Public-private Partnership Contracts Research Articles

Public-Private Partnership: A New Policy to Ameliorate the Quality of Public Utility Services to the Public

Objective: The paper aims to determine why the government resorts to partnerships with the private sector, in addition to the advantages and disadvantages of the public-private partnership system, and explain the types and forms of public-private partnerships. Theoretical Framework: This paper presented the concept of partnership and the reasons for partnership with the private sector. It also presented the types of partnerships with the private sector and, more specifically, the different BOT systems. Method: The study relied mainly on the descriptive approach to understand the concept of partnership, determine the forms of partnership between the public and private sectors, and the types of partnership with the BOT system. The study also relied on the analytical approach in analyzing the advantages of the partnership system between the public and private sectors and identifying the defects and challenges facing the partnership systems between the public and private sectors. Results and Discussion: The partnership between the government and the private sector is not a path strewn with roses. Many challenges must be faced, and for the partnership to work as desired, the conditions and components discussed in this research must be met, which are factors in themselves. Research Implications: This paper examines the role of public-private partnerships in enhancing the performance of public utilities and reducing the cost of providing services. Originality/Value: This study contributes to the literature by explaining the role of public-private partnership contracts in Egypt and the United Arab Emirates, presenting their definition, advantages, disadvantages, challenges, and legal framework.

On the relevance of ideology and electoral cycles in the celebration of public-private partnership contracts for infrastructures in Brazil

This paper provides a unique empirical analysis of the effects of political factors on the adoption of PPP contracts in Brazil. As such, it innovates along two different lines: first, political factors behind the adoption of PPPs have been largely ignored in the vast body of empirical literature, and second, there is scant work done on the motives of any kind behind the adoption of PPPs in Brazil. Various economic and financial reasons have been evoked to justify the use of PPPs in general. These include the goal of promoting socio-economic development in a tight public budgetary framework or of improving the quality of public services through the use of economically efficient and cost-effective mechanisms. Any possible underlying political motives, however, have been overlooked in the PPP research. And yet, there is abundant literature suggesting a link between the adoption of PPPs and the ideology of the governing body or the political cycles associated with elections. This study examines the impact of ideological commitment and opportunistic political behavior on the process of PPP contracting in Brazil, including the stages of public consultation, the publication of tender, and the signature of the contract, using federative-level data for the period between 2005 and 2022. Consistent with the outstanding literature, the two hypotheses are tested: first, conservative parties tend to celebrate more PPP contracts than left-leaning parties, and second, the electoral calendar has a significant effect in the process, allowing for opportunistic behaviors. Empirical results suggest that there is little evidence for the relevance of ideological leanings in the process of adopting PPPs in Brazil. Additionally, regardless of ideology, parties significantly choose to enter PPPs at specific points in the electoral cycle, suggesting decisions are influenced by political considerations and electoral strategy rather than by purely financial or ideological considerations. This may pose severe constraints on the efficiency and cost-effectiveness of the contracts, negatively impacting public governance and leading to protracted costs for taxpayers.

On the relevance of ideology and electoral cycles in the celebration of public-private partnership contracts for infrastructures in Brazil

On the relevance of ideology and electoral cycles in the celebration of public-private partnership contracts for infrastructures in Brazil

Private Partner Prioritization for Public–Private Partnership Contracts in a Brazilian Water Company Using a Multi-Criteria Decision Aid Method

Public–private partnerships (PPPs) are long-term contracts between government entities and private companies, and are increasingly being adopted in developing countries due to the large need for investments in sectors such as water and sewerage and also in order to benefit from the experience and to have access to the resources and technology of the private sector. Prioritizing the private party of the contract becomes a complex decision due to the characteristics of PPP contracts, and a standard of evaluation has not been adopted yet, the decision usually being made by evaluating the price. Thus, this research aims to propose a set of criteria to be incorporated into the decision problem that involves technical aspects. It then seeks to rank alternatives by using a multi-criteria decision aid method, FITradeoff, which supports the decision-maker (DM) in prioritization and provides transparency and security to the process.

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.

