Socioeconomic, Macroeconomic, and Sociopolitical Issues in Water PPP Failures

Abstract

Public–private partnerships (PPPs) have been used worldwide in infrastructure services to achieve better value for money. However, PPPs in the water sector have witnessed many failures in both developed and developing countries, not only resulting in hefty financial burdens for the parties involved but also eroding public confidence and trust in the private sector participation in water services. In this study, we first explored the socioeconomic, macroeconomic, and social-political failure drivers (FDs) that resulted in the failures of 36 international water PPP projects. The relative significance of the FDs was evaluated through a questionnaire survey of international PPP experts. A hierarchical structural failure model was then developed using interpretative structural modeling that graphically displays the causal relationships of the FDs. Finally, cross-impact matrix multiplication applied to classification [matrice d’impacts croises-multiplication appliqué a un classement (MICMAC)] analysis established the degree of the relationships between the FDs. The hierarchical structural failure model can serve as a tool to avoid potential problems in order to prevent the occurrence of next failure drivers, thus increasing the chance of success of water PPPs.