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Article

Yunping Liang and Baabak Ashuri

In classical perspective, projects under a certain size are not feasible for P3. However, there is an emerging trend on using P3 to deliver projects which are frequently…

Abstract

Purpose

In classical perspective, projects under a certain size are not feasible for P3. However, there is an emerging trend on using P3 to deliver projects which are frequently at small- to medium- size to meet ever-increasingly complex social needs, including enhancing lifecycle performance of existing facilities, designing and building for resilience and sustainability, ensuring cost effectiveness of public spending and fostering innovation. In contrast with the increasing implementation, small and medium P3s, especially those in the United States, receive little attention in existing studies. This study aims at answering the question: in the context of US, what features of those small- to medium- sized P3s with success records enable the selection of P3 as delivery method.

Design/methodology/approach

By critically reviewing the literature, this study synthesizes and discusses the challenges in classical perspective. The authors use a framework drawn from the transaction cost to propose two types of enabling features that could contribute to the success of small and medium P3s. The proposed enabling features are supported by case study of twelve identified small- to medium- sized P3s which have reached financial closure as of 2018 in the United States.

Findings

The results show how the identified enabling opportunities have been used in these cases to enhance the viability of the P3 model in the infrastructure market. The two types of features are high tolerance enabler explained by the expectations on indirect and non-monetary compensations, and cost reduction enablers including: (1) being in the sectors with well-established traditions on using private investments; (2) having developers with expertise on infrastructure finance; (3) being in the jurisdictions with favorable legislative environment and (4) having less-uncertain future project revenue.

Originality/value

This study, for the first time, critically examines the enabling features of the P3 model for delivering small and medium infrastructure projects in the United States. This research sheds light on the credibility and viability of small- to medium- sized P3 and increases the confidence in policy makers to promote this model.

Details

Engineering, Construction and Architectural Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0969-9988

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Article

Muhammad Ali Noor, Malik M.A. Khalfan and Tayyab Maqsood

The purpose of this paper is to report on a research thesis that investigates the role of procurement practices in effective implementation of infrastructure projects in a…

Abstract

Purpose

The purpose of this paper is to report on a research thesis that investigates the role of procurement practices in effective implementation of infrastructure projects in a developing country, i.e. Pakistan. The research investigated and explored the issues and barriers to effective implementation of different procurement methods, the environment and its suitability for implementing different forms of procurement in context of public sector in Pakistan.

Design/methodology/approach

The research was carried out in two stages in the first stage archival analysis was conducted of government documents, reports including reports by international organisations, policy documents and literature. During the second stage case studies were selected based on archival analysis. The unit of analysis is the basis for the case and for this study, it was the procurement of infrastructure projects in public sector in Pakistan and that was the boundary of the research. Eight project case studies were selected from six public sector organizations (organizational case studies). A total of 24 respondents participated from these six organisations.

Findings

The research has identified the different procurement choices and reasons for a particular choice, the issues in procurement choice and the issues in procurement implementation in the public sector organisations in Pakistan. It has also described the impact of procurement practice on successful project outcomes. As a result multiple issues have been identified which affects the choice of procurement such as the need for efficiency and finances, client objectives, timely policy decisions, clarity of clients needs, delays in bidding and response, delays in approvals, proposal and bid evaluation procedures, need for relaxation of rules and project characteristics. The major barriers and constraints to implementation of procurement have been reported to be regulatory and legal, risks and contract management, principles of procurement, political, culture, inter and intra organisational issues, conditions of the country, lack of understanding, land acquisition, project revenue and finance issues. Procurement had a direct impact on successful outcomes of the project, the procurement systems in these organisations had a direct relationship and impact on performance and success of the project.

Originality/value

As a result of this analysis a vivid big picture of road map of the ongoing processes and practice of procurement in public sector in Pakistan has been created which vividly portrays the issues and barriers of the procurement practice in Pakistan.

Details

International Journal of Managing Projects in Business, vol. 6 no. 4
Type: Research Article
ISSN: 1753-8378

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Article

Muhammad Sajid Khattak and Usman Mustafa

The complexity of projects has become a serious issue and obstacle in their successful completion. In order to overcome these complexities, it has become imperative to…

Abstract

Purpose

The complexity of projects has become a serious issue and obstacle in their successful completion. In order to overcome these complexities, it has become imperative to identify the relevant management competencies of project managers. The purpose of this paper is to address the problem of cost, time and scope in engineering infrastructure projects due to their complexities through management competencies.

