In the Name of the Pandemic: A Case Study of Contractual Modifications in PPP Solicited and Unsolicited Proposals in COVID-19 Times
Publication: Construction Research Congress 2022
ABSTRACT
The COVID-19 pandemic has triggered unprecedented political, social, and economic repercussions that simultaneously affect the public, private, and users, triggering construction, demand, and credit risks in road Public-Private Partnerships (PPP). Given the magnitude of this impact, incipient literature has analyzed how specific projects addressed the shock from multiple perspectives in record time. Nevertheless, a thorough comparison of contractual renegotiations produced by the pandemic among initiation processes [i.e., Solicited Proposals (SP) and Unsolicited Proposals (USP)] is missing. Therefore, this paper aims to extend the understanding of COVID implications by analyzing PPP contractual governance, under unprecedented uncertainty, in the most recent road PPP program in Colombia, including 29 projects. This analysis was developed with a case study based on public information. Findings reveal that contractual modifications derived from COVID-19 were mainly driven by extending the project schedule, increasing concessionaire’s liquidity in the middle term, and reducing the project scope. Overall, the empirical findings indicate that USP was much more renegotiated than SP, which suggests that the public sector is more prone to guaranteeing the intended private’s sector conditions in projects initiated by the same private sector.
Get full access to this article
View all available purchase options and get full access to this chapter.
REFERENCES
Benavides, J., del Valle, C., Espinosa, D. M., Leal, M., Lleras, G. C., Márquez, R., Perry, G., Saavedra, J. C., and Taboada, J. G. (2019). Informe de la Comisión de Expertos en Infraestructura de Transporte.
Benítez-Ávila, C., Hartmann, A., and Dewulf, G. (2019). “Contractual and Relational Governance as Positioned-Practices in Ongoing Public – Private Partnership Projects.” Project Management Journal.
Bitran, E., Nieto-Parra, S., and Robledo, J. S. (2013). Opening the black box of contract renegotiations : An analysis of road concessions in Chile, Colombia and Peru. Latin American Economic Outlook.
Casady, C. B., and Baxter, D. (2020). “Pandemics, public-private partnerships (PPPs), and force majeure | COVID-19 expectations and implications.” Construction Management and Economics, Routledge, 38(12), 1077–1085.
Castelblanco, G., and Guevara, J. (2020). “Risk Allocation in PPP Unsolicited and Solicited Proposals in Latin America: Pilot Study in Colombia.” Construction Research Congress 2020, 1321–1329. https://doi.org/10.1061/9780784482889.141.
Castelblanco, G., Guevara, J., and Mendez-Gonzalez, P. (2021a). “Sustainability in PPPs : A Network Analysis.” Interdisciplinary Civil and Construction Engineering Projects. ISEC-11, El Cairo, 1–6.
Castelblanco, G., Guevara, J., Mesa, H., and Flores, D. (2020). “Risk allocation in unsolicited and solicited road public-private partnerships: Sustainability and management implications.” Sustainability (Switzerland), 12(11). https://doi.org/10.3390/su12114478.
Castelblanco, G., Guevara, J., Mesa, H., and Sanchez, A. (2021b). “Semantic Network Analysis of Literature on Public-Private Partnerships.” Journal of Construction Engineering and Management, 147(5), 1–16. doi: https://doi.org/10.1061/(ASCE)CO.1943-7862.0002041.
de Castro Silva e Neto, D., Oliveira Cruz, C., and Miranda Sarmento, J. (2019). “Renegotiation of transport public private partnerships: Policy implications of the Brazilian experience in the Latin American context.” Case Studies on Transport Policy, Elsevier, 7(3), 554–561.
DNP. (2019). INFORME TRIMESTRAL DEL REGISTRO ÚNICO DE ASOCIACIONES PÚBLICO PRIVADAS (RUAPP).
Engel, E., Fischer, R., and Galetovic, A. (2020). “Public-private partnerships: Some lessons after 30 years.” Regulation, 43(3), 30–35.
Fellows, R. F., and Liu, A. M. M. (2008). Research methods for construction. Wiley Blackwell, John Wiley & Sons, Ltd, Singapore.
