• International conference on construction engineering and project management
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• 2011.02a
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• pp.124-131
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• 2011

Public infrastructure is crucial to promote and sustain a sustainable economic growth and a health community. A large amount of capital investment is generally required in infrastructure projects that motivate the involvement of the private sector in the delivery process. Various relationship-based procurement methods have been attempted to maximize value-for-money. In this paper, the problems and challenges that relationship-based procurement methods have been facing are explored. A particular focus is placed on the challenges for the public-private partnership (PPP) model. Possible strategies for adapting the PPP models in the post-Global Financial Crisis era are proposed and discussed. In addition, the challenges facing alliancing, which is one of the other important relationship-based procurement methods, are also examined. Views on infrastructure procurement in the future were sought from industry professionals via interviews and are reported in this paper as well.

• KSCE Journal of Civil and Environmental Engineering Research
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• v.31 no.4D
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• pp.585-594
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• 2011

A variety of PPP (Public-Private Partnerships) schemes including BOT, TOT (Transfer-Operate-Transfer), and divestiture has been employed in the Chinese water sector. Although the two latter emerging models have been implemented in their full applications lately, there has been no follow-up for identification of opportunities and challenges inherent in those schemes in relation to the market participation of foreign investor. This study undertakes in-depth analysis on the TOT and divestiture projects in the SWOT (Strengths, Weaknesses, Opportunities, and Threats) matrix and measures the level of agreement on each SWOT through a survey among the Chinese water market experts. The findings can be used to support foreign investors in managing the weaknesses and threats that, unless properly managed, can be evolved into potential project risks, while fully benefiting from the strengths and opportunities of the two schemes.

• Korean Journal of Construction Engineering and Management
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• v.20 no.5
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• pp.137-148
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• 2019

Many construction developers have tried to develop the international PPP (Public-Private Partnership) projects but frequently failed to gain loan investor approval from loan investor. Many of these failures were caused by the risk attitude gaps among project stakeholder. This study aims to compare the risk attitude between the construction investor and loan investor. This study investigated how much differently 21 construction investors and 21 loan investor recognize the risk magnitude corresponding to the same three risk status of 27 risk factors. Construction investors show a more risk-seeking attitude than loan investor in 58 of 81 risk status. Loan investors show a more risk-averse attitude than construction investors in 9 risk factors. These results will contribute to developing the successful PPP project by reducing the risk perception gap between construction investors and loan investors.

• Proceedings of the Korea Water Resources Association Conference
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• 2022.05a
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• pp.211-211
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• 2022

The marketization reform from the open-door policy in 1978 was not only booming export-oriented industries with foreign investment but also expanding the role of private actors in the Chinese water sector. Private Sector Participation (PSP) has become an important element in developing urban infrastructure by providing better services with advanced facilities. The rapid development of PSP-driven urban water infrastructure in China has a positive impacted on Chinese economic development, particularly in coastal areas. PPPs in some coastal areas have successfully spread out over China since China applied the first Build-Operate-Transfer (BOT) mode in the water sector in the early 1990s. The market-oriented water and wastewater, Public-Private Partnership (PPP) mechanism in the initial period of China has been transformed into a state-dominated PPP mechanism. The development pattern of the water and wastewater PPPs in China has been divided in four stages: the first period from 1984 to 2002, the second period from 2003 to 2008, the third period from 2009 to 2014, and the last period after 2015. The study aims to investigate the successful process of water and wastewater PPPs in local areas through five socioeconomic elements: export-oriented economic strategy, urbanization, cheap land policy, infrastructure investment, and water issues and climate change. In addition, the study focuses on analyzing the extent to which the Chinese government re-asserted its control over the PPP mechanism by classifying five elements in three different development Phases from early 2000 to 2020. The Jiangsu Province in the estern coastal area has actively invited PPP projects in the water and wastewater sectors. The successful introduction and rapid growth of PPPs in the urban water infrastructure has made the province an attractive area for a foreign investor.

• International conference on construction engineering and project management
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• 2011.02a
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• pp.132-141
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• 2011

Australia has joined many governments to adopt public-private partnership (PPP) as a major strategy for procuring infrastructure for decades. However, failures have occurred although the market has been considered to be a mature and sophisticated one. Failures have typically been traced back to inappropriate economic evaluation and a lack of value-for-money. In particular, a literature review has identified that there was no holistic consideration on the evaluation of procurement transactions of PPP projects. The transaction costs of PPPs were not handled properly. In this paper, theories of transaction cost economics are proposed for the purpose of such a holistic institutional economic evaluation. These theories are analysed in order to identify potential critical success factors for a strategic infrastructure procurement framework. The potential critical success factors are identified and grouped into a number of categories that match the theories of transaction cost economics. These categories include (1) Asset Specificity, (2) Organizational Capability, (3) Transaction Frequency, (4) Behavioural Uncertainty, and (5) Environmental Uncertainty. These potential critical success factors may be subject to an empirical test in the future. The proposed framework will offer decision makers with an insight into project life cycle economic outcomes needed to successfully deliver PPPs.

