Revenue-risk-sharing approaches for public-private partnership provision of highway facilities

2018 ◽  
Vol 6 (4) ◽  
pp. 439-448 ◽  
Author(s):  
Omid M. Rouhani ◽  
Richard R. Geddes ◽  
Wooseok Do ◽  
H. Oliver Gao ◽  
Arash Beheshtian
Keyword(s):  
Risk Sharing ◽  
Public Private Partnership ◽  
Private Partnership ◽  
Highway Facilities

scholarly journals MACROECONOMIC ASPECTS OF PUBLIC-PRIVATE PARTNERSHIP

TEME ◽  
2021 ◽  
pp. 367
Author(s):  
Aleksandar Đorđević ◽  
Biljana Rakić
Keyword(s):  
National Economy ◽  
Risk Sharing ◽  
Economic Benefits ◽  
Public Private Partnership ◽  
Potential Contribution ◽  
Public And Private ◽  
Private Partnership ◽  
Macroeconomic Impacts ◽  
Financing Infrastructure ◽  
Benefits And Costs

Public-private partnership (PPP) has been getting momentum in market economies since the 1990s. Originally, it was created as a way of financing infrastructure projects, but its application since then has covered areas such as education, healthcare, high technology and many others. As the bulk of research in the domain of PPP is on the microeconomic impact and the analysis of the success of concrete PPP projects, the aim of this paper is to integrate these findings into a broader framework depicting macroeconomic aspects of public-private partnership. The existing literature, although not as extensive, points to several aspects that may affect economic development on the local, regional, and national levels, with greater adoption of PPP projects and their implementation. The paper introduces explanations for the elements of risk sharing between public and private partners, economic benefits, and costs in PPP, as well as the specific PPP channels of influence on the national economy and the PPP system dynamic model. One of the objectives is the analysis of the existing concept for estimating macroeconomic impacts of PPP, which could be used for evaluating its potential contribution to the growth and development of the national economy. 

Using of PPP mechanisms in rural social sphere: domestic and foreign experience

2020 ◽  
pp. 46-54
Author(s):  
Elena Ivanovna Semenova ◽  
Vladimir Gennadievich Novikov
Keyword(s):  
Rural Areas ◽  
Risk Sharing ◽  
Public Private Partnership ◽  
Private Partnership ◽  
Minimum Income ◽  
Social Sphere ◽  
The Social ◽  
Wear And Tear ◽  
High Degree ◽  
Guaranteed Minimum Income

The article shows the importance of using the public-private partnership mechanism for the development of the social sphere of the village. Review of PPP implementation by countries G20 showed different legal approaches in PPP implementation, parallel use and concessions, and agreements, application of guaranteed minimum income and risk sharing among participants, use of different PPP support measures. The presented results of the questionnaire indicate the largest use of PPPs in housing and communal services — 272 projects (81.68 %), which is due to the high degree of wear and tear in water and heat supply, in education — 22 projects (6.61 %), mainly the construction of preschool institutions, school repairs, in the field of sports and tourism 14 projects (4.2 %) — the construction of sports grounds and stadiums, sports centers, 10 projects (3 %). Public-private partnership projects in the social sphere of rural areas are less marginal, their financing is associated with significant difficulties due to the heterogeneity of demand, the difficulty of forecasting consumer demand and assessing social effect. The development of public-private partnerships is constrained by the lack of necessary budget funds to ensure the minimum guaranteed income of a private partner, the duration and complexity of maintaining procedures.

scholarly journals PRINSIP PROPORSIONALITAS DAN GOVERNANCE TERHADAP ALOKASI DAN TRANSFER RISIKO DALAM SKEMA KERJASAMA PUBLIC-PRIVATE PARTNERSHIP (PPP)

Yuridika ◽  
2017 ◽  
Vol 32 (3) ◽  
pp. 541
Author(s):  
Yuniarti Yuniarti ◽  
Fifi Junita
Keyword(s):  
Risk Sharing ◽  
Public Private Partnership ◽  
Government Support ◽  
Risk Allocation ◽  
Infrastructure Development ◽  
Transfer Scheme ◽  
Private Partnership ◽  
Force Majeure ◽  
The Government ◽  
High Level

