Evaluation of the Functions of Public Sector Partners in Transportation Public-Private Partnerships Failures

Abstract

Public-private partnerships (PPPs) are institutional arrangements that facilitate private business activities in the public sector. The adoption of transportation PPPs is based upon governmental efforts to achieve extended efficiency, economy, and effectiveness in comparison to conventional infrastructure procurement systems. Transportation PPPs have shown remarkable contributions in achieving infrastructure development goals. However, introducing long-term profit oriented activities for public infrastructures, which basically run on the principles of social welfare, has brought numerous new management issues and risks that were never observed before in conventional infrastructures’ procurement systems. New to such risks, public sector personnel have become prone to make mistakes that could cause loss of value to the public and even partnership failure. Along with a long list of successful transportation PPP projects, there also are a notable number of failed transportation PPP projects. This study is motivated by such failed transportation PPPs, in which public sector partners played key roles leading to partnership failure. First, a set of failure drivers has been established based on the evaluation of 35 case studies of failed transportation PPP projects. The identified failure drivers include improper actions and decisions by the project partners, socio-economic factors, factors associated with political and national situations, and other associated events responsible for transportation PPP failures. Second, the causal relationships among the failure drivers have been identified and the functions of the public sector personnel are evaluated. Third, the causal relationships are discussed in detail in terms of failure mechanisms, with examples extracted from case studies. The identified failure mechanisms have revealed the fact that failure drivers associated with public sector partners transmit their impacts over the entire project life cycle, thereby triggering new failure drivers and creating problems for other project partners. The findings of this paper will help public sector personnel to safeguard partnerships more effectively and provide private sector PPP practitioners with a better understanding of their counterparts’ actions and decisions, and their influence on the project success.