Grimsey, D., and Lewis, M. (2007). Public private partnerships: The worldwide revolution in infrastructure provision and project finance. Cheltenham, UK: Edward Elgar Publishing.
Guasch, J. L., Benitez, D., Portables, I., and Flor, L. (2014). The renegotiation of PPP contracts: An overview of its recent evolution in Latin America. International Transport Forum, Organisation for Economic Cooperation and Develoment (OECD), Paris, 1–28.
Guasch, J. L., Laffont, J. J., and Straub, S. (2008). “Renegotiation of concession contracts in Latin America. Evidence from the water and transport sectors.” International Journal of Industrial Organization, 26(2), 421–442.
Guevara, J., and Garvin, M. (2017). “Mapping the PPP Market in the U.S. and Canada: Participation and Interaction of Private Firms between 1990 and 2013.” Advances in Public-Private Partnerships, American Society of Civil Engineers, Reston, VA, 197–210. https://doi.org/10.1061/9780784480267.016.
Guevara, J., Garvin, M. J., and Ghaffarzadegan, N. (2017). “Capability Trap of the U. S. Highway System : Policy and Management Implications.” Journal of Management in Engineering, 33(4), 1–14. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000512.
Guevara, J., Garvin, M. J., and Ghaffarzadegan, N. (2020a). “The Forest and the Trees: a Systems Map of Governance Interdependencies in the Shaping Phase of Road Public-Private Partnerships.” Journal of Management in Engineering, 36((1)). DOI: https://doi.org/10.1061/(ASCE)ME.1943-5479.0000726.
Guevara, J., Salazar, J., and Garvin, M. J. (2020b). “Social Network Analysis of Road PPP Equity Markets in Canada, Chile, and the United States.” Journal of Management in Engineering, 36(5). https://doi.org/10.1061/(ASCE)ME.1943-5479.0000830.
Hodge, G. A. (2004). “The risky business of public–private partnerships.” Australian Journal of Public Administration, 63(December), 37–49.
Hodge, G. A., Greve, C., and Boardman, A. E. (2010). International Handbook on Public-Private Partnerships. Edward Elgar Publishing Limited.
Jooste, S. F., Levitt, R. E., and Scott, W. R. (2009). “Capacity, Legitimacy, and Interest: Toward a Framework for PPP Program Success.” Paper for the Lead 2009 Conference, South Lake Tahoe, CA, USA, 1–14.
Jooste, S. F., and Scott, W. R. (2011). “The Public-Private Partnership Enabling Field: Evidence From Three Cases.” Administration & Society, 44(2), 149–182.
Luna-Reyes, L. F., and Andersen, D. L. (2003). “Collecting and analyzing qualitative data for system dynamics : methods and models.” System Dynamics Review, 19(4), 271–296.
McGee, C., and Mayer, M. (2021). “Pitfalls and Potholes: Examining the Impacts of Covid-19 on the North Carolina Department of Transportation.” Public Works Management and Policy, 26(1), 13–18.
Osei-Kyei, R., and Chan, A. P. C. (2018). “Motivations for adopting unsolicited proposals for public-private partnership project implementation A survey of international experts.” Journal of Financial Management of Property and Construction, 23(2), 221–238.
Rojas, R., Bennison, G., Gálvez, V., Claro, E., and Castelblanco, G. (2020). “Advancing Collaborative Water Governance : Unravelling Stakeholders ’ Relationships and Influences in Contentious River Basins.” Water (Switzerland), 12(3316), 1–25. https://doi.org/10.3390/w12123316.
Salazar, J., Guevara, J., and Verhoest, K. (2021). “Forthcoming. ‘Inferential Analysis of Road Infrastructure PPP Sponsor Networks.’” Journal of Management in Engineering. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000971.
SECOP. (2021). “Contratos.gov.co.” <https://www.contratos.gov.co/consultas/inicioConsulta.do>.
Yescombe, E. R., and Farquharson, E. (2018). Public-Private Partnerships for infrastructure: Principles of policy and finance. Butterworth-Heinemann.
Information & Authors
Information
Published In
Construction Research Congress 2022
Pages: 50 - 58
History
Published online: Mar 7, 2022
Authors
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.