Criteria for Selecting the Private-Sector Partner in Public–Private Partnerships

TLDR

Selecting the appropriate private‑sector partner is a key challenge in international PPP infrastructure projects. The study aims to develop a best‑value source selection methodology that defines appropriate selection criteria. The authors identified and classified selection criteria into financial, technical, safety/health/environmental, and managerial packages, then statistically analyzed their relative importance using a structured questionnaire and various statistical tests. The results provide a multicriteria best‑value source selection framework and objective/subjective criteria to aid in choosing the right private‑sector partner for PPP projects.

Abstract

A critical issue in public–private partnerships (PPPs) in international infrastructure development is the selection of the right private-sector partner. This necessitates a best value source selection methodology in which the establishment of a set of appropriate selection criteria is a prerequisite. Various important selection criteria have been identified through a literature review of previous studies on critical success factors; experience drawing and lessons learning from international PPP practices; examination of selection criteria used in worldwide PPP projects; and interviews/correspondence with international PPP experts and practitioners. These identified criteria are classified into four evaluation packages for PPP projects in general: (1) financial, (2) technical, (3) safety, health, and environmental, and (4) managerial. The relative importance of these evaluation packages and the relative significance of the criteria within each package have been statistically analyzed based on a structured questionnaire survey of worldwide PPP expert opinions. These statistical analyses include validity and reliability analysis, Mann Whitney U tests, direct comparisons of mean criterion significance indexes and criterion rankings between respondents across public, private, and academic sectors, and a general rank agreement analysis across sectors for each evaluation package. These research outputs would facilitate the formulation of a multicriteria best value source selection methodology for PPP projects in general and the development of both objective and subjective evaluation criteria to select the right private-sector partner for a particular PPP project.