Research On The Correlation Between Maintaining The Partnership Relationships And PPP Projects Value

Public private partnerships(PPP)have becoming the effective tool for increasing the public services provisions,enhancing the efficiencies and quality of public services provisions,and improving the performance of public administration in the context of the supply-side structural reform in China.The previous studies have gained many achievements,which main focused on the risks allocation,ownership distribution,and institutional building;however,the paradox of risks allocation existed in practice,that is,the adverse selection of the implementation of the Ex-ante risk allocation strategy results in partner exchange,breaking a contract,or capital withdrawal,which lead to the instability and nondurable of the partnership relationship and project value dissipation.Therefore,maintaining the partnership relationships is the key issue in the sustainable operation and value creation of PPP projects tested by the literature review and logical deduction based on the Chinese context of partnership thinking;the theoretical framework of PPP partnership relationship management is constructed by the multidisciplinary deduction.The impact mechanism between maintaining the partnership relationship and project values is revealed by the combination of qualitative and quantitative analysis,and examined the correlations between maintaining the partnership relationship and the driving forces of project value creation,and also gained the indicators that suggested the contribution level impacted by the factors of maintaining the partnership relationships;these findings help the partners mange the partnership relationships,value creation,and sustainable operation in practice,which also provide the theoretical base for PPP research.The main findings are provided as follows:(1)The nature of partnership relationships and value orientation are defined according to the research findings of project management,resource-based theory,transaction cost economics,contract theory and value theory,and the theoretical framework of PPP partnership relationships management is constructed,that is,partnership relationship-maintaining the partnership relationship-critical factors of maintaining the partnership relationship-defining the project value-building the value effectiveness of maintaining the partnership relationship-empirical research on the relationships between maintaining the partnership relationship and project value.(2)Based on the nature of PPP partnership relationships,the critical factors and its correlation paths are determined and tested according to the logic of cooperative partner-project object-external environment.The findings are provided as follows: first,the critical factors of maintaining the partnership relationships are government capabilities and its organizational nature,firm capabilities,Public involvement,cooperative environment,and partner's synergy in PPP projects.Second,the partner's synergy is the major influence point of government capabilities and its organizational nature,firm capabilities,Public involvement,and cooperative environment.Third,the key indicators of partner's synergy are concession price,allocation of risk and benefit,and relationship-specific inputs,which are the key variables of studying the value effect on maintaining the partnership relationships.(3)Based on the value definition from the value for money,PPP project values are divided into three parts,which are public value,economic value,and partnership value according to the nature of partnership and project characteristics.The transmission paths on value effect of concession price,risk and relationship-specific investments are determined and confirmed by the analysis of project management,value theory,risk management and relational capital theory;and the relationship functions are constructed among concession price,risk,relationship-specific investments and project values.These findings support the research on the correction between maintaining the partnership relationship and project values.(4)The case study of PPP waste-to-energy incineration projects,the functional relations between the critical indicators of maintaining the partnership relationships and project value elements and the change trends of critical parameters are defined by the system dynamics,and the article tested that the correlations are existed between maintaining the partnership relationships and PPP project value;Planting the relationship-specific investments in the C-D production function,the article expanded the value elements of production function,and measured the contribution level between value elements and project value by applying the Econometrics.The findings are provided as follows: first,the concession price has a positive correction with project value,which suggests that increasing the price will result in project value-added under the condition of other variables keeping the same.Second,the relationship between risks and value are changing simultaneously,for example,waste energy have a positive effect on the project value.Third,relationship-specific investments in maintaining the partnership relationships contribute to the project values,the contribution level is 0.931,which suggests that 1 percent increase will result in 0.931 percent increase in project values.Finally,based on the contribution level of value elements by C-D production function,the article found that relationship-specific investments is the critical element of PPP value creation,and the practice rule of partnership instability and value loss is revealed,which means that PPP project values would reduce largely or disappear once the relationship-specific investment interrupt because partners break the partnership relationships;moreover,it further confirms that maintaining the partnership relationship is important to manage the PPP project value.