Potential Obstacles to Successful Implementation of Public-Private Partnerships in Beijing and the Hong Kong Special Administrative Region

Abstract

Public-private partnership (PPP) has been practiced for quite some time around the world and there are numerous infrastructure, construction, and building projects which are employing the concepts. Unfortunately, not all of these PPP projects are equally successful and some of these projects have been exposed to formidable obstacles. The need to identify potential obstacles for PPP projects is therefore becoming an important issue for both research and practice. Despite the amount of interest vested in PPP, it is normally the advantages of PPP that are touched on rather than the potential obstacles. Both Beijing and the Hong Kong Special Administrative Region (referred to as Hong Kong from here onwards) have been keen to introduce more PPP projects. This paper presents part of the findings of an empirical questionnaire survey in relation to the prevailing barriers to PPP success conducted in these two administrative systems. It was anticipated that the obstacles would be similar for these jurisdictions. Respondents were asked to rate the level of severity of thirteen potential obstacles toward PPP projects identified from a literature review. The top three obstacles rated by the Beijing respondents were found to be “lengthy delays in negotiation,” “lack of experience and appropriate skills,” and “lengthy delays because of political debate.” Similarly the first and third obstacles ranked by the Beijing respondents were also ranked within top three by the Hong Kong respondents, together with “very few schemes have actually reached the contract stage (aborted before contract).” It was also discerned that “less employment positions,” “reduce the project accountability,” and “high project costs” were all ranked bottom by both of the Beijing and Hong Kong respondents. Moreover, the results obtained in the United Kingdom reported in other studies also shown consistency with those of Beijing and Hong Kong. Therefore the research hypothesis was proved to be true. Although the importance of the obstacles was similar it was realized that the scores obtained in the United Kingdom survey were much lower. This observation showed that the British respondents were less threatened by the obstacles, probably due to the fact that they are much more experienced and confident in undertaking PPP projects compared to Beijing and Hong Kong. Further analysis of the data reflected that the responses within each administrative system were consistent as revealed from the Kendall’s concordance analysis. Although the Spearman rank correlation test indicated that there was no significant disagreement on the rankings of obstacles between respondents of the two administrative systems, considerable difference was detected by the independent two-sample t-test in the mean value of their responses between the two administrative systems for the two obstacles lack of experience and appropriate skills and lengthy delays in negotiation. In Beijing, respondents felt that lack of experience and appropriate skills were highly important ranking it second place, but in Hong Kong this obstacle was ranked eighth, showing their confidence in experience and skills. For lengthy delays in negotiation, although the ranking between Beijing and Hong Kong was similar the difference in score showed a large variation. This represents a difference in tendering procedures between the two administrative regions. Triangulation with real cases largely supports the survey findings.