Implications of the use of different payment models

Abstract

Purpose -The purpose of this paper is to illustrate the payment models and financing structures used for road Infrastructure projects under public private partnerships (PPPs) in the UK. Comparison of funding and financial structures in the selected case studies exposes the risks and values of the models of payment utilised. This research also aims to identify relationships with payment certainty and financing debt restructuring. Design/methodology/approach -The paper compares several case studies representing the evolution of private finance initiative road infrastructure in the UK context. Templates were completed using semi-structured interviews during data collection; and a qualitative content analysis approach was employed for case study analysis. Findings -Lessons learned from using different payment methods show the benefit and limitations of adopting different forms of PPP in road development. Refinancing of projects presents substantial risks to the viability of a project, and benefits gained by the private sector. Further, refinancing brings no significant benefits to the public sector as well. Practical implications -Performance of selected case studies highlights emerging issues that need to be considered when adopting a PPP procurement route in roads projects. Financial markets have supported these projects under different risk profiles and payment models. They also have the potential to play a greater part in capitalising long-term investment in road projects and increase private sector participation in infrastructure development, generating more competition and innovation. Originality/value -This paper provides case study comparison and practical implications of recent PPP developments in road provision in the UK and the evolution of public policy in the subject.

Determining critical risk factors affecting public‐private partnership waste‐to‐energy incineration projects in China

“…Second, payment risk does not show a high degree of either importance or occurrence frequency in the current study, but it appears in the other studies and is ranked fourth in Wu et al's research, possibly because of payment risk gradually fading in recent years. In PPP WTE projects, the payment criterion encourages the private sector to participate and provides value to the public sector and government with the achievement of financing innovation . Therefore, payment on time and in quantity gradually becomes achievable basic principles of government …”

“…In PPP WTE projects, the payment criterion encourages the private sector to participate and provides value to the public sector and government with the achievement of financing innovation. 53 Therefore, payment on time and in quantity gradually becomes achievable basic principles of government. 54 Finally, lack of supporting infrastructure and government credit risk are evaluated as critical risk factors by quantifying risk importance in the current study, and they are classified as medium-frequency and low-frequency risks, respectively, in Liu et al 16 's study.…”

Identification and prioritization of stage-level KPIs for BOT projects – evidence from Turkey

“…Therefore, in the feasibility stage, the risks should be identified, and these risks should be allocated to the parties that can manage these risks effectively for reducing the burden on the public sector. Besides, a successful risk management plan based on a realistic risk assessment and involving effective risk response strategies is a critical success factor and increases financial stability in BOT projects (Villalba-Romero and Liyanage, 2016b).…”

Developing a building information modeling–based performance management system for public–private partnerships

“…In the developed BPMS, the total amount of penalty is based on the comprehensive score of the project's annual performance measurement. Based on the contract for the given PPP project, the PM organizer can flexibly set the comprehensive score interval division in the system, where the different n% deduction will be applied to the availability and service performance–based payments (Villalba-Romero and Liyanage, 2016). The built-in payment calculation algorithm for the case project is shown in Tables VII and VIII.…”