Open AccessHazard analysis on public-private partnership projects in developing Asia
Author(s) -
Minsoo Lee,
Xuehui Han,
Pilipinas Quising,
Mai Lin Villaruel
Publication year - 2020
Publication title -
journal of infrastructure, policy and development
Language(s) - English
Resource type - Journals
eISSN - 2572-7931
pISSN - 2572-7923
DOI - 10.24294/jipd.v4i1.1165
Subject(s) - bidding , general partnership , business , government (linguistics) , public–private partnership , finance , developing country , private sector , unit (ring theory) , moral hazard , hazard , public economics , economic growth , economics , incentive , marketing , market economy , linguistics , philosophy , chemistry , mathematics education , mathematics , organic chemistry
Developing Asia’s infrastructure gap results from both inadequate public resources and a lack of effective channels to mobilize private resources toward desired outcomes. The public-private partnership (PPP) mechanism has evolved to fill the infrastructure gap. However, PPP projects are often at risk of becoming distressed, or worst, being terminated because of the long-term nature of contracts and the many different stakeholders involved. This paper applies survival-time hazard analysis to estimate how project-related, macroeconomic, and institutional factors affect the hazard rate of the projects. Empirical results show that government’s provision of guarantees, involvement of multilateral development banks, and existence of a dedicated PPP unit are important for a project’s success. Privately initiated proposals should be regulated and undergo competitive bidding to reduce the hazard rate of the project and the corresponding burden to the government. Economic growth leads to successful project outcomes. Improved legal and institutional environment can ensure PPP success.