The high level of Foreign Direct Investment (FDI) is also supported by the availability of infrastructure to the remote area where the investment will be implemented. However, with limited funds from both APBN and APBD, infrastructure development can not be fully done by the government. Therefore, the government will cooperate with the investor (private) in the implementation of infrastructure development known as public private partnership. The main problem in implementing PPP is the allocation of risk to PPP projects. The different bargaining positions between the government and the private sector resulted in the fact that most of them impose risks on private parties (private). Implementation of PPP is closely related to the emergence of various risks including and not limited to regulatory risks, force majeure, etc. If there is no risk allocation arrangement proportionally based on governance principles, it weakens the pattern of PPP cooperation in Indonesia. PPP as one form of risk sharing in infrastructure investment should not release the role and government support to private parties / investors. Even in practice, PPP implementation in Indonesia only relies on BOT (Build Operate and Transfer) scheme which is expected to minimize government support in project implementation. This will ultimately lead to project failure.

scholarly journals GOVERNMENT SUBSIDIES IN PUBLIC-PRIVATE PARTNERSHIP PROJECTS BASED ON ALTRUISTIC THEORY

2020 ◽  
Vol 24 (3) ◽  
pp. 153-164
Author(s):  
Yinglin Wang ◽  
Ruolan Gao ◽  
Bon-Gang Hwang ◽  
Jicai Liu
Keyword(s):  
Risk Sharing ◽  
Public Private Partnership ◽  
Principal Agent ◽  
Principal Agent Theory ◽  
Private Partnership ◽  
The Sustainable Development ◽  
Government Subsidies ◽  
Agent Theory ◽  
Incentive Strategies ◽  
Private Investors

Nowadays, the public-private partnership (PPP) scheme has been widely adopted in infrastructure projects around the world. In PPP projects, the governments participate as a principal and the investors play the role of an agent, and therefore their behaviours and incentive strategies can be explained and designed by the principal-agent theory. As “economic men” with limited rationality, both the governments and the investors have altruistic preferences during cooperation. This paper studies how project participants’ altruistic preferences affect government subsidies based on the principal-agent theory. To this end, a principal-agent model in the presence of altruism is developed. The results show that the amount of government compensation is related to the altruistic preferences, the expected revenue, costs and investors’ efforts. Contrary to intuition, the governments’ altruism actually undermines the investors’ enthusiasm in cooperation and the risk-sharing propensity, although it increases the utilities of both parties. Moreover, when selecting the investors, governments should examine their operating capacity carefully, which has a significant impact on the sustainable development of the projects and even PPP arrangements. The findings contribute new insights into the development of incentive mechanisms between governments and private investors from the perspective of the behavioural preferences.

Problems of development of tourist startups at the current stage: the financial aspect

2014 ◽  
Vol 8 (9) ◽  
pp. 128-139
Author(s):  
Анна Силаева ◽  
Anna Silaeva
Keyword(s):  
Venture Capital ◽  
Small Businesses ◽  
Risk Sharing ◽  
New Technologies ◽  
Critical Role ◽  
Public Private Partnership ◽  
Tourism Industry ◽  
Public And Private ◽  
Private Partnership ◽  
Start Ups

This article discusses the problematic issues of financing and development of tourism startups at the present stage in terms of financial instability. Under the tourist startup understood is a project focused on the sale of tickets for transport which is associated with travel or hotel rooms, or both, as well as traditional designs for the sale of package tours. The paper describes the case for the conceptual provisions of financing for small businesses in the tourism industry, in particular, with the help of venture capital, which effectively supports the small businesses’ innovative sector and solves the problem of the introduction of new technologies, as well as the peculiarities and directions of its development in modern conditions. Typically, venture capital plays a critical role in the commercialization of the companies at the early stages, and complement government grants only increase the chances of success, as evidenced by studies of the Russian Venture Capital Association. However, the Russian venture industry is largely focused on investments in companies at later stages of development. Identified is the necessity of initiatives to support start-ups in the form of the public-private partnership (PPP). The key issue in the implementation of such projects is the complexity of structuring start-ups, as a public-private partnership - a long-term mutually beneficial cooperation of public and private partners to carry out projects in order to achieve the objectives of public law entities, improving the availability and quality of public services, achieved through leveraging private resources and risk sharing between partners.

