Critical Analysis of the Private Sector Roles in Water PPP Failures

Abstract

Public-private partnerships (PPPs) have seen continuous growth in water infrastructure and services over the last few decades due to budgetary and technological constraints of the public sector and the requirements for efficiency improvements. However, many water PPPs have failed in both developed and developing countries. In some cases, the government has to pay huge compensations for contract terminations, and in others, the private party withdrew or even became bankrupt because of extreme financial loss. Despite the disastrous consequences, research on water PPP failures is scarce. This paper attempts to unveil the factors associated with the private sector that have led to the failure of water PPPs and their causal relationships. Through an exploratory sequential mixed-method research approach that integrates literature review, multiple case studies, questionnaire survey, and statistical analysis, this paper has identified the common failure drivers initiated by the private sector, evaluated the relative severity of the failure drivers, and established the failure mechanism model for water PPPs in general. Outputs of this study will facilitate public and private sectors in better planning and managing water PPP projects and developing more responsive strategies to address the failure drivers that can occur in the different stages of the PPP life cycle toward successful outcomes.