Design/methodology/approach

In the first phase of the study, 32 experts were interviewed through semi-structured pre-tested questionnaire. In this phase, essential elements of complexities were identified initially. This was followed by finding required dimensions of competencies to counter these complexities and to acquire improved performance. In the final stage, required levels of competencies for specific elements of complexity were identified. In the second phase, 85 “project managers” were also approached to get feedback about their recently completed public sector engineering infrastructure projects in Pakistan.

Findings

The study identified additional dimensions, i.e. honesty, enthusiasm and dedication, in the case of competencies and adverse law and order situation, political instability, land issues, energy crisis and weak authorization of project managers in the case of complexities. Leadership, management skill, communication skill, effectiveness and result orientation were identified as top quality traits required. The study concluded that there is a significant impact of management competencies and complexities on project performance.

Originality/value

The study contributes to a better understanding of how to improve performance in complex engineering infrastructure projects through adopting management competencies. It also empirically illustrates the relations among project management competencies, complexities and project performance. Although the research is grounded on public sector infrastructure projects, its findings may also be helpful for practices in project management of other sectors.

Details

Engineering, Construction and Architectural Management, vol. 26 no. 7
Type: Research Article
ISSN: 0969-9988

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Article

Abouzar Zangoueinezhad and Adel Azar

Public-private partnership (PPP) is mutually beneficial relationships that are formed between the public and private sectors. The private-sector partner typically makes a…

Abstract

Purpose

Public-private partnership (PPP) is mutually beneficial relationships that are formed between the public and private sectors. The private-sector partner typically makes a substantial equity investment, and in return the public sector gains access to new or improved services. When properly vetted and structured, PPP allocate risk to the party best suited to handle it. The purpose of this paper is to examine the relationship between the scale and nature of the PPP's contribution as a driver of the economic growth and gross domestic product (GDP).

Design/methodology/approach

Using statistics causality modeling and relevant statistical techniques, the dynamic interactions and interdependencies over PPP and economic growth were addressed and quantified.

Findings

Although PPP can free up government resources for other public priorities, three key factors enable PPP to stimulate a country's economic growth: the number of PPP projects under way, the value of PPP projects, and the ideal type of PPP contracts in use.

Originality/value

The number, value, and type of PPP, combined with supportive policies, power economic growth. Governments with well-established and enforced policies against corruption, combined with low business transaction costs, a transparent legislative system, and exchange rate and monetary stability are far more attractive to the private sector.

Details

International Journal of Social Economics, vol. 41 no. 10
Type: Research Article
ISSN: 0306-8293

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Book part

Ernest Effah Ameyaw and Albert P. C. Chan

Allocating risk in public–private partnership (PPP) projects based on public–private parties’ risk management (RM) capabilities is a condition for success of these projects

Abstract

Allocating risk in public–private partnership (PPP) projects based on public–private parties’ risk management (RM) capabilities is a condition for success of these projects. In practice, however, risks are allocated to these parties beyond their respective RM capabilities. Too much risk is often assigned to the private or public party, resulting in poor RM and costly contract renegotiations and terminations. This chapter proposes a methodology based on fuzzy set theory (FST) in which decision makers (DMs) use linguistic variables to assess and calculate RM capability values of public–private parties for risk events and to arrive at risk allocation (RA) decisions. The proposed methodology is based on integrating RA decision criteria, the Delphi method and the fuzzy synthetic evaluation (FSE) technique. The application of FSE allows for the introduction of linguistic variables that express DMs’ evaluations of RM capabilities. This provides a means to deal with the problems of qualitative, multi-criteria analysis, subjectivity and uncertainty that characterise decision-making in the construction domain. The methodology is outlined and demonstrated based on empirical data collected through a three-round Delphi survey. The public–private parties’ RM capability values for land acquisition risk are calculated using the proposed methodology. The methodology is helpful for performing fuzzy-based analysis in PPP projects, even in the event of limited or no data. This chapter makes the contribution of presenting a RA decision-making methodology that is easy to understand and use in PPP contracting and that enables DMs to track calculations of RM capability values.