Does facility-maintenance service quality drive tenants’ willingness to pay higher rent? Evidence from Indian residential real estate infrastructure

PurposeThis paper aims to empirically investigate the effect of facility–maintenance service quality on tenants’ satisfaction and their subsequent willingness to pay higher rent in the National Capital Region (NCR), India.Design/methodology/approachThe data for this study was collected from 1,692 tenants in NCR, India. SmartPLS4.0 was used to analyze the data using structured equation modeling.FindingsThe study findings indicate that all parameters of facility–maintenance service quality (tangibles, service personnel quality and empathy) positively impact tenants’ satisfaction. Further, satisfied tenants are willing to pay higher rentals. In addition, customer satisfaction partially mediates the relationship between facility–maintenance service quality and willingness to pay higher rent.Research limitations/implicationsThe study extends evidence-based research in the service industry to provide empirical evidence that facility–maintenance service quality positively impacts customer satisfaction in real estate settings in emerging markets (India). This research will guide future researchers to explore other dimensions to support evidence-based research in real estate settings.Practical implicationsBased on the data collected online after personal interaction in residents’ meetings, the study findings provide significant insights for stakeholders such as policymakers, practitioners, landlords, associations and builders. With rising housing demand because of rural migrations toward urban or metro locations coupled with the government’s inability to expand the infrastructure simultaneously, the government has enhanced the role of public–private partnership (PPP) in housing development. The findings will help policymakers incorporate the service angle into key performance indicators in PPP contracts. Additionally, with rising competition in the housing sector, understanding these factors will help landlords and resident associations improve service quality standards, thus enhancing the residential societies’ word-of-mouth publicity and attracting high-paying residents.Originality/valueTo the best of author’s knowledge, this is a pioneer study to empirically investigate the impact of facility–maintenance service quality standards on tenants’ satisfaction and willingness to pay higher rent in a residential setting in India.

Hybrid Evaluation Model to assess the overall barriers of public-private partnership contracts

Public-private partnerships are increasingly being used in many countries as a common management technique to enhance the delivery of public services and major public infrastructure projects. Understanding the project characteristics and obstacles to a public-private partnership is key for those involved to improve implementation. This study focuses on barriers that arise from public-private partnership contact in field wastewater treatment plants and offers a methodology for evaluating the overall barrier for public-private partnership projects by analyzing the relationships between the barrier elements. A primary list of barrier factors and their eight latent project characteristics were collected through literature reviews, then using the Delphi technique to filter the barrier insights concerning project characteristics and develop the final list using field interviews. 207 valid questionnaires were obtained. The data was deconvoluted into crisp numbers using fuzzy set theory, and a second-order structural equation model was used to validate the conceptual model. The results of the study indicate that the availability payment capability group has the highest score of all the groups in this study. This study proposed a model that enables the private sector to measure and evaluate aggregate barriers in projects so that it is easier for decision-makers to determine whether they can choose the project or not.

Bureaucratic redundancy and administrative burden: Evidence from public‐private partnerships (PPPs) in China

AbstractAdministrative burden is experienced by both individuals and businesses when dealing with government entities. While previous literature suggests administrative burden arises from the deliberate choices of political actors, this study highlights how bureaucratic redundancies also lead to administrative burden. Using a dataset of public‐private partnerships (PPPs) in China, this study explored the influence of bureaucratic redundancy on administrative burden, in particular contractors' compliance costs caused by PPP regulations. The analysis found that bureaucratic redundancy has a positive and curvilinear relationship with compliance costs, which in turn has a positive relationship with the likelihood of PPP contract termination. These results hold even after controlling for political and economic factors. Nevertheless, such effects can be mitigated through government reforms, such as jurisdictional reduction and legislative centralization.

Learning from the End of the Public-Private Partnership for Lesotho's National Referral Hospital Network.

Public-private partnerships (PPP) are one strategy to finance and deliver healthcare in lower-resourced settings. Lesotho's Queen 'Mamohato Memorial Hospital Integrated Network (QMMH-IN) was sub-Saharan Africa's first and largest integrated healthcare PPP. We assessed successes and challenges to performance of the QMMH-IN PPP. We conducted 26 semi-structured interviews among QMMH-IN executive leadership and staff in early 2020. Questions were guided by the WHO Health System Building Blocks Framework. We conducted a thematic analysis. Facilitators of performance included: 1) PPP leadership commitment to quality improvement supported by protocols, monitoring, and actions; 2) high levels of accountability and discipline; and 3) well-functioning infrastructure, core systems, workflows, and internal referral network. Barriers to performance included: 1) human resource management challenges and 2) broader health system and referral network limitations. Respondents anticipated the collapse of the PPP and suggested better investing in training incoming managerial staff, improving staffing, and expanding QMMH-IN's role as a training facility. The PPP contract was terminated approximately five years before its anticipated end date; in mid-2021 the government of Lesotho assumed management of QMMH-IN. Going forward, the Lesotho government and others making strategic planning decisions should consider fostering a culture of quality improvement and accountability; ensuring sustained investments in human resource management; and allocating resources in a way that recognizes the interdependency of healthcare facilities and overall system strengthening. Contracts for integrated healthcare PPPs should be flexible to respond to changing external conditions and include provisions to invest in people as substantively as infrastructure, equipment, and core systems over the full length of the PPP. Healthcare PPPs, especially in lower-resource settings, should be developed with a strong understanding of their role in the broader health system and be implemented in conjunction with efforts to ensure and sustain adequate capacity and resources throughout the health system.

