A decision-making framework to select a public-private partnership scheme for infrastructure development in Vietnam
Creators: name: VU, Hang
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 400504
subject: Construction engineering

description: Public-Private Partnership (PPP) is recognised as a procurement strategy for governments to mobilise capital, skills and expertise of the private sector to deliver key infrastructures. A growing number of PPP schemes, as of a contract arrangement between public and private sectors such as Build-Operate-Transfer (BOT) and Design-Build-Operate-Maintain (DBOM), have been formed and used worldwide to deliver public services. Within the broad spectrum of PPP arrangements, several variations of PPP schemes have been developed and are on the increase. Every PPP scheme has its own pros and cons and application, however understanding of different PPP schemes varies. The lack of common understanding and a systematic categorisation of PPP schemes pose challenges for practitioners in choosing the most appropriate one to best deliver the project. Despite that, few systematic studies have focused on the selection of an appropriate PPP scheme. A simple method is lacking to enable decision-makers to compare among PPP scheme alternatives. In light of this, through an in-depth literature review about various types of PPP schemes are currently being used worldwide, this study was initiated to create common interpretation by classifying thoroughly different types of PPP schemes, and to develop a decision-making framework that assists the decision-makers to choose the right PPP scheme for procuring a specific infrastructure project. <br><br>

Similar to many other developing countries where securing investment for infrastructure is a major challenge, Vietnam is no exception. The Vietnamese Government has been attempting to utilise PPPs to respond to the rapid development of the economy and urgent needs of infrastructure. Until 2018, despite the considerable attempt of the government to promote PPP programmes, only 194 PPP projects have been implemented with 120 BOT, 71 BT and 3 BOO projects. Over the past 20-year practice in Vietnam, eight PPP schemes, including Build-Transfer (BT), have been regulated into the legal system. Yet, in reality, only three out of the eight PPP schemes have been practised because of an absence of a formal guidance in selecting the most suitable scheme for an infrastructure development project.<br><br>

This research developed a decision-making framework that aims to select an optimal PPP scheme for a given project. The five main objectives of the research are: (i) to categorise different types of PPP schemes, then to conduct a Strengths-Weaknesses-Opportunities-Threats (SWOT) analysis of different types of PPP families; (ii) to identify the set of criteria associated with the selection of PPP schemes; (iii) to ascertain the current PPP implementation practice in Vietnam; (iv) to develop a decision-making framework for selecting PPP schemes; and (v) to validate the proposed framework in procuring infrastructure projects in Vietnam.<br><br>

These objectives were obtained through an in-depth literature review of previous studies, governments and organisations¿ reports and guidelines that helped to review and identify principles and procedures of PPPs, different types of PPP schemes, adoption drivers and PPP process. With further help of international experts from both academic and industry practitioners, a comprehensive set of 25 criteria was identified and used to develop a framework to select an appropriate PPP scheme. Based on the literature review outcomes, more than 20 PPP schemes were categorised into four different families: O&amp;M, Public-financed, Private-financed and Hybrid family. SWOT analyses were conducted to further understand the advantages and disadvantages of different PPP families. Then, an international questionnaire survey was conducted to collect data on the selection criteria of four different PPP families by a series of statistical analysis. The results from the comparative analysis between developed and developing countries provided an in-depth understanding of the differences and similarities of how a scheme is chosen. Then, the study scope was narrowed down to focus on the circumstances that happens in Vietnam. Several interviews were carried out in Vietnam to further explore the circumstances that happens in Vietnam. Finally, an ANP-based decision-making framework for the selection of PPP scheme was developed and Group 4: Hybrid family was used as an example. The validation of the framework was done using interview.<br><br>

This research has made significant theoretical and practical contribution to the PPPs research and practice. The theoretical contributions include (i) a systematic categorisation of PPP schemes into four families, (ii) a complete set of key criteria for selection of PPP scheme, (iii) an ANP-based model to conquer the interdependence of key selection criteria when developing the decision-making framework.<br><br>

The practical contributions include (i) a detailed SWOT analysis, which provides an efficient way to understand different PPP schemes, and (ii) an ANP-based model decision-making framework, which helps the government and the private sector to choose a suitable PPP scheme for procuring an infrastructure project. The framework can be used as a practical tool that helps decision-makers to assess and compare different PPP schemes, then decide on the most suitable one. The decision-making framework can further improve into a user-friendly tool. Since Group 4: Hybrid family has the most application in Vietnam (7 out of 8 PPP schemes), the research chooses to develop a decision-making framework based on this group to demonstrate its application. This framework is also applicable to other developing countries that share similar characteristics with Vietnam.