Success Factors for Public-Private Partnership Infrastructure Projects in Vietnam

Phong Thanh Nguyen, Veerasak Likhitruangsilp, Masamitsu Onishi

Abstract


Infrastructure projects require a great amount of capital investment resulting from their tremendous size, complexity, and risk. Due to the limitation of public finances, the private sector is invited to participate in infrastructure project development. The private sector can entirely or partially invest in an infrastructure project in the form of public-private partnership (PPP) scheme, which has been an attractive option for several developing countries, including Vietnam. Unfortunately, despite the PPP scheme will improve project efficiencies and attract capital investments of private investors, the success of PPP implementation is not guaranteed. This paper investigates the critical success factors (CSFs) of PPP infrastructure projects in Vietnam. Relevant data were collected through in-depth interviews with six PPP experts and questionnaire surveys with 150 interviewees, and then analyzed by the word cloud technique and the one-way analysis of variance (ANOVA) test. The CSFs were ranked based on the viewpoints of the public sector, the private sector, and the PPP consultants. The outcomes show that there was no significant difference in the perceptions of all three parties concerning the success factors for PPP infrastructure projects in Vietnam. The top five critical success factors are (1) timely land acquisition and appropriate compensation, (2) financial capacity of the private sector, (3) effective project management, (4) favorable and complete legal framework and regulations, and (5) financial feasibility and attraction. Recognizing the CSFs is indispensable to ensure the success of PPP infrastructure project implementation.

Keywords


critical success factor (CSF); infrastructure projects; public-private partnership (PPP); Vietnam; word cloud technique.

Full Text:

PDF

References


A. P. C. Chan, D. W. M. Chan, Y. H. Chiang, B. S. Tang, E. H. W. Chan, and K. S. K. Ho, "Exploring critical success factors for partnering in construction projects," Journal of Construction Engineering and Management, vol. 130, pp. 188-198, Apr. 2004.

S. T. Do, V. Likhitruangsilp, M. Onishi, and P. T. Nguyen, "Different perceptions of concern factors for strategic investment of the private sector in public - private partnership transportation projects," ASEAN Engineering Journal, vol. 05, pp. 05-25, Dec. 2016.

D. Giang, and L. Pheng, "Critical factors affecting the efficient use of public investments in infrastructure in Vietnam," Journal of Infrastructure Systems, pp. 0071-00710, Sep. 2015.

A. P. Chan, P. T. Lam, D. W. Chan, E. Cheung, and Y. Ke, "Critical success factors for PPPs in infrastructure developments: Chinese perspective," Journal of Construction Engineering and Management, vol. 136, pp. 484-494, May. 2010.

S. M. Levy, Build, operate, transfer: Paving the way for tomorrow's infrastructure, John Wiley & Sons, New York, 1996.

K. Rintala, D. Root, G. Ive, and P. Bowen, "Organizing a bidding competition for a toll road concession in South Africa: the case of Chapman’s peak drive," Journal of Management in Engineering, vol. 24, pp. 146-155, Jul. 2008.

C. Fernandes, M. Ferreira, and F. Moura, "PPPs—True financial costs and hidden returns," Transport Reviews, vol. 36, pp. 207-227, Sep. 2016.

A. P .C. Chan, and E. Cheung, Public Private Partnerships in International Construction: Learning From Case Studies, Routledge, 2014.

A. A. Hamid, and Z. Mansor, "Client's readiness assessment success factors for outsourcing software projects," International Journal on Advanced Science, Engineering and Information Technology, vol. 6, pp. 820-827, Nov. 2016.

M. Zammani, and R. Razali, "An empirical study of information security management success factors," International Journal on Advanced Science, Engineering and Information Technology, vol. 6, pp. 904-913, Nov. 2016.

J. F. Rockart, "Current uses of the critical success factors process," in Proc. of the Fourteenth Annual Conference of the Society for Information Management, 1982.

L. C. M. Tang, B. Atkinson, and R. R. Zou, "An entropy-based SWOT evaluation process of critical success factors for international market entry: a case study of a medium-sized consulting company," Construction Management and Economics, vol. 30, pp. 821-834, Jul. 2012.

W. Zou, M. Kumaraswamy, J. Chung, and J. Wong, "Identifying the critical success factors for relationship management in PPP projects," International Journal of Project Management, vol. 32, pp. 265-274, Feb. 2014.

B. Esmaeili, E. Pellicer, and K. R. Molenaar, "Critical Success Factors For Construction Projects," in Project Management and Engineering Research, Proc. of the 18th International AEIPRO Congress, 2016.

