A Comparison of Alternative Procedures for the Selection of the Private Partner in PPP Projects

Doni, Nicola

doi:10.2139/ssrn.1129780

Cited by 12 publications

(8 citation statements)

References 14 publications

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“…Engel, Fischer and Galetovic (2006) study the rationale for private finance in PPPs. 24 They showed that private finance cannot be a means to save on distortionary taxation. Any additional $1 invested by the contractor saves society distortionary taxes but the concessionaire must be compensated for the additional investment through a longer contract term and this costs society future distortionary taxes equal to the initial tax saving.…”

Section: Private Finance Initiativementioning

confidence: 99%

“…The private finance aspect of PPPs has allowed the public sector to finance the construction of infrastructure "off the balance sheet" and to accelerate delivery of projects 24 See also the informal discussion in De Bettignies and Ross (2004).…”

Section: Private Finance Initiativementioning

confidence: 99%

“…To model this uncertainty, we follow equation (24) and the description of cost realizations that follow.…”

Section: Cost Overrunsmentioning

confidence: 99%

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The Simple Micro-Economics of Public-Private Partnerships

2008

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We build a unified theoretical framework to analyze the main incentive issues in Public Private Partnerships (PPPs) and the shape of optimal contracts in those contexts. We present a basic model of procurement in a multitask environment in which a risk-averse agent chooses unobservable efforts in cost reduction and quality improvement. We begin by studying the effect on incentives and risk transfer of bundling building and operation into a single contract, allowing for different assumptions on the contractual framework and the quality of the information held by the government. We then extend the basic model in several directions. We consider the factors that affect the optimal allocation of demand risk and their implications for the use of user charges and the choice of contract length. We study the relationship between the operator and its financiers and the impact of private finance. We discuss the trade-off between incentive and flexibility in long-term PPP agreements and the dynamics of PPP contracts, including cost overruns. We also consider how the institutional environment, and specifically the risk of regulatory opportunism, affects contract design and incentives. We conclude with some policy implications on the desirability of PPPs.JEL Classification: D8, L5, H54, H57.

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Section: Private Finance Initiativementioning

confidence: 99%

Section: Private Finance Initiativementioning

confidence: 99%

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The Simple Micro-Economics of Public-Private Partnerships

2008

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“…According to Saussier et al [25], Public-Private Agreement (where PPP is considered as an example), a final negotiation phase after the tender evaluation is useful because it allows joining the flexibility needed in such a rigorous and challenging project given the tendering mechanism. Doni [12] looked at three kinds of tendering procedures, which are the negotiation, the auction, and the competitive negotiation procedure to provide contracting authorities with guidelines to follow for designing PPP/PFI tenders. In the absence of consent between one bidder and the public sector, the competitive negotiation will give a higher expected value to the government compared to other methods.…”

Section: Fig 2 Process Flow Of Ppp/pfi Projects (3pu/ukas 2010)mentioning

confidence: 99%

Public Infrastructure Project Tendering Through Public Private Partnerships (PPP) – A Literature Review

et al. 2019

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Public Private Partnerships (PPP) in Malaysia have been inundated by various controversies and criticisms from the very beginning. Many of the constraints that occur in PPP projects is due to the failure in tendering stage. Bidding or tender for a PPP project is usually much more complex than a traditional public-sector project involving the appointment of top advisers and designers at a great fee in the preparation of detailed design, comprehensive planning, extensive bid documentation, and lengthy clarifications. These problems as being the reason behind several high-profile withdrawals during the early PPP tenders, resulting in some preferred bidders being selected by defaults as other competitors withdrew. Base on the above premise, this study attempts to propose PPP tendering process improvement in Malaysian construction industry. This paper aims at providing an overview about literature on tendering process in PPP/PFI. The objectives of the research are to identify and understand the PPP implementation practices in Malaysia; to determine issues and challenges in PPP tendering stage; and to propose PPP tendering improvement. The approach is based on the analysis of the pertinent publications on the theme. Three main interest areas can be found in the literature which is; tendering procedure, issues and challenges, and strategies that could be enhance PPP tendering process in the Malaysian construction industry.

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“…When awarding public-private agreements, the challenge is to find a way to combine the benefits of competition induced by auctions with the need for flexibility allowed by negotiation. The "competitive dialogue" procedure recently introduced in European regulation might be a way to go further in this direction (Doni 2007).…”

Section: The Information Structurementioning

confidence: 99%