Реалізація інвестиційних проєктів на засадах партнерства влади, бізнесу та суспільства в Україні: сучасні тенденції та прогнозування розвитку

The article is devoted to the analysis of the current state and prospects for the development of the partnership of government, business and society on the basis of public-private partnership (PPP) in Ukraine for the period 2024-2030, in particular in the context of the country's post-war recovery. The paper examines the key trends in the implementation of PPP contracts for the period from 2018 to 2023, reveals serious problems in the implementation of projects, in particular, a decrease in the number of implemented contracts and an increase in the share of unimplemented and terminated contracts. The influence of military actions on the PPP implementation process is analyzed and the need to adapt management mechanisms to new conditions is emphasized. Special attention is paid to the role of PPPs in the recovery of critical sectors such as education, health care, transport and others, as well as opportunities to attract investments. Three main scenarios for the development of the partnership between government, business and society for the coming years are considered: optimistic, basic and pessimistic. It was determined that the PPP has significant potential for positive change, but success will depend on economic stability, political decisions and the effectiveness of legislative changes. For the purpose of more accurate forecasting, the Monte Carlo method was applied, which made it possible to obtain detailed forecasts of PPP development under three scenarios. The simulation results showed that the optimistic scenario predicts a high potential for project development and a significant amount of investment, while the pessimistic scenario reflects possible difficulties and limited growth. The importance of strategic planning and adaptation to possible changes for effective management of investment projects on the basis of partnership between government, business and society in conditions of uncertainty is justified.

Application of public-private partnership in smart city projects implementation considering environmental management

The paper presents the "Smart City" pilot project from the point of view of the benefits of public-private partnership for each participant in the joint activity aimed at optimizing urban infrastructure. The role of the state and the private sector in the transformation of the city into a single "smart" system is defined. Indicators of the state's expectations from the implementation of the pilot project are given. The forms of public-private partnership contracts and the degree of their applicability on the example of a concession agreement are considered. The possibility of realization of public-private partnership in certain areas of concession agreements is examined. The probable future of the Smart City project activities after its completion from the point of view of the development of public-private partnership principles is determined. The strategic importance of the Smart City project implementation and, separately, of the PPP principle for the optimization of public relations is revealed.

Articulation between Soft Law and Hard Law in the Award of Public-Private Partnership Contracts through Unsolicited Bids in Burundi: Towards Harmonization with International Practice

Articulation between Soft Law and Hard Law in the Award of Public-Private Partnership Contracts through Unsolicited Bids in Burundi: Towards Harmonization with International Practice

A review of circular economy models and success factors on public-private partnership infrastructure development

PurposeThe application of circular economy (CE) has received wide coverage in the built environment, including public-private partnership (PPP) infrastructure projects, in recent times. However, current studies and practical implementation of CE are largely associated with construction demolition, waste and recycling management. Few studies exist on circular models and success factors of public infrastructures developed within the PPP contracts. Thus, the main objective of this article is to identify the models and key success factors associated with CE implementation in PPP infrastructure projects.Design/methodology/approachA systematic review of the literature was undertaken in this study using forty-two (42) peer-reviewed journal articles from Scopus, Web of Science, Google Scholar and PubMed.FindingsThe results show that environmental factors, sustainable economic growth, effective stakeholder management, sufficient funding, utilization of low-carbon materials, effective supply chain and procurement strategies facilitate the implementation of CE in PPP infrastructure projects. Key CE business models are centered around the extension of project life cycle value, circular inputs and recycling and reuse of projects.Research limitations/implicationsAlthough the study presents relevant findings and gaps for further investigations, it has a limited sample size of 42 papers, which is expected to increase as CE gain more prominence in PPP infrastructure management in future.Practical implicationsThe findings are relevant for decision-making by PPP practitioners to attain the social, economic and environmental benefits of transitioning to circular infrastructure management.Originality/valueThis study contributes to articulating the key models and measures toward sustainable CE in public infrastructure development.

