Toward innovative and efficient infrastructure delivery

Mixed results have been experienced in international public-private partnerships (PPPs) in infrastructure development and there are worldwide controversy, criticism and conflicts over PPPs. A number of PPP projects have suffered disastrous consequences due to lack of knowledge and expertise in project financial evaluation, risk identification, assessment and allocation, and effective financial engineering techniques and efficient contracting methods to address incomplete information, asset specificity and opportunism. This causes significant political, social, and economic consequences to the public sector and economic losses to the private sector, with an overall impairment to the interests of the general public. This research has developed (1) an integrated general framework for the delivery of public infrastructure and services through PPPs; (2) an innovative financial evaluation methodology that reflects the characteristics of project finance, incorporates simulation and financial analysis techniques, and aims at a win-win solution for all parties involved; (3) a mathematical model to determine the appropriate length of the concession period that demarcates the rights and responsibilities between the public and private sectors in a project's life cycle; (4) a mathematical model that optimizes the concessionaire's capital structure when it is subject to various risks and financial viability requirements; and (5) a relational concession framework to build a cooperative/collaborative working environment to minimize opportunism and transaction costs. These research outputs make significant contributions to the knowledge body of public works and services provision, to overcoming various problems currently encountered, and to improving future practices in international PPPs toward innovative and efficient infrastructure and service delivery.