Abstract

Public–private partnerships (PPPs) have been accused of importing practices and norms from the private sector that could conflict with core public values (e.g., accountability, transparency, responsiveness, responsibility, and quality). Some scholars believe that PPP renegotiations can enhance public values through ex post adaptation, interference, and monitoring, while others emphasize that PPP renegotiations incentivize opportunistic behaviors on the part of governments and other stakeholders. Focusing on China’s PPPs, this study investigates how the renegotiation of PPP projects impacts public values in infrastructure service delivery through a Delphi survey. Two rounds of Delphi survey questionnaires were conducted with 14 PPP experts in China. The result shows that, in general, renegotiations can safeguard or even strengthen public values in PPPs, although sometimes at the expense of managerial values. Government-led renegotiations are more likely to increase public values than contractor-led renegotiations. This study contributes to the extant literature on PPPs by shifting research concerns from managerial values to public values, and from ex ante planning to ex post renegotiation. Practitioners can derive benefits from renegotiations by paying attention to their positive impact on public values.

Get full access to this article

View all available purchase options and get full access to this article.

Data Availability Statement

Some or all data, models, or codes that support the findings of this study are available from the corresponding author upon reasonable request.

Acknowledgments

This work is supported by the National Natural Science Foundation of China (Grant Nos. 71702132 and 71774023) and Key Projects of Philosophy and Social Sciences Research, Ministry of Education (Grant Nos. 21JZD029 and 21JZD034).

