Critical success factors and readiness index
Despite the efforts being made globally to achieve sustainable development through public-private partnership projects, the number of canceled projects remains higher than concluded projects. Yet, we know very little about what determines the success of a PPP project. Review of the critical success factors (CSFs) that determine the success of PPP projects are outdated, and even when some information is available, it almost exclusively relies on qualitative case examinations. This paper attempts to fill this gap by first reviewing the existing literature to determine the list of CSFs. Then, via regression modeling, the paper attempts to determine a quantitative readiness index on the success of PPPs via four main groups: macroeconomic situation, favorable market conditions, governance & political climate, and regulatory & institutional environment. Based on the literature review, the study reveals the importance of nine CSFs: project type, project sector, contract period, private ownership, project financials, change in nations’ Gross Domestic Product (GDP), the consumer price index (CPI), income level target of the project, and the number of bids for a project. Using these factors as independent variables in a multivariate regression model, the paper finds that the factors identified explain over 71% of the variations in PPP success.
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