Risk allocation in a public–private partnership: a case study of construction and operation of kindergartens in Kazakhstan

Mouraviev, Nikolai; Kakabadse, Nada K.

doi:10.1080/13669877.2013.815650

Cited by 17 publications

(10 citation statements)

References 38 publications

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“…After analyzing the case of the Channel Tunnel project, Park and Chang [18] argued that the completion risk of PPP projects should be shared between the private sector and government. However, other studies have argued that the completion risk of PPP projects should be allocated to the private sector, which is believed to be the party that can handle this risk best [16]. Since in most cases the completion risk of PPP projects is allocated to the private sector [16], this study follows the argument that the private sector should undertake the completion risk of PPP projects.…”

Section: Literature Reviewmentioning

confidence: 96%

“…ese issues are partially caused by the unreasonable risk allocation between the private sector and government [11][12][13][14]. Based on the principle that risk should be allocated to the party that can best handle it, many studies have been conducted to investigate how to allocate different project risks reasonably between the private sector and government [12,13,15,16]. Among them, the completion risk is a critical factor that influences the success of PPP projects [17].…”

Section: Literature Reviewmentioning

confidence: 99%

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The Effect of Completion Risk and Project Profitability on the Investment Decisions of the Private Sector in PPP Projects

Geng

Zheng

Yao

2022

Mathematical Problems in Engineering

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Public-private partnership (PPP) is becoming increasingly popular around the world for the development of infrastructure. However, it is vital that the private sector knows how to make its investment decisions, especially when it bears the burden of completion risk, and the cash flow of PPP projects is hard to predict. In previous studies, completion risk and project profitability have been recognized as critical factors that influence the involvement of the private sector in PPP projects. This study further investigates how these two factors affect private sector investment decisions, including its involvement, withdrawal, and capital structure decisions. First, a continuous real option method is built to explore the investment boundary and default boundary of the private sector. The results show that an increase in completion risk does not necessarily increase the investment boundary; rather, the relationship between them depends on the degree of private sector risk tolerance. The results also indicate that the investment boundary decreases with the expected rate of return and increases with the tax rate, risk-free rate, and volatility of cash flow. The default boundary decreases with the expected rate of return and volatility of cash flow and increases with the risk-free rate. Second, by comparing two different financial arrangements, the results suggest that using debt capital can help lower the private sector’s investment boundary. Third, the results reveal the optimal debt level of private sector investment in PPP projects by showing that the optimal debt level increases with the tax rate and decreases with the default loss rate. These results can provide some managerial insights for the private sector as it makes decisions on PPP project investments. They can also provide some policy insights for governments to better promote private sector investment in PPP projects.

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Section: Literature Reviewmentioning

confidence: 96%

Section: Literature Reviewmentioning

confidence: 99%

The Effect of Completion Risk and Project Profitability on the Investment Decisions of the Private Sector in PPP Projects

Geng

Zheng

Yao

2022

Mathematical Problems in Engineering

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“…In addition to these two broad themes, the literature sheds light on a range of narrowly focused topics in the specifi c settings of a country. Th ese topics include risk management (Mouraviev and Kakabadse 2013), stakeholder value management (Mouraviev and Kakabadse 2015a), methods of PPP launch (Charman and Narbaev 2017), PPP contractual arrangements (Urio 2010;Maslova 2015), aspects of the legal and institutional frameworks (Maslova and Yushkov 2017;Soloviov 2017), and sectoral matters, such as case studies in transport, the energy sector and healthcare. Th ere is also an emergent literature that discusses PPPs that work across national borders (e.g.…”

Section: Literature Reviewmentioning

confidence: 99%

Rapid Public-Private Partnership Deployment in Kazakhstan: Enablers and Implications

Mouraviev

2021

NISPAcee Journal of Public Administration and Policy

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Public-private partnerships (PPPs) are a relatively new phenomenon in Kazakh-stan – their development began in 2005 in the transport and energy sectors. Initially sluggish growth transformed into rapid PPP deployment from 2016 to 2019 when hundreds of PPPs were launched in many industries (infrastructure, hospitals, schools), which was in sharp contrast to just a handful of PPPs formed prior to 2016. Rapid PPP deployment raised deep concerns whether the government’s supporting schemes and PPP launch procedures are appropriate and whether they may backfire for the government in the form of increasing debt. This paper aims to investigate the enablers and implications of accelerated PPP formation. The study is based on semi-structured in-depth interviews with a range of actors in the field, including PPP operators (railroad, energy company, kindergarten), regional and local governments, national and regional PPP centres, lawyers and private investors, which afforded an opportunity to mitigate bias in opinions. The study has identified three principal enablers: simplified procedures for a PPP launch, pressure exerted on regional governments, and extensive government financial support to PPPs. By making use of agency theory, property rights theory and the value-for-money concept, the paper offers a conceptualisation of rapid PPP growth in Kazakhstan in recent years and argues that growth was disproportionally fast and unintended. Policy implications include a need to re-establish the value-for-money approach to PPP formation, a significant increase in government liabilities to PPPs, and a misconception regarding the role of PPP collaborative governance.

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“…This is reflective of an increasing attempt by the researchers to interpret the phenomenon of PPP through variety of actors/stakeholders. A case in point is various studies on PPPs in Kazakhstan with the stakeholders' perspective and (Mouraviev & Kakabadse, 2014. This emphasis on interpretation has also led to Constructivist Perspective.…”

Section: Theories/perspectives Of Ppp Effectivenessmentioning

confidence: 99%

“…If the government's role is overbearing, it will reduce the role of the private party leading to serious implications for the collaborative and co-productive character of PPP (Mouraviev & Kakabadse, 2015a). On the other hand, neglect on the part of the government may lead to lots of missed opportunities for the stakeholders (Mouraviev & Kakabadse, 2014).…”

Section: Social and Relational Factorsmentioning

confidence: 99%

Effectiveness of Public Private Partnerships: A Systematic Literature Review

Ali

Irfan

Salman

2020

JMR

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Questions about the ‘effectiveness’ of Public-Private Partnerships (PPPs) have been raised for quite some time now. Although implementation and performance problems are given some attention while carrying out systematic literature review regarding PPPs, there is no systematic literature review available to the best of our knowledge that analyses/reviews the ways in which the effectiveness of PPPs is measured. This review of 107 articles intends to fill this gap by reviewing the peer-reviewed articles/papers published during the years 2000-2016. It particularly investigated three areas including (a) the ways in which the effectiveness of PPPs is defined, (b) methods used by the researchers to measure the effectiveness of PPPs, and (c) theories/perspectives explaining the effectiveness of PPPs. The results indicated that the effectiveness of PPPs is not clearly defined in the existing literature. Moreover, there is no consensus on what counts as an effective PPP. Regarding the methods of measurement, the overwhelming majority of researchers focused only on the identification of factors as opposed to the actual measurement of effectiveness. With respect to theoretical perspectives, governance theories were used in most cases. Based on the findings of this systematic literature review, it is recommended in the current research to use six broad categories of methods/factors identified as a starting point to measure the effectiveness of PPPs.

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Risk allocation in a public–private partnership: a case study of construction and operation of kindergartens in Kazakhstan

Cited by 17 publications

References 38 publications

The Effect of Completion Risk and Project Profitability on the Investment Decisions of the Private Sector in PPP Projects

The Effect of Completion Risk and Project Profitability on the Investment Decisions of the Private Sector in PPP Projects

Rapid Public-Private Partnership Deployment in Kazakhstan: Enablers and Implications

Effectiveness of Public Private Partnerships: A Systematic Literature Review

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