Pre-requisites for Success of Public Private Partnership Projects in Palestine

Abstract

Public Private Partnership (PPP) is a well established method for the purpose of incorporating the private sector to deliver a service or implement a project. Palestinian Authority has adopted the strategy of private sector partnership in infrastructure projects. Most of these partnership projects are unsuccessful. The aim of the study is to explore the critical successes factors of PPP projects to be assessed and establish a framework for effective implementation of PPP projects. The aim of this study has been achieved through comprehensive literature review for PPP projects, in-depth analysis of current situation of partnership projects, semi-structured interviews with experts to provide a descriptive background and real information of all aspects of PPP projects, and finally a structured questionnaire using a purpose sample of 45 selected individuals from different sectors to determine the critical success factors of PPP projects. The questionnaire included 38 influential factors categorized under five main groups as follows: (1) technical factors; (2) financial and economic factors; (3) social factors; (4) political and legal factors; and (5) other factors. Research findings were triangulated to be used as the basis in establishing the framework of PPP projects. The framework is considered one system containing the procedures in each phase of the PPP project. It composed from six key phases as follows: (1) identification and preparation for project; (2) development of business case; (3) implementation arrangement and procurement; (4) negotiation and contract agreement; (5) contract management and service delivery; and (6) performance monitoring and contract compliance. The results indicated that the most effect group of success factors groups is the political and legal factors group, and this influences on investment in PPP projects. The critical success factors of PPP projects are stability of political situation, clear and detailed contract, existence of a sound economic policy, reliable delivery of service, analysis and allocation of risks, suitable legal framework, experienced private sector, profitability to the private sector, and accepted level of toll / tariff for a project. This study recommended for the government to create a legal system related to PPP application inPalestine, use the framework as a system for application of PPP projects, and start with small scale PPP projects. The study recommended for private sector to invest in PPP field. The study recommended for the community to conduct an awareness campaign to promote the concept of partnership.