Public private partnership (PPP) projects like any infrastructure projects have large sunk costs and are area specificity, meaning once constructed they cannot be reallocated and used in a different area as they are only useful in the area where their services are needed. Due to these characteristics, PPPs have high risk of opportunistic behaviour embedded in them. These traits increase investment risks on the part of the private investor. Before any investor decides to participate in an infrastructure project like PPPs, it needs assurance that certain institutional requirements for PPPs in the country in question exist. Existence of such conditions bring about comfort to the investor that the investment will be a success. This expectation is a legitimate one given the high risk associated with infrastructure projects. Once an investment in infrastructure has been made, the investor’s bargaining power declines due to area specificity of such projects and that increases the investment risk for the investor. Hence, the existence of robust regulatory and legal frameworks is imperative for private sector investments in infrastructure projects as they seek to create a level playing field for all parties involved. The objective of this paper is therefore, to discuss these institutional and regulatory requirements from the perspective of a PPP project.
| Published in | Science, Technology & Public Policy (Volume 6, Issue 2) |
| DOI | 10.11648/j.stpp.20220602.13 |
| Page(s) | 72-80 |
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Copyright © The Author(s), 2024. Published by Science Publishing Group |
Public Private Partnerships, Institutional Arrangements, Regulatory Frameworks, Legal System, Corruption
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APA Style
Patrick Mabuza. (2022). Institutional and Regulatory Framework for PPP Projects: Creating a Conducive Environment for PPPs in Developing Countries. Science, Technology & Public Policy, 6(2), 72-80. https://doi.org/10.11648/j.stpp.20220602.13
ACS Style
Patrick Mabuza. Institutional and Regulatory Framework for PPP Projects: Creating a Conducive Environment for PPPs in Developing Countries. Sci. Technol. Public Policy 2022, 6(2), 72-80. doi: 10.11648/j.stpp.20220602.13
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Download@article{10.11648/j.stpp.20220602.13,
author = {Patrick Mabuza},
title = {Institutional and Regulatory Framework for PPP Projects: Creating a Conducive Environment for PPPs in Developing Countries},
journal = {Science, Technology & Public Policy},
volume = {6},
number = {2},
pages = {72-80},
doi = {10.11648/j.stpp.20220602.13},
url = {https://doi.org/10.11648/j.stpp.20220602.13},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.stpp.20220602.13},
abstract = {Public private partnership (PPP) projects like any infrastructure projects have large sunk costs and are area specificity, meaning once constructed they cannot be reallocated and used in a different area as they are only useful in the area where their services are needed. Due to these characteristics, PPPs have high risk of opportunistic behaviour embedded in them. These traits increase investment risks on the part of the private investor. Before any investor decides to participate in an infrastructure project like PPPs, it needs assurance that certain institutional requirements for PPPs in the country in question exist. Existence of such conditions bring about comfort to the investor that the investment will be a success. This expectation is a legitimate one given the high risk associated with infrastructure projects. Once an investment in infrastructure has been made, the investor’s bargaining power declines due to area specificity of such projects and that increases the investment risk for the investor. Hence, the existence of robust regulatory and legal frameworks is imperative for private sector investments in infrastructure projects as they seek to create a level playing field for all parties involved. The objective of this paper is therefore, to discuss these institutional and regulatory requirements from the perspective of a PPP project.},
year = {2022}
}
TY - JOUR T1 - Institutional and Regulatory Framework for PPP Projects: Creating a Conducive Environment for PPPs in Developing Countries AU - Patrick Mabuza Y1 - 2022/10/18 PY - 2022 N1 - https://doi.org/10.11648/j.stpp.20220602.13 DO - 10.11648/j.stpp.20220602.13 T2 - Science, Technology & Public Policy JF - Science, Technology & Public Policy JO - Science, Technology & Public Policy SP - 72 EP - 80 PB - Science Publishing Group SN - 2640-4621 UR - https://doi.org/10.11648/j.stpp.20220602.13 AB - Public private partnership (PPP) projects like any infrastructure projects have large sunk costs and are area specificity, meaning once constructed they cannot be reallocated and used in a different area as they are only useful in the area where their services are needed. Due to these characteristics, PPPs have high risk of opportunistic behaviour embedded in them. These traits increase investment risks on the part of the private investor. Before any investor decides to participate in an infrastructure project like PPPs, it needs assurance that certain institutional requirements for PPPs in the country in question exist. Existence of such conditions bring about comfort to the investor that the investment will be a success. This expectation is a legitimate one given the high risk associated with infrastructure projects. Once an investment in infrastructure has been made, the investor’s bargaining power declines due to area specificity of such projects and that increases the investment risk for the investor. Hence, the existence of robust regulatory and legal frameworks is imperative for private sector investments in infrastructure projects as they seek to create a level playing field for all parties involved. The objective of this paper is therefore, to discuss these institutional and regulatory requirements from the perspective of a PPP project. VL - 6 IS - 2 ER -
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