Transportation Public-private Partnerships Research Articles

Case Studies in Transport Public–Private Partnerships

Case research, the preferred research tool for public–private partnerships (PPP), is performed within a specific context, and any findings cannot be separated from that context. This drawback limits the exploitation of research findings. The present research proposes a methodological framework and process by which the contextual elements of the setting for a PPP transport infrastructure are described in respective typologies. A preliminary description of these typologies is presented. The proposed methodological framework is piloted by using 12 case studies from different countries and different transport modes (TMs). The results suggest the potential to transfer findings within groups of similar dimensions regardless of the physical location of implementation, the TM infrastructure, or even the actual business model. In addition, initial findings indicate the potential to transfer findings and knowledge over time. New hypotheses are generated, and their verification may have significant impact on the credit rating of PPP projects for transport infrastructure and, consequently, on the identification of alternative sources of finance.

Cost and Schedule Performance Benchmarks of U.S. Transportation Public-Private Partnership Projects

The use of public–private partnerships (PPPs) has steadily increased in the United States since the early 1990s. Infrastructure design and construction projects have seen significant variations in costs and schedules. Therefore this paper aims to quantify the cost and schedule performance of recently completed PPP projects in the U.S. transportation sector and compare them to their non-PPP counterparts. The authors collected and verified data from professional data sets, publicly available websites, and structured interviews with key project constituents. The paper presents results from 25 completed PPP transportation projects. All projects in the data set were completed between 1995 and 2013; project costs ranged from $18 million to $2.1 billion and totaled about $14 billion. The results of the analysis showed an average cost growth of 3.22% and an average schedule growth of 1.2%; when compared with traditional design–bid–build delivery, these findings illustrate superior performance. This paper fills a gap in the knowledge of PPP project performance in the U.S. transportation sector and compares the results with previous research efforts in the international PPP market.

Achieving satisfaction when implementing PPP transportation infrastructure projects: a qualitative comparative analysis of the A15 highway DBFM project

This article investigates how managers in public-private partnership (PPP) projects respond to social or physical events during the implementation of their projects, and which of their responses produce satisfactory outcomes. Multi-value Qualitative Comparative Analysis (mvQCA) was used to examine the events that took place during a large Dutch Design, Build, Finance and Maintain (DBFM) transportation infrastructure project. The analysis found that most events were social in nature. Private managers' responses to these events were internally-oriented and resulted in dissatisfactory outcomes. In contrast, externally-oriented managerial responses were associated with satisfactory outcomes. The article concludes that both public and private managers need to invest sufficiently in stakeholder management resources and capabilities when implementing projects. Although the intention of DBFM contracts is to lower the burden on the government, public managers still play an important role as intermediaries between the contractor and the local stakeholders and this role should not be underestimated.

Cross-sectoral comparison of concessions in transport

Purpose – The purpose of this paper is to present a methodology of comparing concession projects developed in different transport sub-sectors. The methodology is tested in the comparison of three different cases, each of which represent a particular mode of transport: a road development project, a city tramway project and a port lock construction initiative. Design/methodology/approach – A fuzzy logic approach methodology is applied in carrying out the comparison between cases. Granulation is achieved by employing a Contextual (Ws) Risk Analysis Framework, as risks constitute the basis to public private partnership (PPP) structure. Linguistic variables are then used to describe the comparative findings. Findings – The methodology presented allows for the comparison of three cases from different transport sub-sectors. Identification of similarities provides the potential to transfer experience from one sector to the other. With respect to the three cases studied, it was identified that traffic risk seems to be passed on to the private operators in relation to the level of exclusivity. Finally, PPP projects initiated by central government (as opposed to those initiated by local governments) seem to be more finance-driven than service-driven. Research limitations/implications – As the number of cases to be compared increases, quantitative comparative analysis fuzzy set values can be included in order to carry out a full analysis. The present approach should be considered introductory, as fuzzy sets are not generated due to the limited number of surveys (cases) compared (hence the term “pre-fuzzy”). Practical implications – The methodology presented and the cases tested indicate the possibility for knowledge/experience transfer and the transferability of best practices. Originality/value – Cross-sub-sectoral comparisons for transport PPP projects have not been identified in literature.

Integrating Environmental Outcomes into Transport Public–Private Partnerships

ABSTRACT This article presents, based on a survey of experts, a set of lessons learned and best practices related to integrating environmental outcomes in transport public–private partnerships (PPP). They are used to provide recommendations for best practices aimed at providing an understanding of the environmental processes and relationships with respect to undertaking PPP transport investments, specifically meeting the goals of both the private and public sectors in advancing environmental innovation in PPP transport projects. The recommended best practices are a combination of creating a team of experts, specifying environmental outcomes and performance metrics, recognizing the value of environmental performance, providing value incentives, introducing environmental legislation, understanding risk analysis and pooling, and engaging in competitive dialogue. While perhaps intuitive, results of the survey indicate that these practices are not adequately followed in practice. Thus, improved implementation may lead to more sustainable and innovative use of PPPs.