P. V. Nguyen, P. T. Nguyen, D. B. V. Huynh, and L. H. T. T. Q. Nguyen, "Critical factors affecting the happiness: A Vietnamese perspective," International Journal of Economic Research,. vol. 14, pp. 145-152, Jan. 2017.

Iram, N., B. Khan, M. S. Ahmad, and U. F. Sahibzada, ”Critical factors influencing the project success: an analysis of projects in manufacturing and construction industries in Punjab, Pakistan," International Journal of Business Studies Review, vol. 01, pp. 41-52, Mar. 2017.

J. Won, G. Lee, C. Dossick, and J. Messner, "Where to focus for successful adoption of Building Information Modeling within organization," Journal of Construction Engineering and Management, vol. 139, pp. 0141-01410, Nov. 2013.

G. Aerts, T. Grage, M. Dooms, and E. Haezendonck, "Public-private partnerships for the provision of port infrastructure: an explorative multi-actor perspective on critical success factors," The Asian Journal of Shipping and Logistics, vol. 30, pp. 273-298, Dec. 2014.

S. Ismail, "Critical success factors of public private partnership (PPP) implementation in Malaysia", Asia-Pacific Journal of Business Administration, vol. 5, pp. 06-19, Jan. 2013.

J. K. Pinto, and J. G. Covin, "Critical factors in project implementation: a comparison of construction and R&D projects," Technovation, vol. 9, pp. 49-62, May, 1989.

M. Parfitt, and V. Sanvido, "Checklist of critical success factors for building projects," Journal of Management in Engineering, vol. 9, pp. 243-249, Jul. 1993.

R. Morledge, and K. Owen, "Critical success factors in PFI projects," in Annual ARCOM Conference, 1998.

L. Qiao, S. Q. Wang, R. L. Tiong, and T. S. Chan, "Framework for critical success factors of BOT projects in China," The Journal of Structured Finance, vol. 7, pp. 53-61, Aug. 2001.

B. Li, A. Akintoye, P. J. Edwards, and C. Hardcastle, "Critical success factors for PPP/PFI projects in the UK construction industry," Construction management and economics, vol. 23, pp. 459-471, Jun. 2005.

M. Kashey, "Critical success factors for Build Operate Transfer (BOT) projects: lessons learned from airport projects," M. Sci. Thesis, Middle East Technical University, Aug. 2011.

T. E. Kwofie, S. Afram, E. Botchway, "A critical success model for PPP public housing delivery in Ghana," Built Environment Project and Asset Management, vol. 6, pp. 58-73, Jan. 2016.

S. O. Babatunde, S. Perera, L. Zhou, and C. Udeaja, "Stakeholder perceptions on critical success factors for public-private partnership projects in Nigeria," Built Environment Project and Asset Management, vol. 6, pp. 74-91, Jan. 2016.

P. T. Nguyen, and V. Likhitruangsilp, "Identification risk factors affecting concession period length for public-private partnership infrastructure projects," International Journal of Civil Engineering and Technology, vol. 8, pp.342-348, Jun. 2017.

S. A. Barrett, J. P. Spillane, and J. B. Lim, "Early implementation of building information modeling into a cold-formed steel company: providing novel project management techniques and solutions to industry," American Journal of Civil Engineering and Architecture, vol. 1, pp. 164-173, Nov. 2013.

R. L. K. Tiong, K. Yeo, and S. McCarthy, "Critical success factors in winning BOT contracts," Journal of Construction Engineering and Management, vol. 118, pp. 217-228, Jun. 1992.

R. L. K. Tiong, "CSFs in competitive tendering and negotiation model for BOT projects," Journal of Construction Engineering and Management, vol. 122, pp. 205-211, Sep. 1996.

I. D. Ozdoganm, and M. T. Birgonul, "A decision support framework for project sponsors in the planning stage of build-operate-transfer (BOT) projects," Construction Management and Economics, vol. 18, pp. 343-353, Oct. 2000.

M. Jefferies, R. Gameson, and S. Rowlinson, "Critical success factors of the BOOT procurement system: reflections from the Stadium Australia case study," Engineering Construction and Architectural Management, vol. 9, pp. 352-361, Jul. 2002.

J. Dima, "Success and failure mechanisms of public private partnerships (PPPs) in developing countries: Insights from the Lebanese context," International Journal of Public Sector Management, vol. 17, pp. 414-430, Oct. 2004.

X. Zhang, "Critical success factors for public–private partnerships in infrastructure development," Journal of Construction Engineering and Management, vol. 131, pp. 03-14, Jan. 2005.

