Author: Sheng, Nan
Title: A case-based study on public-private-partnership projects in the urban water supply sector
Degree: Ph.D.
Year: 2014
Subject: Municipal water supply -- Management -- China.
Public-private sector cooperation -- China.
Hong Kong Polytechnic University -- Dissertations
Department: Institute of Textiles and Clothing
Pages: xvii, 239 pages : illustrations ; 30 cm
Language: English
Abstract: This thesis points out that public-private partnership (PPP) is an effective procurement method for delivering public infrastructure, and the China government has the motivations to apply it to urban water supply projects to relieve government financial burden on constructing new and rehabilitating existing water supply infrastructure. However, it is noticed that in a partnership, the public sector and the private sector may have different expectations of the project. Therefore, more disputes are associated with PPP projects. To achieve a win-win result, the government has to consider how a regulatory regime will shape and constrain the private sector to provide more reliable service in the meantime promote credibility for attracting private capitals. Through a comprehensive literature review related to PPP and a deep investigation into the operation of water supply sector in China, the benefits of PPP and the problems faced by water supply companies are identified. The findings indicate that PPP is a favorable choice to rescue water supply companies form the dilemma. Therefore, the objective of this study is to explore how to secure the success of PPP in water supply projects for the economy as a whole. Factors that may influence decision-making in both public and private sectors have been studied. An evaluation scheme is established to reveal the differences and agreements between two sectors on considering these factors. How the interest of different stakeholders can be balanced in the partnership is discussed and concrete and workable policy recommendations are proposed to the public and private sectors. An integrated checklist of decision-making factors (DMFs) is generated by combining segment studies related to driving and impeding factors of PPP, objectives of different stakeholders, and risk and success factors of promoting PPP. These factors are obtained by means of literature review, content analysis, survey, case study, and interview. Then Delphi survey is conducted to solicit experts' views on these factors. Cronbach's alpha and Kendall's concordance analysis are performed to examine the reliability and validity of data set. Then it followed by Mann Whitney U test to generate the degree of differences between public and private sectors on evaluating the importance of each DMF. These results are employed as parameters to build the Importance-Difference Evaluation Model (IDEM). In the model, K-means algorithm is used to identify the importance boundary. With this model, all the DMFs are divided into four categories: critical DMFs, fundamental DMFs, systematic DMFs, and controversial DMFs. In accordance with the above seven steps, the DMF evaluation scheme is established.
Subsequently, this scheme is applied to a real water supply PPP project as a case-based study. It is verified that this scheme is feasible and reliable. With it, decision-makers can effectively find out the critical factors and take different approaches to deal with different categories of factors. This project gives evidences that PPP is an effective model to provide better service. The private sector has brought in desired investment and advanced management skills, and has also improved operational efficiency and service quality. Nevertheless, issues arising in the implementation of government policies will affect project profitability, and lead to disputes between the public and private sectors. To solve these disputes, a clear demonstration of influences on project profitability due to different policy choices is needed. Considering all the requirements, a policy recommendation approach is explored to provide inclusive, objective, reliable and practical solutions for both public and private sectors to effectively resolve those disputes. Policies including the adjustment of water selling price, control of groundwater exploration, reliability of water distribution network, and payment of government subsidy are all defined as adjustable parameters and input into a profit calculator developed in this study. By adjusting these parameters, the calculator will produce different net present values (NPVs). Unfeasible policy choices and unacceptable NPVs will be filtered out. Finally, the matrix of feasible policy choices and correspond NPVs will be provided to both public and private sectors to assist their decision-makings. In summary, the following original contributions of this thesis are achieved: - Integrate segment studies on DMFs and identify new DMFs related to applying PPP in the water supply projects. - Establish a seven-step DMF evaluation scheme and validate it through a real project as an effective decision-making platform for identifying critical DMFs and categorizing DMFs. - Derive feasible policy recommendations to both public and private sectors for sustaining healthy cooperation in the partnership.
Rights: All rights reserved
Access: open access

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