References

Bae, D. S., I. Damnjanoic, and D. H. Kang. 2019. “PPP renegotiation framework based on equivalent NPV constraint in the case of BOT project: Incheon Airport highway, South Korea.” KSCE J. Civ. Eng. 23 (4): 1473–1483. https://doi.org/10.1007/s12205-019-1444-9.
Bahadorestani, A., J. T. Karlsen, and N. M. Farimani. 2020. “Novel approach to satisfying stakeholders in megaprojects: Balancing mutual values.” J. Manage. Eng. 36 (2): 04019047. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000734.
Bertelli, A. M., V. Mele, and A. B. Whitford. 2020. “When new public management fails: Infrastructure public–private partnerships and political constraints in developing and transitional economies.” Governance 33 (3): 477–493. https://doi.org/10.1111/gove.12428.
Bhandari, S., and M. R. Hallowell. 2021. “Identifying and controlling biases in expert-opinion research: Guidelines for variations of Delphi, nominal group technique, and focus groups.” J. Manage. Eng. 37 (3): 04021015. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000909.
Bozeman, B. 2007. Public values and public interest: Counterbalancing economic individualism. Washington, DC: Georgetown University Press.
Brown, T. L., and M. Potoski. 2010. “Managing contract performance: A transaction costs approach.” J. Policy Anal. Manage. 22 (2): 275–297. https://doi.org/10.1002/pam.10117.
Brown, T. L., M. Potoski, and D. M. V. Slyke. 2010. “Contracting for complex products.” Supplement, J. Public Administration Res. Theory 20 (S1): i41–i58. https://doi.org/10.1093/jopart/mup034.
Carpintero, S., and J. A. Gomez-Ibaņez. 2011. “Mexico’s private toll road program reconsidered.” Transp. Policy 18 (6): 848–855. https://doi.org/10.1016/j.tranpol.2011.05.005.
Casady, C. B. 2020. “Examining the institutional drivers of public-private partnership (PPP) market performance: A fuzzy set qualitative comparative analysis (fsQCA).” Public Manage. Rev. 23 (7): 981–1005. https://doi.org/10.1080/14719037.2019.1708439.
Casady, C. B., K. Eriksson, R. E. Levitt, and W. R. Scott. 2020. “(Re) defining public-private partnerships (PPPs) in the new public governance (NPG) paradigm: An institutional maturity perspective.” Public Manage. Rev. 22 (2): 161–183. https://doi.org/10.1080/14719037.2019.1577909.
Castelblanco, G., J. Guevara, H. Mesa, and A. Hartmann. 2022. “Social legitimacy challenges in toll road PPP programs: Analysis of the Colombian and Chilean cases.” J. Manage. Eng. 38 (3): 05022002. https://doi.org/10.1061/(ASCE)ME.1943-5479.0001010.
Crispeels, T., J. Willems, and I. Scheerlinck. 2018. “Public–private collaborations in drug development: Boosting innovation or alleviating risk?” Public Manage. Rev. 20 (2): 273–292. https://doi.org/10.1080/14719037.2017.1302247.
Cruz, C. O., R. C. Marques, and P. Cardoso. 2014. “Empirical evidence for renegotiation of PPP contracts in the road sector.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 7 (2): 05014003. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000151.
De Brux, J. 2010. “The dark and bright sides of renegotiation: An application to transport concession contracts.” Util. Policy 18 (2): 77–85. https://doi.org/10.1016/j.jup.2009.07.003.
Delhi, V. S. K., and A. Mahalingam. 2020. “Relating institutions and governance strategies to project outcomes: Study on public private partnerships in infrastructure projects in India.” J. Manage. Eng. 36 (6): 04020076. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000840.
Dewatripont, M., and E. Maskin. 1990. “Contract renegotiation in models of asymmetric information.” Eur. Econ. Rev. 34 (2–3): 311–321. https://doi.org/10.1016/0014-2921(90)90103-6.
Elkomy, S., G. Cookson, and S. Jones. 2019. “Cheap and dirty: The effect of contracting out cleaning on efficiency and effectiveness.” Public Administration Rev. 79 (2): 193–202. https://doi.org/10.1111/puar.13031.
Engel, E., R. Fischer, and A. Galetovic. 2006. Renegotiation without holdup: Anticipating spending and infrastructure concessions. Cambridge, MA: National Bureau of Economic Research.
Engel, E., R. Fischer, and A. Galetovic. 2009. Soft budgets and renegotiations in public-private partnerships. Cambridge, MA: National Bureau of Economic Research.
