An analytical network process (ANP) model for choosing optimal public-private partnership (PPP) contract types for infrastructure projects

Abstract

With the rapid social and economic development, a great deal of expenditure is crucial for the nation's infrastructure development. Nevertheless, the governments of many developing nations have been experienced with the limited budget and technical inability to deliver effective public infrastructures. Public-private partnership (PPP) has been adopted as an alternative collaboration arrangement between the government and the private sector in many nations to overcome these challenges. PPP can be defined as a long-term contract between a public agency and a private entity for rendering public facilities, including design, construct, finance, operate, and manage the project. The PPP contract types can be classified by various factors. Different PPP options imply different levels of responsibility and risks to be assumed by the private operator. Deciding an appropriate PPP contact type is always a risk-taking task for the government. This decision-making depends upon several criteria, which directly contribute to project success. This thesis proposes a multi-criteria decision-making model based on analytical network process (ANP). The proposed model can be employed to choose a PPP contract type that optimizes important criteria. The main input of the model is the priorities (weights) of the PPP contracts selection criteria, which are obtained from a series of questionnaire surveys. The model is applied to four case studies. One case study is an ongoing project and in-depth interview with a group of PPP experts. The three case studies are done via online interviews. The outcome of this research is a decision-analysis model that is structured by an analytical network process, which can determine the best type of PPP contract depending on decision-maker’s objectives. This research can assist the stakeholders such as political decision-makers, private investors, and strategic consultants who are responsible for proposing and selecting the various types of available PPP options that will suit their PPP projects. Moreover, using this supported optimal decision model can minimize the time-consuming of adopting the best form of PPP contract type, and it leads to project success. Although this proposed model is an innovative approach, due to the limitation of the legal system in Thailand, the proposed model needs to be modified to apply in practice.