Factors Contributing to the Success of Public-Private Partnership Projects in South Asian Countries: An Econometric Study

Abstract

This study examines the factors that contribute to the success of Public Private Partnership (PPP) projects in the South Asian region with an emphasis on project and contract attributes. The paper uses a panel data set on success and failure of the PPPs in five South Asian countries that reached financial closure between 1993 and 2016. For the regression analysis it uses logistic regression since the outcome variable is binary in nature. The findings indicate that projects in the information and communication technology sector and transport sector are more prone to failure compared to those in the energy sector. Additionally, a larger share of risks and responsibilities assumed by the private sector positively affects project outcomes. Price instability, as expected, lowers the likelihood of success, whereas development assistances improve it. Furthermore, local governments are found to be more efficient than their national counterparts, and smaller projects tend to achieve higher success rates than larger ones. Finally, the findings show that effective balancing of investment freedom and quality regulation is instrumental to PPP success.