover public and private sector players’ perceptions of the CSFs and success subfactors (SSF) of PPP projects. Based on the literature review, CSFs and SSFs were identified, and the agreement between respondents from the public and private sectors was tested. A total of 59 responses were collected and examined to reveal the perceived gaps between sectors and rank CSFs and SSFs. The Statistical Package for the Social Sciences (SPSS) software was used. The results show that the top-ranking factor was “economic viability”, followed by “appropriate risk allocation”, “sound financial packages”, “favorable investment environment”, and “reliable concessionaire”. It was also found that the perceptions of the public and private sectors were mixed. The key conclusion of this study is that the identified factors must be effectively addressed in order to develop consensus and engage relevant stakeholders in Bangladesh.

Regional differences and dynamic evolution in the resilience of public-private partnership projects: Evidence from the China

In the context of high-quality development and in the face of uncertainties and risks from economic, social and political sources, we aim to understand the resilience of public-private partnership projects in megaprojects, and to improve their ability to effectively manage adversity and optimize resource allocation. And by utilizing these insights and adopting proactive strategies, we enable stakeholders to navigate uncertainty more effectively and contribute effectively to high-quality development. Based on 2005–2020 provincial panel data in China, we explore the regional differences, dynamic evolution and convergence in the resilience of public-private partnership projects using an integrated approach combining entropy weight method, Dagum Gini coefficient, kernel density estimation and spatial econometric modeling. The results of the study show that: The resilience of public-private partnership projects in the nationwide and in East, Central, West and Northeast is steadily increasing, with higher in the East and weaker in the West; The differences between the four regions show a gradual widening trend, but decrease towards the end of the study period, and was accompanied by trailing and polarization across the country and the regions; There is absolute β convergence in the resilience of public-private partnership projects across the country and in the four regions.

Determinants for the desirability of public-private partnership mode in infrastructure development

PurposeThis paper studies the determinants for the desirability of the public-private partnership (PPP) mode in infrastructure development.Design/methodology/approachThe author manually collects data on over 12,000 PPP projects in China, and regard the successful transition and abnormal termination as signals for the mode’s desirability and undesirability, respectively. Then, guided by relevant theories in the literature, the author investigates the impact of various project characteristics on the projects’ successful transition and abnormal termination.FindingsFirst, execution-stage projects in industries where government support is indispensable, or where quality improvement is more important than cost reduction, face higher likelihood of abnormal termination. But such negative effects are mitigated if state-owned enterprises (SOEs) participate in the social party. Second, the structure of social party matters. The participation by private firms in the social party increases the termination likelihood, while the decentralization of the social party decreases it. Third, pre-execution projects with government payment or subsidies are more likely to enter into the execution stage.Practical implicationsRegulations on participation by SOEs in PPPs, such as policy [2023 No. 115] announced by State Council, should take industrial heterogeneity into consideration.Originality/valueUsing a large sample, the author empirically tests the seminal PPP-related theories in the literature. The author also uncovers some unique stylized facts about PPPs in China, especially the impact of SOE participation in the social party on PPP survival.

Exploring Briefing Processes across Mature Markets of Public–Private Partnership (PPP) Projects: Comparative Insights and Important Considerations

The primary objective of this research paper is to conduct a comprehensive investigation into the process of developing briefs for Public–Private Partnership (PPP) projects. The study aims to outline the fundamental stages, standard processes, and critical decision points involved in this process. This is achieved through a comparative analysis of briefing frameworks used in three countries that are among the top in the PPP Market Maturity chart: The United Kingdom, Australia, and Canada. The paper discusses the stages and decision points within these countries’ briefing processes, highlighting their challenges, similarities, and differences. It emphasizes the fundamental role of effective communication and coordination in PPP projects, which involve multiple stakeholders. By examining these interconnected activities and analyzing the phases, stages, and key processes constituting the briefing process, the study provides valuable insights into the PPP briefing processes in these nations. The paper concludes by proposing a conceptual process framework for brief development in PPP projects, which will be further tailored for adaptation in the PPP market in the United Arab Emirates.

