Policy, Management and Finance of Public-Private Partnerships

"The editors draw upon a considerable amount of contributions from affiliated academic and practical experts with experience across a vast geographical spread.... Readers will find it invaluable in expanding their academic and practical knowledge of the subject." (Building Engineer, March 2009)

Akintola Akintoye, Professor of Construction Economics and Management and Head of School, School of Built and Natural Environment, University of Central Lancashire, Preston, UK Matthias Beck, Professor of Public Sector Management, The York Management School, University of York, UK

Foreword xi Contributors xiii Acknowledgements xxiii Introduction xxv Part One PPP Policy 1 Chapter 1 Private Finance Initiative in Use 3 Ezekiel Chinyio and Rod Gameson 1.1 Introduction 3 1.2 The Private Finance Initiative 4 1.3 UK Governments Influence on the Use of PFI 5 1.4 Private Sector Tasks in PFI 6 1.5 Establishing PFI Contracts 6 1.6 Forms of Finance Used in PFI 8 1.7 Performance of PFI Schemes A Theoretical Perspective 10 1.8 Improving the Performance of PFI 14 1.9 Performance of PFI Schemes An Empirical Review 14 1.10 A Generic Overview of PFI Schemes 19 1.11 Comparative Studies 20 1.12 Conclusion 20 Chapter 2 Using the Private Sector to Finance Capital Expenditure: The Financial Realities 27 Jean Shaoul 2.1 Introduction 27 2.2 The Control of PFI 30 2.3 Post-implementation Evaluation of PFI 34 2.4 Conclusion 42 Chapter 3 Obstacles to Accountability in PFI Projects 47 Darinka Asenova and Matthias Beck 3.1 Introduction 47 3.2 Finance Capital and Institutional Decision Making 51 3.3 Conclusion 61 Chapter 4 Refinancingand Profitability of UK PFI Projects 64 Steven Toms, Darinka Asenova and Matthias Beck 4.1 Introduction 64 4.2 PFI Finance and Value for Money 65 4.3 Mechanisms and Policies of Refinancing 69 4.4 PFI Profits and Refinancing 72 4.5 Conclusion 77 Chapter 5 The Dedicated PPP Unit of the South African National Treasury 82 Philippe Burger 5.1 Introduction 82 5.2 The Rationale for PPPs 83 5.3 The Rationale for a Dedicated PPP Unit 84 5.4 A Brief History of PPPs and the PPP Unit in South Africa 86 5.5 The Role of the South African Dedicated PPP Unit 90 5.6 Future Challenges 93 5.7 Conclusion 95 Chapter 6 PPP in Greenfield Airport Development: A Case Study of Cochin International Airport Limited 97 Thillai A. Rajan, Sheetal Sharad and Sidharth Sinha 6.1 Introduction 97 6.2 Private Participation in New Airport Development 99 6.3 Indian Aviation Sector 103 6.4 The Cochin International Airport Project 105 6.5 Performance of CIAL 112 6.6 Summary and Lessons 117 Chapter 7 PPPs for Physical Infrastructure in DevelopingCountries 123 Akintola Akintoye 7.1 Introduction 123 7.2 An Overview of Public-Private Partnerships 124 7.3 PPP: Developed Economies 125 7.4 PPP: Developing Economies 127 7.5 PPP: Analysis of Private Sector Participation 129 7.6 Discussion 138 7.7 Conclusions 141 Chapter 8 Team Buildingfor PPPs 145 Mohan M. Kumaraswamy, Florence Y.Y. Ling and Aaron M. Anvuur 8.1 Introduction 145 8.2 Integrating and Sustaining PPP Teams 147 BLBK049-Akintoye July 30, 2008 13:38 8.3 Hong Kong Perspectives of PPP Teams 149 8.4 Singapore Perspectives of PPP Teams 153 8.5 Integrating PPP Project Teams 156 8.6 Selecting Project Consortium Teams 156 8.7 Concluding Observations 160 Part Two PPP Finance 163 Chapter 9 PPP Infrastructure Investments: Critical Aspects and Prospects 165 Demos C. Angelides and Yiannis Xenidis 9.1 Introduction 165 9.2 Critical Issues in Financing PPP Projects 167 9.3 Prospects for PPP Infrastructure Development 171 9.4 Conclusion 178 Chapter 10 Patterns of Financing PPP Projects 181 Sudong Ye 10.1 Introduction 181 10.2 General Patterns of Financing PPP Projects 186 10.3 Choice of Financing Patterns 195 10.4 Summary 196 Chapter 11 PPP Financingin the USA 198 Arthur L. Smith 11.1 Introduction 198 11.2 PPP Financing Models in the US 200 11.3 Case Studies 206 11.4 Conclusions 210 Chapter 12 Financial Modelling of PPP Projects 212 Ammar Kaka and Faisal Alsharif 12.1 Introduction 212 12.2 Research in PPP Financial Modelling 213 12.3 Cost Models 214 12.4 Occupancy Cost 215 12.5 Cash Flow Models 217 12.6 PFI Financial Modelling in Practice 217 12.7 An Example of a PFI Financial Model for Schools 224 12.8 Conclusion 226 Chapter 13 Application of Real Options in PPP Infrastructure Projects: Opportunities and Challenges 229 Charl