Estache, A., J.-L. Guasch, A. Iimi, and L. Trujillo. 2009. “Multidimensionality and renegotiation: Evidence from transport-sector public-private-partnership transactions in Latin America.” Rev. Ind. Organ. 35 (1–2): 41–71. https://doi.org/10.1007/s11151-009-9225-0.
Fehr, E., O. Hart, and C. Zehnder. 2011. “Contracts as reference points—Experimental evidence.” Am. Econ. Rev. 101 (2): 493–525. https://doi.org/10.1257/aer.101.2.493.
Flyvbjerg, B., M. K. S. Holm, and S. L. Buhl. 2006. “Inaccuracy in traffic forecasts.” Transp. Rev. 26 (1): 1–24. https://doi.org/10.1080/01441640500124779.
Forrer, J., J. E. Kee, K. E. Newcomer, and E. Boyer. 2010. “Public–private partnerships and the public accountability question.” Public Administration Rev. 70 (3): 475–484. https://doi.org/10.1111/j.1540-6210.2010.02161.x.
Gagnepain, P., M. Ivaldi, and D. Martimort. 2013. “The cost of contract renegotiation: Evidence from the local public sector.” Am. Econ. Rev. 103 (6): 2352–2383. https://doi.org/10.1257/aer.103.6.2352.
Guasch, J. L., J. J. Laffont, and S. Straub. 2007. “Concessions of infrastructure in Latin America: Government-led renegotiation.” J. Appl. Econom. 22 (7): 1267–1294. https://doi.org/10.1002/jae.987.
Guasch, J. L., J. J. Laffont, and S. Straub. 2008. “Renegotiation of concession contracts in Latin America: Evidence from the water and transport sectors.” Int. J. Ind Organ. 26 (2): 421–442. https://doi.org/10.1016/j.ijindorg.2007.05.003.
Guasch, J. L., and S. Straub. 2009. “Corruption and concession renegotiations: Evidence from the water and transport sectors in Latin America.” Util. Policy 17 (2): 185–190. https://doi.org/10.1016/j.jup.2008.07.003.
Guasch, L. 2004. Granting and renegotiating infrastructure concessions: Doing it right. Washington, DC: World Bank.
Guerrini, A., and G. Romano. 2017. “Contract renegotiation by an Italian wastewater utility: Action research to promote effective tariff revision.” Util. Policy 48 (1): 176–183. https://doi.org/10.1016/j.jup.2017.08.004.
Hallowell, M. R., and J. A. Gambatese. 2010. “Qualitative research: Application of the Delphi method to CEM research.” J. Constr. Eng. Manage. 136 (1): 99–107. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000137.
Hart, O. 2003. “Incomplete contracts and public ownership: Remarks, and an application to public-private partnerships.” Econ. J. 113 (486): C69–C76. https://doi.org/10.1111/1468-0297.00119.
Hart, O. 2008. “Economica Coase lecture: Reference points and the theory of the firm.” Economica 75 (299): 404–411. https://doi.org/10.1111/j.1468-0335.2007.00659.x.
Hart, O., A. Shleifer, and R. W. Vishny. 1997. “The proper scope of government: Theory and an application to prisons.” Q. J. Econ. 112 (4): 1127–1161. https://doi.org/10.1162/003355300555448.
Hart, O. D., and J. Moore. 2008. “Contracts as reference points.” Q. J. Econ. 123 (1): 1–48. https://doi.org/10.1162/qjec.2008.123.1.1.
Hartley, J., J. Alford, E. Knies, and S. Douglas. 2017. “Towards an empirical research agenda for public value theory.” Public Manage. Rev. 19 (5): 670–685. https://doi.org/10.1080/14719037.2016.1192166.
Hendren, K., Q. E. Luo, and S. K. Pandey. 2018. “The state of mixed methods research in public administration and public policy.” Public Administration Rev. 78 (6): 904–916. https://doi.org/10.1111/puar.12981.
HM Treasury. 2007. “Standardisation of PFI Contracts (SoPC), Version 4.” Accessed March 2, 2022. http://www.hm-treasury.gov.uk/d/pfi_sopc4pu101_210307.pdf.
Hodge, G. A., C. Greve, and A. E. Boardman. 2011. International handbook on public–private partnerships. Cheltenham, UK: Edward Elgar.
House, S. 2016. “Responsive regulation for water PPP: Balancing commitment and adaptability in the face of uncertainty.” Policy Soc. 35 (2): 179–191. https://doi.org/10.1016/j.polsoc.2016.06.001.
Iossa, E., and D. Martimort. 2011. “Risk allocation and the costs and benefits of public-private partnerships.” Rand J. Econ. 43 (2): 442–474.
James, O., S. Jilke, C. Petersen, and S. V. D. Walle. 2016. “Citizens’ blame of politicians for public service failure: Experimental evidence about blame reduction through delegation and contracting.” Public Administration Rev. 76 (1): 83–93. https://doi.org/10.1111/puar.12471.
Koppenjan, J. F. M., and B. Enserink. 2009. “Public–private partnerships in urban infrastructures: Reconciling private sector participation and sustainability.” Public Administration Rev. 69 (2): 284–296. https://doi.org/10.1111/j.1540-6210.2008.01974.x.
