American Society of Civil Engineers


When Are Public-Private Partnerships Not an Appropriate Governance Structure? Case Study Evidence


by S. Ping Ho, (Associate Professor, Construction Management Program, Dept. of Civil Engineering, National Taiwan University, Taipei, TAIWAN. E-mail: spingho@ntu.edu.tw) and Chun-Wei Tsui, (Ph.D. Candidate, Construction Management Program, Dept. of Civil Engineering, National Taiwan University, Taipei, TAIWAN. E-mail: d93521007@ntu.edu.tw)
Section: Organizational Leadership and Management, pp. 817-826, (doi:  http://dx.doi.org/10.1061/41109(373)82)

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Document type: Conference Proceeding Paper
Part of: Construction Research Congress 2010: Innovation for Reshaping Construction Practice
Abstract: While the higher efficiency due to better pooling of resources is largely emphasized in Public-Private Partnerships (PPPs), the impacts of transaction costs embedded in PPPs are often understated. In fact, excessively high transaction costs could render PPPs an inferior alternative for providing public infrastructures/services. In literature, there are some studies examining the intrinsic types and sources of transaction costs embedded in different governance structures for providing public infrastructures. Specifically, two major sources of transaction costs in PPPs have been suggested, namely, the principal-principal problems and hold-up/renegotiation problems. This paper uses case study method to empirically examine the hypotheses concerning the transaction cost contingencies and whether PPPs are appropriate as a governance structure. The two cases are the Channel Tunnel project and the Taiwan High Speed Rail project, two of the largest and, yet, the most problematic and controversial PPP projects in the world.


ASCE Subject Headings:
Partnerships
Private sector
Case studies
Construction industry