• Journal of Climate Change Research
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• v.3 no.4
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• pp.281-291
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• 2012

Forests act as carbon sinks and also improve water resources and biodiversity to climate change. Secure funding, administrative support, and sustainable management systems are essential to conserve forests and to implement international forestry related projects to climate change. Public private partnership (PPP) could be an effective way for forestry sector in developing countries. Awareness analysis should be preceded in order to encourage participation of enterprises for the diversification of funding and the enhancing quality of projects. We conducted a survey targeting more than 129 private enterprises for awareness analysis. As a result, lack of information, complexity of processes and low profit resulted in low interest on forest projects from private enterprises. Improving awareness of recipient countries on forest resources, financial and institutional supports from the public sector, information sharing, performance management and equal partnership between sectors were suggested to encourage PPP in international forestry related projects to climate change.

• Korean Journal of Construction Engineering and Management
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• v.19 no.5
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• pp.10-21
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• 2018

This study analyzes difficulties of enterprise activities in Chinese construction market by surveys on early entrants and interviews with experts. This study also suggests future strategy to enter the market by using inducement coefficient model. Korean construction companies in China are under heavy pressure to maintain requirement of licenses, despite recent deregulation. They are in dire predicament for market entry due to the Foreign Direct Investment System. It is almost impossible to participate in public projects and also it is not easy to do PPP projects. Therefore, Korean government should make more efforts to solve those issues through negotiations in FTA and GPA. For future expansion in Chinese construction market, it is highly recommended to boost cooperation models between Korea and China according to the empirical results of inducement coefficient model. Korean companies should collaborate with Chinese companies in some fields: smart city, environment and water treatment. Also, Korean government should support Korean companies by diplomatic means such as requesting for further opening of China's market. In GPA or GATS negotiation, Korean government should ask Chinese government that Korean companies can obtain order independently (without joint venture with Chinese companies) in China. Lastly, Korean construction companies should participate in construction projects ordered by international organizations such as ADB, AIIB.

• Journal of Korean Society of Transportation
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• v.28 no.2
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• pp.135-150
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• 2010

This paper focuses on finding out which covenants are different among the concession agreements of Korean BTO projects and how these influenced IRR(Internal Rate of Return). That is, to figure out the political and economical determinants of IRR by analyzing the concession agreements which are the basic contract of implementing projects. As IRR is an index of profitability, so spread is an indicator of risk to collect debts. That's the reason why the analysis of spread is included. For the empirical analysis, the data of concession agreements for 75 projects and financial models are used. These 75 concession agreements are contracted from 1995 to 2008. The dependent variables are after tax nominal IRR and the spread of long term interest rates of 75 BTO projects. The independent variables are project's proceeding factors, the feasibility variables, the variables related to financial character and the variables related to covenants or the government's policy. The analysis shows that IRR has been influenced by the equity level of financial investors, the national government managed projects, the projects with minimum revenue guarantee (MRG), etc. And the equity level of financial investors, the national government managed projects and the implementation of supplementary project have an effect on spread also.

• International conference on construction engineering and project management
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• 2015.10a
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• pp.30-31
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• 2015

PPPs in international development cooperation can be challenging due limited capacities in the country, weaknesses in terms of policy and legislative frameworks, differences in mindsets, values, work ethics and hierarchical structures as well as cultural issues. These can lead to misunderstandings and implementation problems. However, a careful assessment of the situation on the ground, stakeholder analysis and needs assessment can help to identify potential bottlenecks and address capacity constraints that could slowdown operations. A sound understanding of local power dynamics and work practices can help to put in place an exit strategy which will enhance the projects' sustainability. Making sure that goals and objectives are understood in the same way by all partners, establishing an ongoing and respectful dialogue between them, as well as transparent implementation and monitoring mechanisms can also contribute to the PPP's success and increase the likeliness to make a difference in the lives of those in needs.

• KDI Journal of Economic Policy
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• v.32 no.2
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• pp.144-170
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• 2010

This paper considers the effect of various types of procurement auction system on competition focusing on the rate of successful bidding. We analyze the number of bidders and the rate of successful bids using online procurement data of the Public Procurement Service. The average number of bidders is 301 and the average rate of successful bids is 87.42% while the weighted average rate is 75.13%. These numbers show that there is quite strong competition among bidders and the rate is lower as the expected price is higher. When we analyze the data of price procurement auction, the rate is also shown to be lower as the expected price is higher. Furthermore, the rate decreases as the number of bidders increases which naturally makes the competition stronger. Meanwhile, the analysis finds that the inclusion of the onsite bidding, the PQ(Pre-Qualification) result, or major-10 winning companies cannot explain the rate much in our data. In case of turnkey-alternative, the average rate of successful bidding for 484 cases record 90.20%. The average is 84.89% with 120 alternatives and 91.97% with 364 cases of turnkey. The reason why the rate of turnkey-alternative is lower than that of price procurement auction is the lack of competition as well as the systematic difference. By setting up a model, we are able to explain the difference in rate caused by the respective reason. When we suppose there are 3 bidders in case of price procurement auction for a project that exceeds 100 billion won, the rate is expected to be around 64%. This implies that difference of 26% is caused by the systemic difference and 3% by the lack of competition. Therefore, we conclude that the difference in rate between turnkey-alternative and price procurement auction is caused mainly by the systemic difference. In case of PPP(Public Private Partnership) projects, among 154 projects in total, only 40% has more than 2 bidders that compete. The average number of bidders is 1.88 which is less than 2, and the average rate of successful bids is 90%. In sum, under the price procurement auction, there is strong competition which is reflected by the rate of successful bids. However, there is room to decrease the rate by strengthening the competition under the turnkey-alternative. Also with PPP projects, we expect the rate can be steadily reduced with revived competition among bidders.