J. Marcus, "Critical success factors of public private sector partnerships: A case study of the Sydney SuperDome," Engineering, Construction and Architectural Management, vol. 13, pp. 451-462, Oct. 2006.

J. Carol, and C. Sang-Ok, "Success factors: public works and public‐private partnerships," International Journal of Public Sector Management, vol. 21, pp. 637-657, Dec. 2008.

X. Meng, Q. Zhao, and Q. Shen, "Critical success factors for Transfer-Operate-Transfer urban water supply projects in China," Journal of Management in Engineering, vol. 27, pp. 243-251, Oct. 2011.

M. J. Gannon, and N. J. Smith, "An effective outline business case to facilitate successful decision‐making," Construction Management and Economics, vol. 29, pp. 185-197, Feb. 2011.

S.T. Ng, Y. M. W. Wong, and J. M. W. Wong, "Factors influencing the success of PPP at feasibility stage – A tripartite comparison study in Hong Kong," Habitat International, vol. 36, pp. 423-432, Oct. 2012.

S. O. Babatunde, A. Opawole, and O. E. Akinsiku, "Critical success factors in public‐private partnership (PPP) on infrastructure delivery in Nigeria," Journal of Facilities Management, vol. 10, pp. 212-225, Jun. 2012.

C. Esther, P. C. C. Albert, and K. Stephen, "Factors contributing to successful public private partnership projects: Comparing Hong Kong with Australia and the United Kingdom," Journal of Facilities Management, vol. 10, pp. 45-58, Feb. 2012.

L. Tang, Q. Shen, M. Skitmore, and E. W. L. Cheng, "Ranked critical factors in PPP briefings," Journal of Management in Engineering, vol. 29, pp. 164-171, Apr. 2012.

G. Mladenovic, N. Vajdic, B. Wündsch, and A. Temeljotov-Salaj, "Use of key performance indicators for PPP transport projects to meet stakeholders’ performance objectives," Built Environment Project and Asset Management, vol. 3, pp. 228-249, Apr. 2013.

A. B. Yusof, and B. Salami, "Success factors for Build Operate Transfer (BOT) power plant projects in Iran," International Journal of Modern Engineering Research, vol. 3, pp. 334-320, Jan. 2013.

B. G. Hwang, X. Zhao, and M. J. S. Gay, "Public private partnership projects in Singapore: Factors, critical risks and preferred risk allocation from the perspective of contractors," International Journal of Project Management, vol. 31, pp. 424-433, Apr. 2013.

J. Liu, P. E. D. Love, J. Smith, M. Regan, and P. Davis, "Life cycle critical success factors for public-private partnership infrastructure projects," Journal of Management in Engineering, vol. 31, pp. 0731-0737, Sep. 2014.

G. Dang, and L. S. Pheng, Infrastructure investments in developing economies. Springer, 2015.

S. T. Do, V. Likhitruangsilp, M. Onishi, and P. T. Nguyen, "Impacts of risk factors on the performance of Public-Private Partnership transportation projects in Vietnam," ASEAN Engineering Journal, vol. 6, p.01-24, Jan. 2017.

A. Hidayatno, A. O. Moeis, A. Sutrisno, and W. Maulidiah, "Risk impact analysis on the investment of drinking water supply system development using project risk management," International Journal of Technology, vol. 6, pp. 894-904, Oct. 2015.

N. D. Long, S. Ogunlana, T. Quang, and K. C. Lam, "Large construction projects in developing countries: a case study from Vietnam," International Journal of Project Management, vol. 22, pp. 553-561, Oct. 2004.

S. Yun, W. Jung, S. H. Han, and H. Park, "Critical organizational success factors for public private partnership projects - a comparison of solicited and unsolicited proposals," Journal of Civil Engineering and Management, vol. 21, pp. 131-143, Jan. 2015.

R. Osei-Kyei, and A.P.C. Chan, "Review of studies on the Critical Success Factors for Public–Private Partnership (PPP) projects from 1990 to 2013," International Journal of Project Management, vol. 33, pp. 1335-1346, Aug. 2015.

K. Iyer, and M. Sagheer, "Hierarchical structuring of PPP risks using interpretative structural modeling," Journal of Construction Engineering and Management, vol. 136, pp. 151-159, Feb. 2010.




DOI: http://dx.doi.org/10.18517/ijaseit.10.2.5839

Refbacks

  • There are currently no refbacks.



Published by INSIGHT - Indonesian Society for Knowledge and Human Development