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Analysis of financial close delay in PPP infrastructure projects in developing countries

Solomon Olusola Babatunde (Department of Quantity Surveying, Obafemi Awolowo University, Ife-Ife, Nigeria)
Srinath Perera (School of Computing Engineering and Mathematics, Western Sydney University, Penrith South, Australia)

Benchmarking: An International Journal

ISSN: 1463-5771

Article publication date: 7 August 2017



The presence of previous awarded public-private partnership (PPP) infrastructure projects that significantly delays reaching financial close constrain the likely success of new PPP projects. However, effort at investigating financial close delays of PPP projects through empirical studies by the research community received scant attention. Thus, the purpose of this paper is to identify and assess the factors causing delays in PPP projects from reaching financial close in developing countries.


The study adopted literature review and questionnaire survey. In order to capture a broad perception, a questionnaire survey was adopted, which was administered to three different primary stakeholder categories comprised public sector authorities (i.e. ministries, department, and agencies), concessionaires, and lenders/banks already involved in PPP infrastructure projects implementation in Nigeria. The data obtained were analysed using mean score, Kruskal-Wallis test, and factor analysis.


The study revealed the mean score ranking of 39 identified causes of financial close delays in PPP projects, and the mean score values for all the identified 39 causes of financial close delays are very high. The study, through factor analysis, categorised the 39 identified causes of financial close delays into eight principal factors. The factors are: decreased bankability of PPP projects; unstable economic policy; weak financial, technical, and managerial capabilities of the concessionaires; weak public institutions; lack of creditworthiness of both the project sponsors and active partner; unfavourable economy of the host country; weak legal and unfavourable environment; and high contingent liabilities, respectively.

Practical implications

The identification and evaluation of the factors delaying PPP projects development from reaching financial close in a reasonable time manner would be useful for PPP primary stakeholders to develop strategies to safeguard the present and future PPP projects implementation in developing countries.


The study findings would be useful for both policymakers considering PPP projects and private investors seeking to finance PPP projects in developing countries. This study is crucial as not many empirical studies have been conducted in developing countries.



Babatunde, S.O. and Perera, S. (2017), "Analysis of financial close delay in PPP infrastructure projects in developing countries", Benchmarking: An International Journal, Vol. 24 No. 6, pp. 1690-1708.



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