Kruger, N. A. 2012. “To kill a real option—Incomplete contracts, real options and PPP.” Transp. Res. Part A-Policy Pract. 46 (8): 1359–1371.
Kwak, Y. H., Y. Chih, and C. W. Ibbs. 2009. “Towards a comprehensive understanding of public private partnerships for infrastructure development.” Calif. Manage. Rev. 51 (2): 51–78. https://doi.org/10.2307/41166480.
Liang, Q., H. Hu, Z. Wang, and F. Hou. 2019. “A game theory approach for the renegotiation of Public-Private Partnership projects in Chinese environmental and urban governance industry.” J. Cleaner Prod. 238 (20): 117952. https://doi.org/10.1016/j.jclepro.2019.117952.
Linstone, H. A., M. Turoff, and O. Helmer. 1975. The Delphi method: Techniques and applications. Boston: Addison-Wesley Publishing Company, Advanced Book Program.
Liu, B., Y. Hu, A. Wang, Z. Yu, J. Yu, and X. Wu. 2018. “Critical factors of effective public participation in sustainable energy projects.” J. Manage. Eng. 34 (5): 04018029. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000635.
Lohmann, C., and P. G. Rötzel. 2014. “Opportunistic behavior in renegotiations between public-private partnerships and government institutions: Data on public-private partnerships of the German armed forces.” Int. Public Manage. J. 17 (3): 387–410. https://doi.org/10.1080/10967494.2014.935245.
Ma, L., T. Christensen, and Y. Zheng. 2021. “Government technological capacity and public–private partnerships regarding digital service delivery: Evidence from Chinese cities.” Int. Rev. Administration Sci. 9 (Jun): 00208523211018849. https://doi.org/10.1177/00208523211018849.
Maskin, E., and J. Tirole. 2008. “Public–private partnerships and government spending limits.” Int. J. Ind Organ. 26 (2): 412–420. https://doi.org/10.1016/j.ijindorg.2007.05.004.
McKinlay, J. J. 2012. “Regulation, renegotiation, and reform: Improving transnational public-private partnerships in the wake of the gulf oil spill.” Indiana Law J. 87 (3): 1315–1344.
Ministry of Finance of China. 2022. “Public private partnerships project database.” Accessed December 1, 2018. http://www.cpppc.org:8082/efmisweb/ppp/projectLivrary/toPPPMap.do.
Neto, D., C. O. Cruz, and J. M. Sarmento. 2017. “Understanding the patterns of PPP renegotiations for infrastructure projects in Latin America: The case of Brazil.” Compet. Regul. Netw. Ind. 18 (3–4): 271–296. https://doi.org/10.1177/1783591718790712.
O’Flynn, J. 2007. “From new public management to public value: Paradigmatic change and managerial implications.” Aust. J. Public Administration 66 (3): 353–366.
Osborne, S. P., Z. Radnor, and K. Strokosch. 2016. “Co-production and the co-creation of value in public services: A suitable case for treatment?” Public Manage. Rev. 18 (5): 639–653. https://doi.org/10.1080/14719037.2015.1111927.
Parrado, S., and A.-M. Reynaers. 2020. “Agents never become stewards: Explaining the lack of innovation in public–private partnerships.” Int. Rev. Administration Sci. 86 (3): 427–443. https://doi.org/10.1177/0020852318785024.
Reeves, E. 2008. “The practice of contracting in public private partnerships: Transaction costs and relational contracting in the Irish schools sector.” Public Administration 86 (4): 969–986. https://doi.org/10.1111/j.1467-9299.2008.00743.x.
Reynaers, A. M. 2014. “Public values in public–private partnerships.” Public Administration Rev. 74 (1): 41–50. https://doi.org/10.1111/puar.12137.
Reynaers, A. M., and S. Grimmelikhuijsen. 2015. “Transparency in public–private partnerships: Not so bad after all?” Public Administration 93 (3): 609–626. https://doi.org/10.1111/padm.12142.
Ruiz, A., and J. Guevara. 2020. “Environmental and economic impacts of road infrastructure development: Dynamic considerations and policies.” J. Manage. Eng. 36 (3): 04020006. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000755.
Rwelamila, P. D., P. Fewings, and C. Henjewele. 2015. “Addressing the missing link in PPP projects: What constitutes the public?” J. Manage. Eng. 31 (5): 04014085. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000330.
Salazar, J., J. Guevara, and K. Verhoest. 2021. “Inferential analysis of road infrastructure PPP sponsor networks.” J. Manage. Eng. 37 (6): 04021069. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000971.
Savas, E. S. 2000. Privatization and public-private partnerships. New York: Chatham House.
