Life Cycle Performance Measurement in Public–Private Partnership Infrastructure Projects

Kim, Soo Yong; Thuc, Le Dinh

doi:10.1061/(asce)is.1943-555x.0000639

Cited by 13 publications

(10 citation statements)

References 47 publications

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“…These conditions have evoked the government to manipulate the PPP projects and influence their inherent characteristics (Hughes et al, 2015;Rohman, 2022). Meanwhile, performance measurement defects are declared the root cause of failure in PPPs and are considered a crucial factor that should be considered for the PPPs' success (Liu et al, 2015b;Yong Kim and Thuc, 2021).…”

Section: Literature Reviewmentioning

confidence: 99%

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Evaluating and optimizing performance of public–private partnership projects using copula Bayesian network

Ghorbany

Yousefi

Noorzai

2022

ECAM

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PurposeBeing an efficient mechanism for the value of money, public–private partnership (PPP) is one of the most prominent approaches for infrastructure construction. Hence, many controversies about the performance effectiveness of these delivery systems have been debated. This research aims to develop a novel performance management perspective by revealing the causal effect of key performance indicators (KPIs) on PPP infrastructures.Design/methodology/approachThe literature review was used in this study to extract the PPPs KPIs. Experts’ judgment and interviews, as well as questionnaires, were designed to obtain data. Copula Bayesian network (CBN) has been selected to achieve the research purpose. CBN is one of the most potent tools in statistics for analyzing the causal relationship of different elements and considering their quantitive impact on each other. By utilizing this technique and using Python as one of the best programming languages, this research used machine learning methods, SHAP and XGBoost, to optimize the network.FindingsThe sensitivity analysis of the KPIs verified the causation importance in PPPs performance management. This study determined the causal structure of KPIs in PPP projects, assessed each indicator’s priority to performance, and found 7 of them as a critical cluster to optimize the network. These KPIs include innovation for financing, feasibility study, macro-environment impact, appropriate financing option, risk identification, allocation, sharing, and transfer, finance infrastructure, and compliance with the legal and regulatory framework.Practical implicationsIdentifying the most scenic indicators helps the private sector to allocate the limited resources more rationally and concentrate on the most influential parts of the project. It also provides the KPIs’ critical cluster that should be controlled and monitored closely by PPP project managers. Additionally, the public sector can evaluate the performance of the private sector more accurately. Finally, this research provides a comprehensive causal insight into the PPPs’ performance management that can be used to develop management systems in future research.Originality/valueFor the first time, this research proposes a model to determine the causal structure of KPIs in PPPs and indicate the importance of this insight. The developed innovative model identifies the KPIs’ behavior and takes a non-linear approach based on CBN and machine learning methods while providing valuable information for construction and performance managers to allocate resources more efficiently.

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Section: Literature Reviewmentioning

confidence: 99%

“…Meanwhile, performance measurement defects are declared the root cause of failure in PPPs and are considered a crucial factor that should be considered for the PPPs’ success (Liu et al. , 2015b; Yong Kim and Thuc, 2021).…”

Section: Literature Reviewmentioning

confidence: 99%

Evaluating and optimizing performance of public–private partnership projects using copula Bayesian network

Ghorbany

Yousefi

Noorzai

2022

ECAM

View full text Add to dashboard Cite

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“…PPP is a model in which the government and private sector cooperate to provide infrastructure products and services in the form of franchise (Li et al, 2020;Shrestha et al, 2017a, b). The model has become a powerful tool for promoting the efficiency and quality of infrastructure project construction and operation (Kim and Le Dinh, 2021;Pellegrino, 2021;Song et al, 2018). However, PPP also faces great challenges in its application, and some projects encounter great problems or even fail.…”

Section: Introductionmentioning

confidence: 99%

“…, 2017a, b). The model has become a powerful tool for promoting the efficiency and quality of infrastructure project construction and operation (Kim and Le Dinh, 2021; Pellegrino, 2021; Song et al. , 2018).…”

Section: Introductionmentioning

confidence: 99%

Bargaining optimization model for risk renegotiation with fairness concerns in infrastructure PPP projects

