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PUBLIC‐PRIVATE PARTNERSHIP CONTRACTS: A TALE OF TWO CITIES WITH DIFFERENT CONTRACTUAL ARRANGEMENTS
Author(s) -
CUNHA MARQUES RUI,
BERG SANFORD
Publication year - 2011
Publication title -
public administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.313
H-Index - 93
eISSN - 1467-9299
pISSN - 0033-3298
DOI - 10.1111/j.1467-9299.2011.01944.x
Subject(s) - bidding , contract management , business , general partnership , competition (biology) , public–private partnership , industrial organization , finance , marketing , ecology , biology
This paper analyses regulation by contract in public‐private partnerships (PPPs) for infrastructure services. Although the benefits of competition for the market and subsequent regulatory contracts are recognized, the literature also identifies contract design failures. When considering these limitations, it is useful to distinguish between contracts associated with purely contractual PPPs (concessions) and contracts for institutionalized PPPs (mixed company). Two cases from the Portuguese water sector are used to illustrate problems arising in the preparation of public tender documents: the ‘best’ bidder is often not the winner. Often, risks are not allocated correctly nor is effective monitoring ensured. Comparisons between the two types of contracts show how external regulation can be useful in mitigating contractual problems. This examination of bidding procedures and contract design yields several implications for policy‐makers; in addition, the study presents recommendations for improving regulatory contracts.