Procedures and resources for analyses related to public-private partnerships
Han, Zhe, Ph. D.
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The demands for delivering basic infrastructure services keep growing worldwide. However, funding from government and public agencies alone cannot cover the capital needed to operate and maintain existing infrastructures, much less to construct new ones. Public-Private Partnerships (PPPs), utilizing private capitals, are an innovative and cost-effective financing mechanism to solve this budgetary shortage problem. PPPs are becoming accepted by more and more public agencies all over the world as an alternative option to bridge the budget gap. However, this financial mechanism is relatively new and many institutions are still exploring the tool. In this thesis research, basic procedures and useful resources for conducting various analyses related to PPP projects are synthesized and discussed based on a wide range of literature. Basic concepts, such as project finance, value for money, and financial viability, are first presented as an introduction to PPPs. Then the differences of PPP development between developed countries and developing countries are discussed. Since risk analysis is the key part in PPP project analyses, information on risk identification, quantification, allocation, and management is illustrated with examples. Furthermore, resources such as web-based tools and mathematical models applicable to dealing with PPP projects and quantifying risks associated with PPP procurements are provided. This thesis can help both public and private sectors better understand PPPs.