The Driving Factors of China's Public-Private Partnership Projects in Metropolitian Transportation Systems: Public Sector's Viewpoint

Abstract

Abstract. In recent years, China needs far more financing for transportation infrastructure than can be provided by the government alone. Meanwhile the capacity of the Chinese government to provide public services on its own in an effective and efficient way is being questioned and reassessed at various levels. Accordingly, the involvement of private investors in the development of Metropolitan Transportation Systems (MTS) has been promoted by the Chinese public sector by means of adopting the Public Private Partnership (PPP) model. However, China's dynamic and complex political, financial, legal and regulatory environment makes the private sector adjust to accommodate the existing regime by way of understanding the driving factors in PPP applications for improving the chances of project success. This paper presents two case studies in China's MTS. Based on a case study and comprehensive literature review, 15 driving factors associated with PPP projects from the perspective of the Chinese public sector have been identified. A structured questionnaire survey targeting the public sector has been conducted to seek, analyze and integrate its perception of the driving factors. Through statistical analysis of the relative significance of each of these driving factors, the writers determined five common major dimensions of the Chinese public sector's purpose in developing PPP schemes, and the key factors that quantify each purpose. The establishment of the measures for these objectives and the key factors that quantify each of these purposes will likely be useful in encouraging private participation in infrastructure management and directing/concentrating efforts of the private sector to deliver quality public services under mutually beneficial long-term contractual arrangements.

Examining the Interrelationship among Critical Success Factors of Public Private Partnership Infrastructure Projects

“…Zhang suggested that if toll levels exceed the users' affordability for a service, public satisfaction will become poor, and the PPP project may be ruined by strong public opposition [13]. The results of Li et al, Ng et al and Aziz also provided some similar evidence for the importance of an appropriate service price in achieving the sustainability of a PPP and maintaining social stability [12,40,49]. Therefore, a reasonable service price is very important to enhance the project revenue, improve public satisfaction and maintain a sustainable partnership.…”

“…Additionally, these existing factors are good references for studying the sustainable implementation of the PPP project. Among them, all of the CSFs mainly involved four types, i.e., the public sector-related factor [11,17,29], the private sector-related factor [12,13], the environment-related factor [26,29,30] and the factor of the process of services provision [11,16,45,47,49]; these findings are also good references for determining the CSFs and questionnaire design. However, all of the previous studies determined the critical success factor for the PPP project, but the interrelationships among CSFs were ignored; and the variable of the public in PPP is also not included in the CSF framework constructed in the previous research.…”

“…The concession period (X24) negatively influences appropriate risk allocation; this is confirmed by Jin and Zuo's finding that the concession period has a significant impact on risk allocation, because a long concession period will subject service providers to the possibility of big changes in policy, demand, price and other economic condition. If an adverse impact results from any such changes, the actual PPP performance may become worse than estimates [20]; and a long concession period may hurt the social benefits of a PPP project [49]. The government's capabilities of fulfilling the contract (X23) negatively influence the concession period, which indicates that the concession period will be cut down to a reasonable duration as the government's capabilities of fulfilling the contract become better.…”

“…According to Wibowo and Alfen, favourable investment environment, economic viability, sound financial package, stable macroeconomic environment, stable political and social environment and judicious government control pertain to the macro-environment [25]. Second, Ismail suggested that the rankings of importance for many factors were mostly significantly different between the public and private sectors, and the difference affects the success of PPP implementation in Malaysia [49]. Additionally, Tang et al also suggested that stakeholder-related factors need to be considered to achieve the efficiency and effectiveness of relationships among stakeholders in PPP within the Australia context [14].…”

The Analysis of Bot Strategies Based on Game Theory – Case Study on Taiwan's High Speed Railway Project

“…Public-Private Partnership (PPP) is applied for making the long-term alliances between government and private developers for private resource and the public services (Ashuri et al 2010). PPP is considered an important means of solving the problems of insufficient funds for constructing public projects and inefficient public projects (Yuan et al 2010;Cheung et al 2010). If participating developers or private investors involved in managing public enterprises are self-disciplined and effectively organized, the abuse and degradation of common resources can be successfully prevented (Ostrom 1990).…”