Public-Private Partnership in Indonesia: Solutions and corruption loopholes

We need to better understand Public-Private Partnership (PPP), since most people perceive PPP as a riskless solution for government, as it involves private sector funding. In Indonesia, infrastructure development is one of the top priority sectors for Joko Widodo’s administration, and PPP has become a viable option due to budgetary constraints. However, PPP is not an impeccable solution, as there are weaknesses and loopholes for corruption to be aware of. In this literature review, we combine our previous study on Indonesia’s toll road PPP with other PPP studies to identify the weaknesses and corruption loopholes in PPP practices in Indonesia. There is clear evidence that PPP projects could end up as “white elephants”, indicating misallocation of resources and poor planning. PPP could also be used to create “fiscal illusion” to deceive public by the government. We also discovered that toll road PPP contracts in Indonesia remain vulnerable, potentially creating room for loopholes and corruption.

Determinants of the successful signing of public–private partnership contracts for water and sanitation infrastructure financing in Zimbabwe

Abstract The private sector remains hesitant to invest in water and sanitation infrastructure in Zimbabwe. For policymakers and investors, it is pertinent to understand the factors that determine the signing of water and sanitation public–private partnership (PPP) contracts, in order to leverage expertise and resources to achieve the Sustainable Development Goal targets. This study applied count econometrics on data collected for the 25 years from 1996 ending in 2021, with the aim of investigating the determinants of the number of PPP contracts signed in Zimbabwe. Poisson regression estimations identified positive macroeconomic prospects, financial market development, and strong institutional governance environment as important determinants for PPP contracting in Zimbabwe. The number of PPP contracts is further confirmed to be dependent on the availability of inward foreign direct investment flows. The influence of institutional governance quality on the number of water and sanitation PPP contracts was tested using a composite index constructed using the principal components analysis technique. It is advised that the government of Zimbabwe should strengthen their governance institutions and further develop their capital and bank credit markets, so as to attract investors to take up the water and sanitation infrastructure PPP contract opportunities available in the country.

Desalination of seawater in Morocco: Case study of Chtouka and Dakhla public‐private partnership projects

AbstractSituated between the southern Mediterranean and the Sahara Desert, Morocco has a semi‐arid climate characterized by low and irregular rainfall and a succession of dry years. With demographic and economic growth, the country's water needs are constantly increasing. The desalination of sea water is an option adopted by the government to cope with the drying up of water resources. A number of projects have been launched to secure the country's drinking water and irrigation needs. In this study, the contributions of the public‐private partnership (PPP) set‐up are assessed from the institutional, financial, technical, and management points of view, as well as the contribution of this set‐up to the success of major desalination projects for irrigation. To achieve the objective, the study focused on two desalination projects for irrigation, one in the Chtouka plain and another in the Dakhla area, based on an assessment of the various components of the two projects, and the key success factors for each of them. The study reveals that the PPP arrangement brings several advantages to these desalination projects for irrigation, principally: the participation of the private partner in the financing, the sharing of risks between the two public and private parties, and the sustainable management of the various components of the project. The Dakhla project also offers added value compared with other desalination PPP projects, because it is the first project to be included in Law No. 86‐12 on PPP contracts. At the same time, the PPP structure presents risks in terms of controlling delays caused by external events. Thus, the inauguration of new desalination PPP projects, as part of the Generation Green strategy, is proving to be a relevant solution for guaranteeing additional resources for irrigation and improving the technical, economic, and financial conditions for managing the irrigation water service.

