Governance for Principal–Principal Relationship in Infrastructure Public–Private Partnerships: A Case Study in China

Abstract

This study is aimed at analyzing how governance structure and mechanisms can support the cooperative principal–principal relationship between the public and private sectors in infrastructure public–private partnership (PPP) projects. This topic is important because PPP projects are prevalent in developing countries such as China, and the two sectors can face inherent conflicts when they come into the principal–principal relationship. To address this aim, we employed an in-depth qualitative case study of Beijing Metro Line 4—a typical and successful PPP project in China. Based upon retrospective primary and secondary data, we identified and analyzed effective governance mechanisms at institutional, corporate, and project levels. These mechanisms enable both sectors to balance power and protect mutual benefits against the adverse effects of principal–principal conflicts. This study contributes to the literature by revealing the link between governance and principal–principal relationships in Chinese infrastructure PPPs and illustrating how different levels of governance mechanisms together foster the cooperative relationship between public and private parties.