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Article

Alolote Ibim Amadi and Anthony Higham

This study aims to proffer a theoretical narrative explaining the poor financial performance of public highway agencies in Nigeria. This study critically spotlights…

Abstract

Purpose

This study aims to proffer a theoretical narrative explaining the poor financial performance of public highway agencies in Nigeria. This study critically spotlights seminal works in the literature offering theoretical narratives on the poor financial performance of public infrastructure projects, to discuss whether they adequately capture the relationship between psychological factors, project governance/leadership issues and knowledge/skill deficiencies related to the cost performance of infrastructure projects in the developing world. The evaluation reveals the predominant contextual exclusivity of these theoretical narratives to the developed world, which tend to under-represent developing countries, such as those on the African continent.

Design/methodology/approach

Using a case study research strategy, longitudinal documentary/archival data for 61 highway projects were analyzed. In total, 16 interviews were also conducted with highway officials from the three highway agencies responsible for the execution of the projects. A two-stage deductive-inductive thematic analysis of the collated data was carried out to identify barriers to the financial management of public highway projects, the result of which is cognitively mapped out.

Findings

The study showcases empirical insight on cost overruns experienced in Nigerian public projects, because of the trickle-down effect of human and organizational environment, as well as because of workers’ knowledge/skill deficiencies.

Research limitations/implications

The developed theory is contextual to Nigeria, and there is scope for testing its generalisability to other developing nations.

Originality/value

The in-depth trajectory provided uncovers an intricate web of technical and psycho-social, organizational and institutional issues, which have not been identified and explained by previous theoretical narratives.

Details

Journal of Financial Management of Property and Construction, vol. 23 no. 1
Type: Research Article
ISSN: 1366-4387

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Article

DARRIN GRIMSEY and RICHARD GRAHAM

The National Health Service (NHS) hospitals in Britain are currently in a state of decay following many years of underinvestment in the estate. The NHS urgently requires…

Abstract

The National Health Service (NHS) hospitals in Britain are currently in a state of decay following many years of underinvestment in the estate. The NHS urgently requires billions of pounds of investment ranging from total hospital new builds to small refurbishment of existing facilities. The previous Conservative government put forward the Private Finance Initiative (PFI) as the procurement mechanism to address this problem. The new Labour government currently appear to be committing themselves to the same approach. PFI project sponsors have spent upwards of £30m bidding for around 30 major PFI schemes. Despite this, by the time of the UK election in May 1997 not one scheme had reached financial close and many sponsors were expressing their disillusionment with the process. Unlike PFI on other Government infrastructure and service schemes, each PFI hospital is tendered by a separate Trust with their own limited budgets. Many Trusts have demanded schemes without realising that they cannot afford them and whilst these schemes may work out cheaper than publicly financed hospitals over 30 years or more, charges are higher in the early years. This is primarily due to the market for loans, the conditions attached to these loans in terms of repayment periods and cover ratios, and the requirement of the sponsors to generate a reasonable return on their investment. This paper discusses the major issues and analyses some of the technical financial problems surrounding the PFI in the NHS. The authors draw on practical experience of financial structuring and modelling hospital projects to build a generic model to analyse NHS PFI economics.

Details

Engineering, Construction and Architectural Management, vol. 4 no. 3
Type: Research Article
ISSN: 0969-9988

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Article

Richard Glenn Fulford

The purpose of this paper is to explore how construction projects should be conceived and how the productivity of the construction industry impacts upon a nation’s wealth.

Abstract

Purpose

The purpose of this paper is to explore how construction projects should be conceived and how the productivity of the construction industry impacts upon a nation’s wealth.

Design/methodology/approach

The approach has been to marshal the extant literature about the construction industry, construction industry productivity and the economic value of the built environment. Whilst there are many lenses that are used to understand the industry, different ways to measure productivity performance and differing practices between nations, it has been determined that construction industry productivity improvement significantly lags behind other industries.