scholarly journals CRITICAL ORGANIZATIONAL SUCCESS FACTORS FOR PUBLIC PRIVATE PARTNERSHIP PROJECTS – A COMPARISON OF SOLICITED AND UNSOLICITED PROPOSALS

2015 ◽  
Vol 21 (2) ◽  
pp. 131-143 ◽  
Author(s):  
Sungmin Yun ◽  
Wooyong Jung ◽  
Seung Heon Han ◽  
Heedae Park
Keyword(s):  
Risk Sharing ◽  
Success Factors ◽  
Project Success ◽  
Public Private Partnership ◽  
Mitigation Strategies ◽  
Organizational Success ◽  
Private Partnership ◽  
Project Participants ◽  
The Impact ◽  
Practical Recommendations

Public Private Partnership (PPP) projects are typically initiated through solicited or unsolicited proposals. The difference between the processes according to the proposal mode often leads to different levels of involvement and responsibilities for the public and private sectors. However, no robust research exists to capture the differences, depending on the proposal mode, in the roles and involvement of project participants and the impact of those differences on project success. This study intends to explore the critical organizational success factors contributing to the success of PPP projects according to the proposal mode and to provide practical recommendations for project success from organizational perspectives. To assess the factors, 141 questionnaire surveys were conducted with participants in 32 PPP projects. The major findings indicated that “Project Implementation Capability” had the most critical influence on solicited projects, whereas “Risk Sharing and Mitigation Strategies” was the most significant in unsolicited projects. In addition, “Interorganization Coordination” among project participants was essential to the success for both solicited and unsolicited projects. Government roles and involvement were also critical, although their contributions were relatively less important than other critical organizational success factors. Based on the findings, practical recommendations were provided for the success of solicited and unsolicited projects.

scholarly journals Public-Private Partnership in Water Supply of DKI Jakarta

2020 ◽  
Vol 4 (1) ◽  
pp. 109
Author(s):  
Putri Permata Oktaviani ◽  
Entang Adhy Muhtar ◽  
Nina Karlina
Keyword(s):  
Risk Sharing ◽  
Public Private Partnership ◽  
Provincial Government ◽  
Clean Water ◽  
Cooperation Agreement ◽  
Public Interests ◽  
Private Partnership ◽  
The Public ◽  
The Impact ◽  
Unclear Risk

Drinking-Water Company (PAM) Jaya as a regional company is responsible for supply clean water in DKI Jakarta, is demanded to conduct partnerships with the private sector, namely PT Palyja and PT Aetra Air Jakarta. After the partnership, there are still many people who do not have access to clean water services. The purpose of this study is to find out and analyze the implementation of the Public-Private Partnership implemented by PAM Jaya and private partners in the supply of clean water in DKI Jakarta. The research method used qualitative research methods.  The theory used is the utilization of the Public-Private Partnership proposed by Emanual Savas (2000) which consists of roles and functions, competition, regulation, risk, procurement, and financing. The results of this study the implementation of the Public-Private Partnership in the supply of clean water in DKI Jakarta has not been effective because of the failure to fully utilize the Public-Private Partnership. The absence of competition and procurement processes between partners, the absence of regulations referred to so that the impact on the Cooperation Agreement (PKS) did not reflect public interests. There were roles and functions of PAM Jaya and private partners that were not conducted, unclear risk-sharing and compensation to private partners were more giving loss to the PAM Jaya, resulting in a shortfall. The author suggests that the PKS contract is needed, also the Provincial Government of DKI Jakarta needs to issue strict and clear regulations, improve services to the public, and no longer use the form of concession cooperation. 

scholarly journals Tripartite Risk Game Analysis on Public Private Partnership Projects of High-Speed Rail from the Perspective of Bank

2020 ◽  
Vol 10 (5) ◽  
pp. 617-623
Author(s):  
Xing Yang ◽  
Kehu Tan
Keyword(s):  
Risk Sharing ◽  
High Speed ◽  
Evaluation Method ◽  
Risk Preference ◽  
Public Private Partnership ◽  
Evaluation Index System ◽  
Deterrent Effect ◽  
Fuzzy Evaluation ◽  
High Speed Rail ◽  
Private Partnership

The bank is a leading funder and a primary risk bearer in public private partnership (PPP) projects of high-speed rail (HSR). This paper explores the risk sharing of HSR PPP projects among three parties: the public sector, the private sector, and the bank. From the perspective of the bank, a comprehensive risk evaluation index system (EIS) was established, involving 37 risk factors in 4 stages. Meanwhile, the fuzzy evaluation method was used to calculate the center of gravity (COG) values. On this basis, a tripartite static game model was established based on risk preference. Then, the equilibrium point set of risk sharing was summarized by analyzing the payment matrix of the game. The results show that the bank-oriented comprehensive EIS for the risks in HSR PPP projects can effectively reduce the bank’s capital risk, and the reasonable risk sharing among the three parties is greatly affected by the game mechanism based on risk preference and deterrent effect.