Chen

Wang

et al. 2022

ECAM

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PurposeReasonable risk sharing is the key to the smooth implementation of infrastructure public-private partnership (PPP) projects and the optimization of benefit distribution among the participants. This study aims to explore the risk redistribution ratio between the government and the private sector under different degree of fairness concern.Design/methodology/approachRenegotiation is a mechanism to provide flexibility and make up for incompleteness of PPP contracts. However, the threshold value of risk redistribution ratio and negotiation cost are not explicitly considered in previous studies. In addition, these studies do not consider the influence of the fairness concern psychology on the negotiation process. To address these gaps, based on risk-income equilibrium analysis, this paper established the bargaining optimization model of PPP projects renegotiation considering the fairness concerns of the negotiating parties. Furthermore, this study analyzed the influence of fairness concern degree on negotiation thresholds, negotiation results, and negotiation incomes under three scenarios.FindingsThe results showed that excessive focus on the fairness of incomes may exclude the risk redistribution ratio that is most beneficial to project incomes from the negotiation threshold. Moreover, the increase in the fairness concerns of negotiating parties can reduce the negotiation success period, but the net income may not necessarily be improved.Originality/valueThe main contribution of this paper is to propose a new risk renegotiation methodology based on the risk-income equilibrium analysis, which is helpful to develop risk management strategies in the construction field. The research results can provide government with reference about renegotiation in decision making and provide theoretical support for the practice of PPP renegotiation.

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“…Recently, the PPP projects have entered a rapid development stage (Yong and Thuc, 2021). The marketization of PPP projects has put the private sector in an active state and accelerated the allocation of resources from the private sector to the market (Hueskes et al, 2017), which plays a key role in solving the budget shortage for local governments and resolving the crisis of their debts (Erridge and Greer, 2002;Cheng et al, 2016;Xu and Zou, 2021).…”

Section: Introductionmentioning

confidence: 99%

Water environment treatment PPP projects optimal payment mechanism based on multi-stage dynamic programming model

Cao

et al. 2022

ECAM

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PurposeThe optimal payment in the whole operation and maintenance period of water environment treatment PPP projects has become the main approach to realize sustainable development of projects. This study is aimed at constructing an effective payment model for the whole life period of projects to achieve win-win among all stakeholders, so as to provide a theoretical reference and managerial implications for the public sector in the whole operation and maintenance period.Design/methodology/approachIn the whole operation and maintenance period of water environment treatment PPP projects, this article investigates how the public sector optimizes the payment in the whole operation and maintenance period of projects. Firstly, the projects' whole operation and maintenance period is divided into several stages according to the performance appraisal period. And then, the multi-stage dynamic programming model is constructed to design the payment construct model for the public sector in each performance appraisal stage. The payment from the public sector is the decision variable, and the deduction from the private sector is a random variable.FindingsThe optimal payment model showed that the relatively less objective weight of public sector leaded to its relatively more total payment and vice versa. Therefore, the sustainable development of the projects can only be ensured when the objective weights both of them should be balanced. Additionally, the deduction from the performance appraisal of private sector plays an important role in the model construction. The larger deduction the private sector undertakes, the smaller profits private sector has. Since the deduction at each stage is a random variable, the deduction varies with the different probability distributions obeyed by the practical deduction in each stage.Research limitations/implicationsThe findings from this study have provided theoretical and application references, and some managerial implications are also given. First, the improvement of the pricing system of public sector should be accelerated. Second, the reasonable profit of the private sector must be guaranteed. While pursuing the maximization of social benefits, the public sector should make full use of the price sharing mechanism in the market and supervise the real income situation of the private sector. Third is increasing the public to participate in pricing. Additionally, it is a limitation that the deduction is assumed to conform to a uniform distribution in this study. Other probability distributions on deduction can be essentially further sought, so as to be more line with the actual situation of the projects.Originality/valueThe optimal payment in whole operation and maintenance period of the projects has become an important issue, which is a key to project success. This study constructs a multi-stage dynamic programming model to optimize payment in the whole period of projects. Additionally, this study adds its value through deeply developing the new theories of optimal payment to more suitable for the practical problems, so that to optimize the design of payment mechanism. Meanwhile, a valuable reference for public and private sectors is provided to ensure the sustainable development of the projects.

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Life Cycle Performance Measurement in Public–Private Partnership Infrastructure Projects

Cited by 13 publications

References 47 publications

Evaluating and optimizing performance of public–private partnership projects using copula Bayesian network

Evaluating and optimizing performance of public–private partnership projects using copula Bayesian network

Bargaining optimization model for risk renegotiation with fairness concerns in infrastructure PPP projects

Water environment treatment PPP projects optimal payment mechanism based on multi-stage dynamic programming model

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