Use of key performance indicators for PPP transport projects to meet stakeholders’ performance objectives

Purpose – The need for more efficient and effective public-private partnership (PPP) projects makes performance management of increasing importance, especially with respect to stakeholder expectations. This paper seeks to examine the use of key performances indicators (KPI) based on the analysis of critical success factors (CSF) for monitoring of PPP transport projects from the perspective of different stakeholders. Design/methodology/approach – The list of stakeholders’ performance objectives including CSF was defined using the brainstorming technique applied to group of experts in PPP transport sectors and refined through literature review. Input of the expert group was validated against a feedback from a respective survey. Three main groups of stakeholders were identified: public sector, private sector, and users. Finally, the review and comparative analysis of existing KPIs in PPP transport projects was performed based on stakeholders’ objectives and project attributes using the “frequency of mention” approach. Findings – The paper introduced a two layers approach for the assessment of PPP projects. The first stage was based on evaluation of project ultimate objectives from the standpoint of each stakeholder, i.e. profitability for private sector, effectiveness and value for money for public sector, and level of service for users. An adjusted and weighted combination of fulfillment of the specific stakeholder objectives leads to an overall approach (second layer) of describing a PPPs success or failure. Originality/value – The paper presents the comprehensive review of literature on transport PPP projects and evaluation of available CSFs and KPIs.

Roles of Private-Sector Partners in Transportation Public-Private Partnership Failures

AbstractPublic-private partnership (PPP) models for public infrastructure delivery are becoming popular among government institutions around the world, due to their embedded potential value for money (VFM) to the public and governments themselves. The experience with infrastructure PPPs internationally have demonstrated many problems and partnership failures, where both the public and private sectors suffered huge losses. Motivated by a number of these failures, this study investigates the actions and decisions of private-sector partners by evaluating 35 failed transportation PPPs around the world. This paper identifies a set of drivers responsible for the failures of transportation PPPs, discusses the causal relationships between them, and finally evaluates a set of failure mechanisms initiated by the private-sector partners. It sheds light on the role of private-sector partners in terms of triggering failure mechanisms in transportation PPP failures. The identification of failure mechanisms discloses th...

Failure Links between Public and Private Sector Partners in Transportation Public Private Partnerships

Failure Links between Public and Private Sector Partners in Transportation Public Private Partnerships

The challenges of transport PPP's in low-income developing countries: A case study of Bangladesh

Public–Private Partnerships (PPP) in transport are a growing phenomenon throughout the world. The developing world in particular has seen a veritable explosion of such arrangements. There can be, however, a significant difference between developing countries that are ‘low-income’ versus those that are middle-income. In some ways low-income countries can benefit more from the access to new capital and technical expertise that a PPP can bring. On the other hand there can be significant barriers to implementation of PPP's in low-income nations and equity issues can loom especially large there. This paper examines these differences by way of a case study of the country of Bangladesh. The paper concludes with a discussion of preliminary ‘lessons learned’ in bringing transport PPP's to low-income countries.

The Challenges of Transport PPP's in Low-Income Developing Countries: A Case Study of Bangladesh

Public-Private Partnerships (PPP) in transport are a growing phenomenon throughout the world. The developing world in particular has seen a veritable explosion of such arrangements. There can be, however, a significant difference between developing countries that are 'low-income' versus those that are middle-income. In some ways low-income countries can benefit more from the access to new capital and technical expertise that a PPP can bring. On the other hand there can be significant barriers to implementation of PPP's in low-income nations and equity issues can loom especially large there. This paper examines these differences by way of a case study of the country of Bangladesh. The paper concludes with a discussion of preliminary ‘lessons learned’ in bringing transport PPP’s to low-income countries.

