Enabling Successful Application of PPPs in New (Inexperienced) Markets: Implications of PPPs’ Success and Failure in Toll Roads

Abstract

Despite previously successfully delivery of toll roads through public-private partnership (PPP), inexperienced (new) markets are more susceptible to failures due to the complexities involved in this approach, which have created distrust in inexperienced road sector markets in considering implemention of PPP. These markets lack the identification of both potential failure reasons and factors that enable the successful implementation of PPP projects for the first time. Therefore, this study aims to identify possible failure reasons and enablers of PPP implementation in new road sector markets. To this aim, the study employed a comparative cross-case study aggregation technique on document data collected from PPP projects implemented without previous experience of partnership in the road sector, namely the Dakar-Diamniadio toll highway (DDTH) from Senegal and the Lekki-Epe expressway (LEE) in Nigeria. The analysis identified reasons that played important roles in the projects’ success and failure. The DDTH was successfully implemented through PPP due to the early formation of a legal and institutional structure, the hiring of advisory services, stakeholders’ consultation, government commercial viability gap financing, and the implementation of improved risk allocation mechanism to prevent transfer of macroeconomic risk to the end-users. These factors enabled the successful implementation of DDTH, whereas the same acted as the failure reasons in the LEE project, leading to its early termination. The result of this study may help inexperienced markets avoid project failures by taking mitigation measures at an early stage.