Critical Success Factors for Public-Private Partnerships in the Development of Mega Power Generation Infrastructures in Sri Lanka

Ceylon Electricity Board (CEB) seeks alternative financing through Public Private Partnerships (PPP) due to non-cost-reflective tariff losses and debt overhang, relying on maturity in critical success factors. Thus, the research examines the success factors of Public Private Partnerships in developing power generation infrastructures in Sri Lanka, using quantitative data from a questionnaire distributed to stakeholders in CEB. The data analysis tools of descriptive and inferential statistics were used to analyze the collected data. The economic viability of the project, credibility of government policies, legal and regulatory framework, equitable risk allocation, transparent and efficient procurement process, financial market, a strong and good private consortium, and political stability, were found as the main CSFs for the development of mega power plants. The study was concentrated on the public agency of CEB, for generalization investigation to be extended to private investors, practitioners, and policymakers in the power sector. Further, a comprehensive study on the exploration of CSF to attract private investors to PPP for the development of mega power plants in Sri Lanka would be most beneficial to the industry. The framework developed in this research would be the benchmark for identifying critical success factors for improvement in PPP projects in Sri Lanka.

Mitigating Financial Risks in Sustainable Public–Private Partnership Infrastructure Projects: A Quantitative Analysis

Economic recession from the coronavirus outbreak continues to have negative rippling effects on local and international financial investments in public–private partnership (PPP) projects in Ghana, a developing country. Together with poor reports on operating cash-inflows for PPP projects such as those covering schools, hospitals, railways, fishing harbors, cocoa warehouses, recreational parks and affordable housing, there is an urgent need to develop and institutionalise sustainable and robust financial risk management measures. These measures are meant to mitigate financial losses, promote sustainability practices and prolong the longevity of infrastructure developments within PPP pacts. Therefore, this study aims to assess the mitigation measures of PPP infrastructure management in Ghana. Primary data from survey questionnaires were utilised in this study, with the data obtained from PPP practitioners and experts. Data were grouped into project type, sectors and practitioners of PPP projects to aid the analysis using tools such as the Kruskal–Wallis test, the Mann–Whitney U test and factor analysis. The results demonstrate sustainable and green finance, the innovative skills and competencies of project teams, green financial risk models and inclusive cost reduction strategies as crucial to minimising financial risks in PPP project delivery. These findings have significant implications for PPP practitioners and researchers in Ghana and similar developing countries to understand and develop measures to respond to financial risks for sustainable PPP project development and future research studies.

Public-Private Partnership Pembangunan Infrastruktur: Dilema Etik dan Praktik

Over the past decade, Public-Private Partnership (PPP) has emerged as an alternative scheme for financing government infrastructure development. This scheme addresses the fiscal limitations that constrain infrastructure development funding. However, implementing PPP contracts and collaborating with the private sector continue to generate controversy, particularly regarding public concerns about privatization and misconceptions surrounding the scheme’s use. This article analyzes the challenges of PPP implementation from philosophical perspectives to understand how the government and private sector can effectively cooperate within the PPP framework. Using Popper’s falsification approach, the article argues that the PPP scheme cannot be universally applied to all projects as widely explained in most feasibility studies and cost-benefit analysis. The stakeholders involved in PPP projects operate within different dimensions of ontology and axiology. Therefore, this article examines the ethical framework necessary for the specific application of PPP schemes, tailored to the unique characteristics and principles of different projects and sectors.

A critical analysis of public private partnership model in energy from waste projects

The Public Private Partnerships (PPP) and the Private Finance Initiative (PFI) have been significantly adopted over the last three decades as a mechanism for the delivery and financing of projects. Various infrastructure project types in the energy and the transport sectors have adopted this procurement system for their ‘anticipated’ effectiveness in risk distribution and value for money. Yet, their acclaimed benefits, particularly in ensuring value for money in the waste to energy – or energy-from-wastes (EfW) – sector are under significant scrutiny. Governments and investors are increasingly questioning their fiscal efficiency and overall benefit to taxpayers. Despite these concerns, studies investigating whether PFI provides value of money of PFI in EfW are lacking. This study addresses this gap by comparing the PFI models used in the UK and Canada in currently operative EfW projects using mixed risk epistemology approach combining methods that provide both a real and objective evaluation of issues and risks and a subjective (or opinion-based) evaluation. The former is achieved through a quantitative probabilistic model for simulating EfW feasibility at the operation phase. The quantitative probabilistic model is capable to model and capture how operational phase costs and profitability are affected by lifecycle risks (such as quality of service driven by contractual requirements that are usually passed on to the Operation and Maintenance (O&M) contractor) and a range of technical, payment and incentive dynamic variables and their fluctuations. If the impact of these variables is not considered and modelled accurately, the O&M contractor could incur significant losses undermining the viability of the EfW project. The latter employs a psychometric methodology to delve into the primary concerns of professionals involved in EfW projects regarding associated risks. The results show that common O&M risks identified in EfW PPP projects in UK and Canada prevail around unplanned maintenance, infeed waste reduction, market price, unsustainable debts, and policy changes.

