CSF for PPP
Re: Critical Success Factors for PPPs in Infrastructure Developments: Chinese Perspective
Authors: Albert PC Chan, Patrick TI Lam, Daniel WM Chan, Esther Cheung and Yongjian Ke
Journal of Construction Engineering and Management, 2010, 136(5): 484-494. (SCI: 583QH, EI: 20101712890213)
Abstract
This paper aims to explore the Critical Success Factors (CSFs) necessary for adopting Public Private Partnerships (PPPs) in both China and the Hong Kong Special Administration Region (referred to as Hong Kong from here onwards). Although Hong Kong is part of China, differences abound in terms of business culture and practice due to the previous British ruling. Hong Kong is a metropolitan influenced by both western and eastern cultures, making it a unique city in China now. Both the mainland and Hong Kong have been keen to deliver more infrastructure service projects through PPP mode, with the former aiming to meet its rapidly growing infrastructure demand and the latter uplifting its efficiency further. Whilst the demand for more PPP projects is foreseeable in near future, it is necessary to investigate the CSFs of PPPs in these two similar and yet sufficiently different administrative systems. An empirical questionnaire survey was conducted with relevant experienced practitioners in Hong Kong and China between October and December of 2007. The respondents from both administrative systems were asked to rate the importance of eighteen CSFs identified from the literature. The top CSF rated by both respondents from the mainland and Hong Kong was “Favorable legal framework”, highlighting the importance of legal framework to the success of PPP ventures. The Kendall’s concordance test ensured that the questionnaires were suitable for analysis in terms of the internal consistency of those survey respondents within a certain group. The Spearman rank correlation analysis showed that the responses between the two administrative systems were in general similar. Three CSFs were highlighted by the independent 2-sample t-test to be statistically different between the two administrative systems; these included “Multi-benefit objectives”, “Appropriate risk allocation and risk sharing”, and “Available financial market”. The results indicate a lack of objectives in adopting PPP projects in Hong Kong as seen in the case of West Kowloon Cultural District project. Previous researchers have also emphasized the importance of an equitable risk sharing mechanism for PPP projects to perform successfully. And also the restrictions of the financial market in China, due to the immature corporate bond market, the inadequate syndicated loan for debt financing; and the uncertainty of legal enforcement for floating charge on project assets when used as guarantees.
CE Database subject headings: Public Private Partnership (PPP); Critical Success Factor (CSF); Procurement; China; Hong Kong.
Full-text link: http://dx.doi.org/10.1061/(ASCE)CO.1943-7862.0000152
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