Stakeholders’ expectations in utilising financial models for public-private partnership projects

Fredy Kurniawan (Civil Engineering Faculty, Narotama University, Surabaya, Indonesia)
Stephen Ogunlana (School of the Built Environment, Heriot-Watt University, Edinburgh, UK)
Ibrahim Motawa (School of the Built Environment, Heriot-Watt University, Edinburgh, UK)

Built Environment Project and Asset Management

ISSN: 2044-124X

Publication date: 28 January 2014

Abstract

Purpose

The purpose of this paper is to explore stakeholders’ expectations in utilising PPP financial models in order to ensure that each stakeholder understands the expectations of others before negotiating and reaching contract agreement by all the stakeholders.

Design/methodology/approach

Five common sets of 40 expectations have been identified through a systematic research approach, and their relative significances were verified based on pilot studies in India and the UK and expert opinion solicited worldwide through a structured questionnaire survey. The survey responses were evaluated by using statistical analyses.

Findings

The most important stakeholders’ expectations in utilising PPP financial models were identified at five different stages in a project. They are bankable (at the pre-proposal stage), assessment of project's ability to carry senior debt (at the contract negotiation stage), sensitivity analysis for key commercial issues (at the finance-raising stage), debt service evaluation towards cost overrun and other adverse events (at the construction stage), and assurance of secure operational cash flow (at the operation stage). Although some of the most important expectations are agreed on by all stakeholders, the disagreement of most important expectations should also be considered by the other stakeholder(s) in order to achieve effective and efficient negotiations.

Originality/value

The paper draws attention to stakeholders’ expectations in utilising a financial model that is arguably overlooked in evaluating PPP projects. It does so in order to speed up the negotiation process as a means of minimising cost and time expenditures on PPP contract negotiation.

Keywords

Citation

Kurniawan, F., Ogunlana, S. and Motawa, I. (2014), "Stakeholders’ expectations in utilising financial models for public-private partnership projects", Built Environment Project and Asset Management, Vol. 4 No. 1, pp. 4-21. https://doi.org/10.1108/BEPAM-04-2012-0015

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2014, Emerald Group Publishing Limited

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