Professional Documents
Culture Documents
Dr. P. V. Akalkotkar
Adjunct Professor
M. Tech. (CEM), Ganpat University, Ahmedabad, India
Abstract
This paper describes the findings from twenty interviews conducted in Gujarat and thirty-five interviews conducted in Hong
Kong and Australia with experts involved with Public Private Partnership (PPP) projects. The data of these twenty five
interviews of Hong Kong and Australia are collected from Esther Cheung (2009) with her prior permission. The findings from
these interviews were analysed according to the perspectives of the public sector, private sector and researchers. Within each of
these categories, the findings from Gujarat, Hong Kong and Australian interviewees were further compared. Many studies have
been done on PPP but there is very less information on the value for money, positive and negative factors for PPP projects
undertaken in road projects in Gujarat. The present chapter makes an attempt to identify and analyse these factors for PPP ro ad
projects in Gujarat. The paper specifically considers weather Public Private Partnership (PPP) should be used to procure highway
projects in Gujarat by analysing the negative factors for adopting PPP. A questionnaire was conducted with industrial
practitioners in Gujarat. The respondents were requested to rank the importance of thirteen negative factors for adopting PPP in
highway sector.
Keywords: PPP Projects, Negative Factors for PPP, Questionnaire survey, ANNOVA analysis, Chi -square analysis
________________________________________________________________________________________________________
I. INTRODUCTION
Pertaining to limitations in public funds needed to finance the required investment and the need to draw on the experience of the
private sector in order to improve the quality and efficiency of public services, such PPP agreement has been propelled. PPP
provide a chassis to work together for both public and private sectors in order to improve the purveying of public services
through the provision of infrastructure and related ancillary services for the development of infrastructure projects. PPP provides
transparent and competitive mechanisms that procreate the ideas, experience and skills of both sectors to meet innovative
solutions to community needs, expectations and hopes to purs ue development. An empirical questionnaire survey was conducted
in Gujarat (India). The survey respondents were asked to rate thirteen negative factors which influence the PPP projects.
There has been tremendous increase in liaison between private and public sectors for the operation and development of
infrastructure. Pertaining to limitations in public funds needed to finance the required investment and the need to draw on t he
experience of the private sector in order to improve the quality and efficiency of public services, such PPP agreement has been
propelled. PPP is a generic term for a variety of procurement methods that are alternatives to traditional procurement method s.
PPP refers to the participation of the private sector in the provision of public services. Public Private Partnerships offer a unique
and innovative method of involving the private sector in the nation building activity and in accelerating the delivery of pub lic
goods and services of high quality through joint enterprises, without spreading the limited available resources too thin. The
Eleventh Five Year Plan has estimated that in order to sustain the envisaged high annual growth rate, the investments in the
infrastructure sector will have to be of massive proportions. It would be impo ssible for the public sector to meet such huge
commitments in view of its limited capability for additional capital mobilization. The anticipated shortfall of at least 30 p ercent
of the estimated total plan requirements, which itself will be of a huge magn itude will have to be met by seeking active private
sector involvement in the development of the infrastructure sector. Public Private Partnership (PPP) will be an attractive op tion
in meeting this challenge [29].
The need for public-private partnerships in infrastructure has now become widely accepted. Inaugurating a workshop on PPPs
in Infrastructure Industries and Regulation held on April 10-11, 2006, Mr. Montek Singh Ahluwalia, Deputy Chairman, Planning
Commission, argued that this was mainly because of the greater efficiency with which private investors manage risks.
Governments
can raise funds in a variety of ways, but public entities tend to under-price risks and consequently levy low, insufficient and
unsustainable user charges for public services; private investors on the other hand are better equipped to assess market risks and
to anticipate changing needs, and respond with appropriate solutions. Injection of private capital and management with superi or
technologies leads to more efficient utilisation of resources thus releasing public finances for alternative uses. Mr Francisco da
Camera Gomes, Head of the Delegation of the European Commission to India, Bhutan and Nepal, noted the need for learning
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Negative Factors Adopting Public Private Partnership for Highway Projects: A Case Study of Gujarat
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from international experience for policy making and drew attention to the EU India Economic Cross -Cultural Program that has
provided an opportunity for interactions between European and Indian civil society organizations [25].
Due to the growing gap between the financial needs and the available budget, gov ernments around the world try the
cooperation of the private sector in the construction of road infrastructure necessary to get through innovative approaches s uch as
public - private partnerships. The PPP allows the optimal use of the skills and activities in the implementation of the project, in
addition to sharing the risks and rewards of the operation involved, both public and private organizations. While the public sector
usually retains ownership in the structure retains the private sector decision rig hts is granted under development and project
management, as well as earn a reasonable return for an agreed period . The coalescing of entrepreneurship, management skills
and financial astuteness of the private sector with social responsibility, environment al awareness and local knowledge of the
public sector PPP should culminate in a better value for the public.