Effective criteria in the public-private partnership in developing countries to apply the sustainable development goals: GAN-based decision support system for the renewable electrical system, case study Syria

The cost of generating electricity in developing countries surpasses the government's ability to sustain it, necessitating the involvement of the private sector in this service provision through public-private partnerships (PPPs) contracts. In Syria, the electricity system has been highly susceptible to damage as a result of the ongoing crisis, leading to frequent and prolonged blackouts. This research focuses on addressing the need for a comprehensive system that aids decision-making for PPPs contracts in the country. By employing a combination of studies, reports, and interviews with domain experts, significant general and exclusive factors that guide decision-makers in PPPs contracts are identified and organized into questionnaires. These questionnaires are then filled out by professionals engaged in PPPs contracts. The collected data is analyzed and validated using SPSS software. However, due to insufficient data collected, generative adversarial neural networks (GAN) are utilized to enhance the research data. Additionally, Expert Choice and the analytic hierarchy process are employed to calculate weights for each factor. Remarkably, the calculated weights for both general and exclusive factors align with real-life strategies. General factors primarily address the financial and commercial considerations associated with PPPs, while exclusive factors primarily focus on the operational aspects of the electrical power system. These factors are arranged in descending order of effectiveness, enabling stakeholders to determine whether the private sector should be engaged in the project or if it should remain within the public sector's purview. The proposed system has demonstrated its reliability and can serve as a promising starting point for PPPs contracts.

Competing with Leviathan: Law and government ownership in China’s public-private partnership market

Despite years of economic reform, government-owned enterprises (GOEs) continue to be prevalent in certain sectors of China’s economy. Drawing on empirical evidence from China’s public-private partnership (PPP) market, this article empirically tests whether the theory of the ownership of enterprise can explain the distribution of GOEs in China. It first conducts an empirical study on the disclosed judgments of Chinese courts to show that the enforcement of PPP contracts remains relatively weak in China, which gives rise to the concern of government opportunism. It then presents empirical evidence that the level of government ownership in each project correlates with the chances of government opportunism, which can be measured by project duration, project sector, and renegotiation terms in the contract. These findings show that the level of government ownership is affected by two competing forces—ownership costs and transaction costs. While GOEs incur relatively high ownership costs, they generally incur lower transaction costs because they can curb government opportunism and thus can outcompete private firms in some projects.

Driving Factors of Concession Period in Healthcare Public Private Partnerships

Public Private Partnerships (PPPs) play a vital role in infrastructure development and public service delivery, with government entities collaborating with private sector organizations to achieve shared goals in the long term. An essential aspect of PPP contracts is the concession period, during which Special Purpose Vehicles (SPVs) are responsible for financing, building, operating, and maintaining public assets. The concession period has significant implications, associated with project risk, revenue, operations expenses, profitability, and bankability. While numerous studies focus on determining “optimal” concession periods, fewer explore the factors driving concession periods in national PPP programs, especially for social infrastructure projects relying primarily on availability payments. To fill this gap, this research aims to identify and analyze the effect of various potential factors on the length of the concession period, using linear regression analysis on a data set of healthcare PPP projects in Italy. This research theoretically contributes to understanding the driving factors of concession periods in PPP projects and provides insights for a balanced approach to PPP project planning and regulation and related strategies. On the practical side, decision makers can negotiate optimized concession periods, ensuring successful and sustainable public infrastructure projects.

Identification of Various Execution Modes and Their Respective Risks for Public–Private Partnership (PPP) Infrastructure Projects

The public–private partnership (PPP) based model for the execution of infrastructure projects originated from Anglo-Saxon countries and was initially used in 1977 by the United Kingdom (U.K). Since then, its popularity has increased worldwide. Earlier studies by researchers and many other professional sectors and departments have introduced PPP contracts into different execution modes like Build, Operate, and Transfer (BOT); Build, Own, Operate, and Transfer (BOOT); and Build, Lease, and Transfer (BLT), etc. All definitions of PPP contracts are different but have a few common characteristics and risks. Previously, numerous pieces of literature were available on these common risks for various execution modes of PPP contracts. However, each PPP mode still has unique risks that must be identified to understand and successfully implement the PPP projects properly. This paper fills the gap mentioned above and aims to identify various commonly used PPP execution modes in infrastructure projects and their corresponding risks after placing the different PPP execution modes into four (04) different categories. Identified risks for the corresponding PPP categories were also divided into seven (07) stages of the PPP life cycle. Semi-structured interviews were conducted to gather information from thirty-four (34) PPP experts worldwide. Accordingly, interviews are transcribed and processed for thematic analysis in academic NVIVO software. These identified risks are further placed in the respective PPP category for the convenience and better understanding of the study’s outcome to the users and for the subsequent prioritization and allocation of these identified risks accordingly to the PPP parties during the finalization of the PPP execution mode.