The Global Production of Transportation Public–Private Partnerships

AbstractAround the world, public–private partnerships have become increasingly popular to deliver large‐scale transportation infrastructure projects such as roads, bridges, railways, subways, seaports and airports. The aim of this article is to provide a framework to understand the global geography of projects built through this market‐driven procurement model, which have been predominantly concentrated in a small number of developed countries and emerging markets. As is shown, within many countries, a governance and regulatory environment has been established that supports public–private partnerships over other alternative procurement approaches. Nevertheless, the production of public–private partnerships worldwide has been dominated by a relatively small number of highly globalized construction contractors, engineering firms, financiers, accountancies and consultants from developed countries, who have focused their activities in a narrow set of regions. The article concludes by reflecting on the implications of the high level of industry concentration, and emerging trends showing greater involvement from firms from developing countries.ResuméÀ travers le monde, les partenariats public‐privé sont de plus en plus utilisés pour les projets d’infrastructure de transports de grande envergure, tels que routes, ponts, voies ferrées, métros, ports et aéroports. Cet article définit un cadre permettant de comprendre la géographie planétaire des projets bâtis selon ce modèle orienté par le marché, projets concentrés dans un petit nombre de pays développés et émergents. Les régimes de gouvernance et la réglementation mis en place dans de nombreux pays favorisent les partenariats public‐privé au détriment d’autres approches de réalisation de projets. Néanmoins, la production de ces partenariats dans le monde a été dominée par un nombre relativement réduit d’entreprises de bâtiment et d’ingénierie, de bailleurs de fonds, de cabinets de comptabilité et de conseils, acteurs installés dans des pays développés et dont les activités internationalisées s’exercent sur un ensemble restreint de régions. La conclusion aborde les conséquences d’une forte concentration industrielle et l’apparition d’une implication croissante des entreprises des pays en développement.

Valuing Public-Sector Revenue Risk Exposure in Transportation Public–Private Partnerships

A methodological framework can be used to evaluate public revenue financial risk exposure when transportation infrastructure is delivered through public–private partnerships (PPPs) in the United States. Transportation agencies worldwide and across the United States are increasingly using PPPs as a mechanism to deliver infrastructure. An analysis of international experience conducted for this research shows that countries with more extensive experience in PPPs than the United States have devised sophisticated methodologies to value and manage risk exposure in the context of value for money and optimum allocation of project risks. However, a review of major U.S. transportation PPP transactions reveals that U.S. states currently lack a well-documented methodology to quantify and incorporate the cost of public-sector risk into the evaluation of PPP projects. This evidence suggests that U.S. transportation agencies might benefit significantly from implementing more systematic approaches to incorporate the cost of risk in the evaluation of PPP projects. The framework proposed in this research provides a step-by-step methodology to quantify revenue risk exposure and is aimed at facilitating the estimation of the risk-adjusted costs of delivering a project as a PPP. The methodology is based on the concept of contingent liabilities and uses option pricing techniques. The application of the methodology is demonstrated by two U.S. transportation PPP case studies.

Urban Transportation Public–Private Partnerships: Drivers of Uneven Development?

Around the world, public–private partnerships (PPPs) have been widely promoted as a model to expand the provision of critical urban transportation infrastructure. This paper examines the extent to which PPPs have actually been used to deliver urban transportation infrastructure, and whether this model of project delivery has redressed historically uneven patterns of global infrastructure investment. Through an analysis of over 950 transportation PPPs worldwide over the past quarter century, it is shown that only one third were projects built in urban areas. Of these urban projects, PPPs have been concentrated in the largest and wealthiest cities in a small number of countries, largely supported road projects rather than public transit, and been an unstable source of funding during periods of economic volatility. These uneven patterns of project development are explained by three interrelated factors: overlapping jurisdictions in urban governance, project risk profiles, and market interest. The paper concludes by reflecting on the theoretical and policy implications of these findings.

Public-Private Partnerships in U.S. Transportation: Research Overview and a Path Forward

Public-private partnerships (PPPs) are contractual relationships between government and industry to deliver facilities or service for public benefit. In the United States, existing transportation infrastructure is aging and new infrastructure is underfunded. PPPs are considered one way to help meet this looming need. Although PPPs have a long history, interest in modern PPPs is renewed. The current debate over PPPs lacks theory and research to support the various views of PPPs. Promoters say they bring needed financing, technology, management, and risk sharing to infrastructure development. Detractors say government agencies are better positioned to finance and own infrastructure and protect the public interest. The unique contribution of this paper is to provide the results of a national survey on the state-of-practice of PPPs in transportation in the United States, and to provide a comprehensive overview of research on U.S. transportation PPPs in the areas of economics, law, and public opinion. Additionally, a path forward is offered to help organize and guide research in U.S. transportation PPPs in the future.

Transaction Costs in Transport Public–Private Partnerships: Comparing Procurement Procedures

In recent years, concern has grown over good practices in the procurement process in public–private partnerships (PPPs). The consensus view is that PPPs are prone to higher transaction costs than traditional public provision. In this paper, we contrast the hypothesis that transaction costs in transport PPPs depend, to a large extent, on the procurement mechanism used in each case, comparing the Negotiated and the Open procedures. Given that PPPs may offer considerable benefits and significant savings over the entire life cycle of the project, it is essential for PPPs to minimize those costs that undermine efficiency gains and that deter private involvement. The quantitative analysis undertaken in this paper highlights that there is room for important savings in the tendering of PPP transport infrastructure projects, using an Open procedure.