PPP projects are usually long-term concession contracts, which the expenditure is clearly how the quality of service and
measurable performance standards that indicate a direct relationship with the users of such projects based on. These agreements
authorize the licensee usually public property to be used for the construction of infrastructure projects. The dealer also ha s the
power to encroach fees from users for the use of public goods. However, the government remains responsible and accountable
for the provision of services to users. These projects therefore require close monitoring by the government to ensure that th e
provisions of the respective concession agreements and laws are enforced. In the management of a PPP project, the government
should ensure that the services satisfy the users for the agreed time, cost, quality and quantity. It is hence obligatory to have a
well-defined institutional structure adopted effectively to chaperon the contract. For this purpose, the requirements of the
monitoring and enforcement of the contract terms must be understood and addressed in relation to each concession contract. Th e
findings presented in this paper are part of a PhD research thesis, Model for PPP in Highway Projects.
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Negative Factors Adopting Public Private Partnership for Highway Projects: A Case Study of Gujarat
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Fig. 2: Number of years of working experience in Road sector for all respondents
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Negative Factors Adopting Public Private Partnership for Highway Projects: A Case Study of Gujarat
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described previously was used to calculate the mean score for each factor, which was then used to determine its relative ranking
in descending order of importance. These rankings made it possible to triangulate the relative importance of the factors to t he
respondents from India/Gujarat, Hong Kong and Australia as presented in Esther Cheungs survey (2009).
Analysis of Variance (abbreviated as ANOVA) is an extremely useful technique concerning researchers in the field of
economics, biology, management and other disciplines . This technique is used when multiple sample cases are involved. In this
paper three different cases of Gujarat, Hong Kong and Australia was involved.
Now before using the data for further analysis with the help of one tail ANOVA the validation of data is performed and the
output is mentioned in Table I and II
Table - 1
ANOVA Analysis Output-1 for Negative Factors of PPP
Factors
Count
Sum
Average
Variance
64
194
3.0312
1.491071
64
219
3.4218
2.279514
64
173
2.7031
1.862847
64
197
3.0781
2.0096
64
226
3.5312
1.5863
64
162
2.5312
1.4275
64
179
2.7968
1.1485
64
194
3.0312
1.7450
64
176
2.7500
1.4920
64
169
2.6406
1.8211
64
161
2.5156
1.4918
64
150
2.3437
1.6259
64
152
2.3750
1.5396
Table - 2
ANOVA Analysis Output-2 for Negative Factors of PPP
Source of Variation
SS
df
MS
F
P-value
Between Groups
107.233
12
8.936098
Within Groups
1355.844
819
1.655487
Total
1463.077
831
5.397867
7.18E-09
F critical
1.763988
As mentioned in Table II for 12 degree of freedom (df) the F value is greater than F critical value, which shows that the
assessment by the respondents within each group on their rankings of negative factors is consistent. This finding ensures tha t t h e
completed questionnaires were valid for further analysis .
As shown in Table III Chi square analysis for 64 respondents of Gujarat, with 34 respondent of Hong Kong and 11
respondents of Australia was conducted. According to 12 degree of freedom and 0.05 level of significance, the critical value of
Chi-square were 21.026 for both groups the computed Chi-square values were all above the critical value of Chi-square (115.95
and 144.83 respectively). Therefore the assessment by the respondents within each group on their rankings of negative factors is
proved to be consistent, so data is accepted.
Table - 3
Chi square analysis for negative factors of PPP
Gujarat
Gujarat
Chi square Analysis
Hong Kong Australia
No. of survey respondents
64 & 34
64 & 11
Chi square value
115.95
144.83
21.026
21.026
12
12
Level of Significance
0.05
0.05
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Negative Factors Adopting Public Private Partnership for Highway Projects: A Case Study of Gujarat
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V. CONCLUSION
A Thirteen negative factors for adopting PPP were rated by the survey respondents. The top five negative factors ranked by
Gujarat respondents included:
1) Higher charge to the direct users;
2) High risk relying on private sector;
3) Lengthy delays because of political debate;
4) Reduce the project accountability; and
5) High project cost.
It was also found that in general these negative factors were rated higher by Gujarat respondents. It can thus be interpreted that
the Hong Kong and the Australian respondents found that these negative factors were less of a challenge. This finding is logical
as discussed previously Australia is much more experienced in delivering PPP projects compared to Gujarat.
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