Schepper, S. D., E. Haezendonck, and M. Dooms. 2014. “Understanding pre-contractual transaction costs for public–private partnership infrastructure projects.” Int. J. Project Manage. 33 (4): 932–946. https://doi.org/10.1016/j.ijproman.2014.10.015.
Segal, I. 1999. “Complexity and renegotiation: A foundation for incomplete contracts.” Rev. Econ. Stud. 66 (1): 57–82. https://doi.org/10.1111/1467-937X.00078.
Shaw, R. 2013. “Another size fits all? Public value amanagement and challenges for institutional design.” Public Manage. Rev. 15 (4): 477–500. https://doi.org/10.1080/14719037.2012.664017.
Soecipto, R. M., and K. Verhoest. 2018. “Contract stability in European road infrastructure PPPs: How does governmental PPP support contribute to preventing contract renegotiation?” Public Manage. Rev. 20 (8): 1145–1164. https://doi.org/10.1080/14719037.2018.1428414.
Song, J., Y. Li, Z. Feng, and H. Wang. 2019. “Cluster analysis of the intellectual structure of PPP research.” J. Manage. Eng. 35 (1): 04018053. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000664.
Swanson, R., and V. Sakhrani. 2020. “Appropriating the value of flexibility in PPP megaproject design.” J. Manage. Eng. 36 (5): 05020010. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000770.
Valentin, V., N. Naderpajouh, and D. Abraham. 2018. “Impact of characteristics of infrastructure projects on public opinion.” J. Manage. Eng. 34 (1): 04017051. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000576.
Wiewiora, A., R. Keast, and K. Brown. 2016. “Opportunities and challenges in engaging citizens in the co-production of infrastructure-based public services in Australia.” Public Manage. Rev. 18 (4): 483–507. https://doi.org/10.1080/14719037.2014.999820.
Willems, T. 2014. “Democratic accountability in public–private partnerships: The curious case of Flemish school infrastructure.” Public Administration 92 (2): 340–358. https://doi.org/10.1111/padm.12064.
Williamson, O. E. 1985. The economic institutions of capitalism. New York: Simon and Schuster.
Xiong, W., B. Chen, H. Wang, and D. Zhu. 2019a. “Governing public–private partnerships: A systematic review of case study literature.” Aust. J. Public Administration 78 (1): 95–112. https://doi.org/10.1111/1467-8500.12343.
Xiong, W., B. Chen, H. Wang, and D. Zhu. 2019b. “Transaction hazards and governance mechanisms in public-private partnerships: A comparative study of two cases.” Public Perform. Manage. Rev. 42 (6): 1279–1304. https://doi.org/10.1080/15309576.2019.1574592.
Xiong, W., B. Chen, H. Wang, and D. Zhu. 2020. “Public–private partnerships as a governance response to sustainable urbanization: Lessons from China.” Habitat Int. 95 (1): 102095. https://doi.org/10.1016/j.habitatint.2019.102095.
Xiong, W., and X. Zhang. 2014. “Concession renegotiation models for projects developed through public-private partnerships.” J. Constr. Eng. Manage. 140 (5): 04014008. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000843.
Xiong, W., and X. Zhang. 2016. “The real option value of rrrrenegotiation in public–private partnerships.” J. Constr. Eng. Manage. 142 (8): 04016021. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001130.
Xiong, W., X. X. Zhao, and H. Wang. 2018. “Information asymmetry in renegotiation of public–private partnership projects.” J. Comput. Civ. Eng. 32 (4): 04018028. https://doi.org/10.1061/(ASCE)CP.1943-5487.0000763.
Xiong, W., N. Zhong, F. Wang, M. Zhang, and B. Chen. 2021. “Political opportunism and transaction costs in contractual choice of public–private partnerships.” Public Administration 1–12. https://doi.org/10.1111/padm.12760.
Yan, X., H.-Y. Chong, Z. Sheng, and X. Wang. 2017. “Financing decision model for toll roads: Balancing economic and public attributes.” J. Manage. Eng. 33 (4): 04017010. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000523.
Yeung, J. F., A. P. Chan, and D. W. Chan. 2009. “Developing a performance index for relationship-based construction projects in Australia: Delphi study.” J. Manage. Eng. 25 (2): 59–68. https://doi.org/10.1061/(ASCE)0742-597X(2009)25:2(59).
Zhang, Y., H. H. Wei, D. Zhao, Y. Han, and J. Chen. 2021. “Understanding innovation diffusion and adoption strategies in megaproject networks through a fuzzy system dynamic model.” Front. Eng. Manage. 8 (1): 32–47. https://doi.org/10.1007/s42524-019-0082-8.