Innovation in public–private partnerships (PPPs): the Spanish case of highway concessions

This article identifies the factors that determine innovation in transport PPPs in Spain. Innovation is an important way of achieving efficiency but it is not an intrinsic characteristic of PPP projects. The authors describe the multiple regression model they devised to estimate innovation. The results show that PPP contracts can be designed to maximize innovation in R&D. However, there does not appear to be greater innovation in any other areas. The information provided has important implications for public service organizations considering new contracts with the private sector.

Does the political and economic context influence the success of a transport project? An analysis of transport public-private partnerships

The construction and provision of infrastructure services such as transport nowadays is often based on a partnership between three main actors: public sector, private sector and multilateral lenders, under a framework of Public–Private Partnerships (PPPs). This type of partnership has been employed in a wide range of projects in the transport sector and in various contexts in developing and developed countries. Given this observation, the objective of this paper is to examine how countries’ economic and political characteristics contribute to the success of PPPs in transport investments. Special focus in the analysis is given to how the perception of corruption and democratic accountability may influence the success of a PPP project in different transport sectors. We examine a database with 856 transport PPP projects using a generalized linear model in the form of a logit model in order to evaluate the transport database covering data from 72 countries, classified in six regions. The study highlights the importance of national experience. Not only does national macroeconomic experience appear to have a relevant role, but so also does its past experience (either positive or negative) of transport PPP projects. An interesting finding from the analysis is the importance of the rest of the world’s perception of a country’s level of corruption and democratic accountability for the final outcome of a PPP project.

Delivering Transportation Infrastructure Through Public-Private Partnerships: Planning Concerns

Problem: The types of public-private partnerships (PPPs) in which private sector partners take on increased responsibility for project design, construction, financing, and operation have become popular in the United States and around the world as means of delivering large-scale transportation infrastructure. However, it is unclear what implications this model of project delivery has for planning theory and practice as distinct from public policy more generally. Purpose: I aim to develop a set of criteria on which to evaluate the procedural, spatial, design, public policy, and political implications of these PPPs from a planning perspective, and then to examine whether their proposed benefits are matched by real-world experiences. Methods: I examine in depth three case studies of transportation projects delivered through such PPPs: the Croydon Tramlink in London, UK; the State Route 91 toll lanes in Orange County, CA; and the Cross City Tunnel in Sydney, Australia. Results and conclusions: The short-term and long-term impacts of such PPPs on infrastructure project delivery were different. In the short term, the model was effective at raising funds for new facilities and transferring financial risks to the private sector, but its limited transparency minimized meaningful community engagement in project planning. Over the longer term, noncompetition clauses in the concession agreements restricted government flexibility to respond to changing conditions, lawsuits were common as relationships between the partners deteriorated, and all three concessions were ultimately sold under duress, two to public sector agencies. Takeaway for practice: These PPPs profoundly affected the planning processes for public infrastructure and the outcomes achieved once such facilities were operational. This research identifies the need for new ex ante evaluation tools, risk transfer mechanisms, community engagement processes, and data tracking and performance monitoring procedures, to prevent negative consequences from transportation PPPs. Research support: None.

Enabling Development of the Transportation Public-Private Partnership Market in the United States

Public-private partnerships (PPP) for infrastructure development and management have received significant attention in academic, institutional, and political circles over roughly the last two decades. This attention was prompted, to a great extent, by early experiments with PPP-type arrangements in Australia, Canada, and the United States coupled with the United Kingdom's Private Finance Initiative policy—not to mention the experience of other parts of the world such as Asia, continental Europe, and South America. PPP policies and practices have evolved in other world regions, but the United States remains a relatively slow mover in this market. While varying explanations for this circumstance are plausible, the situation can play to America's advantage since the nation can capitalize upon the tested experience of its international counterparts. Drawing upon data and information collected from two principal sources: (1) case histories of PPP projects in North America to date and (2) a scanning tour of Australia, Portugal, Spain, and the United Kingdom in 2008, misconceptions regarding PPPs are clarified, contemporary international policies and practices are characterized, and recommendations for implementing PPPs for transportation infrastructure are made. The principal intent of this paper is to trigger a dialogue about PPPs and how they might improve America's infrastructure assets.

NEW LABOUR, PUBLIC-PRIVATE PARTNERSHIPS AND RAIL TRANSPORT POLICY

The New Labour government has favoured the deployment of Public–Private Partnerships (PPPs) to provide investment in transport infrastructure. The results of this policy on the railways have, however, been disappointing in terms of cost and efficiency. Public transport PPPs require complex contracts underpinned by regulatory mechanisms in order to maintain performance and safety standards. Moreover, risk transfer is difficult to achieve, as essential infrastructure cannot be left to the ultimate market discipline of bankruptcy.