Public Private Partnership for Transport Infrastructure Investment: Critical Success Factors and Lessons Learnt from Projects in the Context of Developing Countries

Abstract

Public-private partnerships (PPPs) represent an important channel that attracts the participation of private sponsors to invest in transport infrastructure systems in developing countries. PPPs are increasing as an innovative tool to remedy the lack of the dynamics of traditional investment channels of public governments and to stimulate the development of transport infrastructure via the encouragement of participation by private investors. PPP projects are established based on the cooperation rules of public and private sectors on the basic of pursuing common goals; and leveraging their joint resources regarding the competencies and strengths of each actor. However, the poor quality of collaboration mechanisms between public agencies and private organizations is considered to be one of the main causes leading to project delays and the need for unexpected renegotiations, which results in unforeseeable events beyond the control of the contractual parties. Thus, this paper focuses on reviewing the implementation of PPP projects in developing countries to provide a holistic picture of PPP contractual negotiations and identify potential risks and associated consequences during the project stages. A systematic review has been conducted and more than one hundred research papers from 2000 to 2020 have been selected for analysis and synthesis. The initial findings of this study show that political support, legal-financial risk allocation, shared authority and responsibility, communication channels, and conflict resolution are critical factors contributing to the success or failure of the collaboration mechanism between parties in PPP projects. These factors should be examined carefully during investment policy development to improve the success rate of PPP projects and attract the participation of private sector investors.