Option Value of Contingent Finance Support in Transportation Public–Private Partnership Projects

2020 ◽  
Vol 2674 (7) ◽  
pp. 555-565
Author(s):  
Yunping Liang ◽  
Baabak Ashuri
Keyword(s):  
Cash Flow ◽  
Risk Sharing ◽  
Construction Cost ◽  
Public Private Partnership ◽  
Option Value ◽  
Short Term ◽  
Highway Projects ◽  
Private Partnership ◽  
Proposed Model ◽  
Debt Repayment

Uncertainties about construction cost and operational revenues are two major risks in transportation public–private partnership (P3) projects. These uncertainties put projects at risk of being unable to fulfill annual debt repayment obligations. When a project generates insufficient cash flow to service the debt in a certain year, it normally has to go for short-term financing by borrowing short-term loans. With the help of revenue risk-sharing mechanisms, supported projects may be able to get rid of unexpected interest disbursement. The objectives of this paper are twofold: ( 1 ) evaluate the refinancing cost of P3 highway projects caused by cash flow shortage; and ( 2 ) critically examine the option value of contingent finance support and compare it with the option value of minimum revenue guarantee on saving refinancing cost for debt repayment. An integrated real options valuation model is created that utilizes utility method for pricing the technical project risk (e.g., construction cost overruns), and utilizes a risk-neutral option pricing method for pricing the market risk (e.g., future traffic). The proposed model has good transferability in relation to involving various risk factors, no matter technical risks or market risks, random variables or random processes. The proposed model helps stakeholders better understand and measure the burden of assuring annual debt repayment under uncertain cash flow. The stakeholders can use the proposed model to evaluate the value of the revenue risk-sharing mechanisms on reducing refinancing cost.

scholarly journals Influencing Factors on Profit Distribution of Public-Private Partnership Projects: Private Sector’s Perspective

2018 ◽  
Vol 2018 ◽  
pp. 1-10 ◽  
Author(s):  
Jing Du ◽  
Hongyue Wu ◽  
Lei Zhu
Keyword(s):  
Private Sector ◽  
Influencing Factors ◽  
Risk Sharing ◽  
Public Private Partnership ◽  
Public And Private ◽  
Private Partnership ◽  
Effort Level ◽  
The Public ◽  
Profit Distribution ◽  
Management Ability

As an important issue in the public-private partnership (PPP) projects, the profit distribution has a critical impact on both the public and private sectors. Moreover, the influence of the private sector on the profit distribution of PPP projects cannot be ignored because the private sector are the implementers of PPP projects and responsible for the life-cycle performance and management of PPP projects. Therefore, this study aims at (1) investigating the influencing factors of the profit distribution of PPP projects from the private sector’s perspective and (2) analyzing the relationships between the factors and the profit distribution by the qualitative comparative analysis (QCA). The results first showed that the five key influencing factors on the profit distribution from the private sector’s perspective were the risk sharing, financing ability, investment, management ability, and effort level. Moreover, the results indicated that the risk sharing was the most important factor that had a positive impact on the profit distribution. Furthermore, the strong management ability and the high ratio of investment were identified as critical factors that led to a larger proportion of profits distributed to the private sector. In addition, the financing ability and the effort level of the private sector should also be considered in the profit distribution plan. The findings first contributed to the body of knowledge on the influencing factors of the profit distribution in PPP projects. In addition, this study is the first attempt of exploring the characteristics of the private sector under the context of profit distribution of PPP projects and using the QCA method to enrich the theoretical research. Thus, the findings would help the private companies improve their abilities and ensure their profits. Besides, the public and private sectors can make appropriate profit distribution proposals in practice based on the conclusion of this study.

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