Enhancing Performance of Public-Private Partnership Projects: Data Management and Capacity Building of Standard Gauge Railway

This study assessed the impact of data management and capacity building on the performance of the Standard Gauge Railway (SGR) project in Kenya, specifically within the context of monitoring and evaluation (M&E) practices in public-private partnership (PPP) frameworks. Anchored in the tenets of the Principal-Agent Theory, Institutional Theory, and Transaction Cost Economics Theory, this research employs a survey-based approach, drawing insights from 55 SGR project employees. In exploring the influence of data management, the findings illuminate its significant correlation with the orchestration and advancement of the SGR project. Additionally, the study underscores the positive repercussions of capacity-building initiatives on enhancing the project’s performance metrics. Notably, participants exhibited a consensus regarding the efficacy of these programs in augmenting the skills and knowledge base of the project team and stakeholders. The study accentuates the imperative for a comprehensive review aimed at fortifying the accuracy and security of project data. It recommends a strategic emphasis on initiatives enhancing data reliability and security within the SGR project’s framework. These insights contribute crucial perspectives on the pivotal roles of data management and capacity building, specifically underscoring their influence on the SGR project in Kenya.

Оценка рисков и механизмы их минимизации в проектах государственно-частного партнерства

в статье освещается комплексная проблематика классификации и управления рисками в проектах государственно-частного партнерства (ГЧП). На основе анализа существующих теоретических и прикладных подходов, предложенных как отечественными, так и зарубежными исследователями, рассматриваются различные виды рисков, включая форс-мажор, финансовые, юридические, экологические и другие. Особое внимание уделяется изучению средневзвешенной стоимости капитала (WACC) как ключевого фактора в оценке и управлении финансовыми рисками проектов ГЧП. Предлагается собственная матрица для систематизации рисков и оценки их вероятности, что может служить основой для рационального распределения рисков между участниками проекта. Акцентируется важность тщательной подготовки юридической документации для эффективного управления рисками. Результаты исследования подчеркивают необходимость продолжения работ в данной области для разработки более эффективных методов управления рисками в проектах ГЧП. Сделан вывод о том, что в контексте экономических взаимоотношений, анализирование, оценивание и стратегическое управление рисками приобретают ключевое значение с обеих точек зрения: теоретической и практической. Риски, которые возникают в сфере коммерческой деятельности, проникают во все аспекты бизнес-операций, оказывая влияние, в числе прочего, на процесс оценки новых инвестиционных предложений и определение рыночной стоимости предприятий, играя решающую роль в установлении процентной ставки для дисконтирования. the article highlights the complex issues of classification and risk management in public-private partnership (PPP) projects. Based on an analysis of existing theoretical and applied approaches proposed by both domestic and foreign researchers, various types of risks are considered, including force majeure, financial, legal, environmental and others. Particular attention is paid to the study of the weighted average cost of capital (WACC) as a key factor in assessing and managing the financial risks of PPP projects. A proprietary matrix is proposed for systematizing risks and assessing their likelihood, which can serve as the basis for rational distribution of risks between project participants. The importance of careful preparation of legal documentation for effective risk management is emphasized. The results of the study highlight the need for continued work in this area to develop more effective risk management methods in PPP projects. It is concluded that in the context of economic relations, analysis, assessment and strategic risk management acquire key importance from both points of view: theoretical and practical. The risks that arise in business activities permeate all aspects of business operations, influencing, among other things, the process of evaluating new investment proposals and determining the market value of enterprises, playing a decisive role in setting the discount rate.