Findings

There is a strong argument that construction productivity improvement correlates to advances in a nation’s economy. Nonetheless, it is the decisions about the nature of infrastructure, the standardisation of infrastructure and the effect upon labour productivity that will have the greatest implications for a nation’s economic future. These economic improvements will be inhibited by legacy infrastructure, particularly in densely populated areas. If substantial innovation occurs, the nations currently holding the highest stock of infrastructure might be economically constrained.

Research limitations/implications

The construction industry is highly fragmented and has the uncertainties of a cyclic industry. It is, therefore, necessary for governments to identify standards and facilitate innovation. The implications for short- and long-term economic performance require that the industry is a fundamental at the highest level of government.

Originality/value

Scholars can use the propositions to further analyse construction productivity improvement and the provision of different types of infrastructure with regard to a nation’s economic performance. Hypotheses are offered to support future research.

Details

Engineering, Construction and Architectural Management, vol. 26 no. 5
Type: Research Article
ISSN: 0969-9988

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Article

Marcus Jefferies, Graham John Brewer and Thayaparan Gajendran

There has been a significant increase in the use of relationship contracting in the global construction industry, with strategies such as Partnering, Alliancing and Public

Abstract

Purpose

There has been a significant increase in the use of relationship contracting in the global construction industry, with strategies such as Partnering, Alliancing and Public-Private Partnerships all used. These approaches were introduced to the Australian construction industry in the 1990s in an attempt to overcome the adversarial nature of traditional contracting methods. The purpose of this paper is to investigate factors that influence the successful implementation of Project Alliancing by means of a case study approach focusing on the procurement of a large water treatment plant. The research findings identify critical success factors (CSFs) both from literature and the case study project.

Design/methodology/approach

The research traces the origins of Alliancing and identifies CSFs by reviewing literature and analysing a current case study project. The paper first identifies CSFs on a global scale by establishing a theoretical framework of CSFs and then compares this to the case study project. A case study of an Australian Alliance project is investigated whereby a semi-structured interview process, involving senior managers from the six partners from the Alliance, was used in conjunction with a review of project documentation. The findings of the case study project are compared to the literature and any new CSFs are identified.

Findings

Alliancing helps to establish and manage the relationships between all parties, remove barriers and encourage maximum contribution to achieve success. Alliancing provides a project delivery method that promotes open communication, equality and a systematic problem resolution process. Team culture focusing on an “open book/no blame” approach is vital to the success of an Alliance. Five CSFs were identified as specifically influencing the success of the case study project: the use of an integrated Alliance office; the staging of project and stretch targets; establishing project specific key performance indicators; facilitating on-going workshops; and the integration of a web-based management programme.

Originality/value

The research findings assist both public and private sectors by identifying factors that are critical for success in Alliancing. Five additional factors were identified as specifically influencing the success of the case study project. Since this research was conducted, Australia has seen a further increase in relationship contracting where the likes of Alliancing is often used as the default approach for certain Public Sector projects. Ongoing research into Alliancing is vital to ensure the development of sustainable procurement models, successful operational viability, fair risk distribution and value for money.

Details

Engineering, Construction and Architectural Management, vol. 21 no. 5
Type: Research Article
ISSN: 0969-9988

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Article

Farshid Rahmani, Tayyab Maqsood and Malik Khalfan

The purpose of this paper is to review the use of various construction procurement systems in the past and present, specifically within the Australian construction…

Abstract

Purpose

The purpose of this paper is to review the use of various construction procurement systems in the past and present, specifically within the Australian construction industry and to overview the historical development of procurement both globally and in the Australian context through the existing literature.

Design/methodology/approach

The paper is an in-depth literature review of various construction procurement systems used in the past and present, both in general and within the context of Australian construction industry.

Findings

The findings suggest that even though relationship-based procurement (RBP) systems offer significant benefits to all project participants, they are unproved by many decision makers because of lack of robust theoretical concept and inability in demonstrating value for money (VfM) for public projects, which would be one of the factors causing move away from RBP in the future.

Originality/value

This review is one of its kind. There is no such review done before within the context of Australian construction industry in such a detail. This review is a part of a recently completed PhD study.

Details

Engineering, Construction and Architectural Management, vol. 24 no. 4
Type: Research Article
ISSN: 0969-9988

Keywords

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