Bundling/unbundling decision in PPP infrastructure projects – the case of Guwahati city, India

Abstract

Purpose

Bundled mode of public–private partnership (PPP) procurement has been a widely advocated governance structure of infrastructure delivery. The purpose of this paper is to identify the various aspects of how this bundling phenomenon has to be played out in practice and examines the implications of such decisions.

Design/methodology/approach

A longitudinal case study with an Indian municipal solid waste (MSW) PPP project provides the necessary evidence on the identification of constructs which are deemed important in the decision making of bundling in PPP MSW projects. Transaction cost economics theory, agency theory and auction theory informed the development of theoretical constructs. The longitudinal case study used interviews, observations and documents analysis.

Findings

This study has highlighted the complexity inherent in bundling decision, arising out of the relatively scanty rationale by which stakeholders first developed. Not only they are very different from the practice, but also many assumptions are proved otherwise. Poor sectoral developments, hindrances arguably caused to innovation, increase in transaction cost and a decrease in the competition along with ex post characteristics such as unfavourable transaction attributes made bundling a too early proposition to Guwahati MSW project. This study suggests that strong liability of the bundling phenomenon was the above the rationale of typical PPP bundling benefits envisaged in the extant literature. It also shows that poor practice and decision making by immature clients would lead to project failure.

Research limitations/implications

A cognitive map emerged from the study on the failure of Guwahati project. An empirical generalisation can be attempted using multiple contrasting case studies to make the theory more acceptable.

Practical implications

The case illustrated why naïve clients should not try PPPs in a bundled model. Accordingly, the developed framework would help the governments to create the right projects catalysing the bundling benefits and harness the full potential of private sector participation in future PPP projects.

Originality/value

The current study would be novel in advancing the theory of bundling in PPP projects. This would be of interest to academia and to industrial practice and policy.

Citation

Dolla, T. and Laishram, B. (2021), "Bundling/unbundling decision in PPP infrastructure projects – the case of Guwahati city, India", International Journal of Managing Projects in Business, Vol. 14 No. 2, pp. 520-544. https://doi.org/10.1108/IJMPB-05-2018-0091