Information & Authors

Information

Published In

Go to Journal of Management in Engineering
Journal of Management in Engineering
Volume 38Issue 5September 2022

History

Received: Nov 29, 2021
Accepted: Apr 27, 2022
Published online: Jun 20, 2022
Published in print: Sep 1, 2022
Discussion open until: Nov 20, 2022

Permissions

Request permissions for this article.

Authors

Affiliations

Associate Professor, School of Economics and Management, Tongji Univ., Shanghai 200092, China. ORCID: https://orcid.org/0000-0003-1686-6477. Email: [email protected]
Huanming Wang, Ph.D. [email protected]
Professor, Dept. of Public Administration, Dalian Univ. of Technology, Dalian 116023, China (corresponding author). Email: [email protected]
Honorary Senior Research Fellow, Bartlett School of Construction and Project Management, Univ. College London, London WC1E7HB, UK; Senior Fellow, Schar School of Policy and Government, George Mason Univ., Fairfax, VA. ORCID: https://orcid.org/0000-0001-9215-7168. Email: [email protected]
Assistant Professor, School of Economics and Management, Tongji Univ., Shanghai 200092, China. ORCID: https://orcid.org/0000-0002-8818-9674. Email: [email protected]

Metrics & Citations

Metrics

Citations

Download citation

If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.

Cited by

  • Reviewing the Efficacy of Flexible Contracts: A Reassessment of the Least Present Value of Revenue Model for Public–Private Partnerships, Journal of Management in Engineering, 10.1061/JMENEA.MEENG-5559, 40, 1, (2024).
  • Advancing Urban Sustainability through Public–Private Partnerships: Case Study of the Gu’An New Industry City in China, Journal of Management in Engineering, 10.1061/(ASCE)ME.1943-5479.0001103, 39, 1, (2023).
  • Determinants of the Severity of Contract Enforcement in Chinese PPP Projects: From Public Sector’s Perspective, Journal of Environmental and Public Health, 10.1155/2022/5149478, 2022, (1-8), (2022).

View Options

Get Access

Access content

Please select your options to get access

Log in/Register Log in via your institution (Shibboleth)
ASCE Members: Please log in to see member pricing

Purchase

Save for later Information on ASCE Library Cards
ASCE Library Cards let you download journal articles, proceedings papers, and available book chapters across the entire ASCE Library platform. ASCE Library Cards remain active for 24 months or until all downloads are used. Note: This content will be debited as one download at time of checkout.

Terms of Use: ASCE Library Cards are for individual, personal use only. Reselling, republishing, or forwarding the materials to libraries or reading rooms is prohibited.
ASCE Library Card (5 downloads)
$105.00
Add to cart
ASCE Library Card (20 downloads)
$280.00
Add to cart
Buy Single Article
$35.00
Add to cart

Get Access

Access content

Please select your options to get access

Log in/Register Log in via your institution (Shibboleth)
ASCE Members: Please log in to see member pricing

Purchase

Save for later Information on ASCE Library Cards
ASCE Library Cards let you download journal articles, proceedings papers, and available book chapters across the entire ASCE Library platform. ASCE Library Cards remain active for 24 months or until all downloads are used. Note: This content will be debited as one download at time of checkout.

Terms of Use: ASCE Library Cards are for individual, personal use only. Reselling, republishing, or forwarding the materials to libraries or reading rooms is prohibited.
ASCE Library Card (5 downloads)
$105.00
Add to cart
ASCE Library Card (20 downloads)
$280.00
Add to cart
Buy Single Article
$35.00
Add to cart

Media

Figures

Other

Tables

Share

Share

Copy the content Link

Share with email

Email a colleague

Share