PPP model is an important model which provides public products or services based on the coordination between the public sector and private sector. The implementation of PPP model is helpful for relieving the stress of insufficient funding for public sector and improving the efficiency of resource allocation. Comparing with traditional infrastructure project, PPP project involves many stakeholders, and the cooperation efficiency during the different stakeholders impacts the results of the project directly. Thus, it is important to explore the cooperation efficiency of PPP project. Based on grey clustering model, this paper evaluates the cooperation efficiency of PPP project. An evaluation index system including 36 indexes is established based on the aims and objectives of three stakeholders (public sector, private sector, and passengers). A case study of Beijing Metro Line 4 PPP project is implemented to verify the validity and applicability of the evaluation model. And the results showed that the cooperation efficiency of Beijing Metro Line 4 PPP project is relatively high. The model also provided insights into the shortage of the cooperation efficiency of Beijing Metro Line 4 PPP project. As such, the results can assist all stakeholders in adjusting the cooperation efficiency.
As the basement of the development for each career of national economy, national daily life and social production, public infrastructure, and services play important role for both improving the public living standards and enhancing the national economy development [
PPP model is a type of systematic cooperation relationship for long-term mutual benefit, which is established by the approach of signing the concession right agreement between the public sector and the private sector, including gain sharing, risk sharing, responsibility allocation among project financing, construction, and operation [
In Chinese construction practice, however, different trading parties of the PPP project often deviate from the goal of ‘win-win’, showing distinct barriers and strong confrontation. The government would like to gain more control to the project but not willing to provide adequate protection [
The rest of this article is organized as follows: the second section summarizes the related literature of the cooperation efficiency of PPP project; the third section proposes the cooperation efficiency evaluation index system for PPP project; the fourth section introduces the grey clustering model; in the fifth section, a case study is provided to evaluate the PPP project cooperation efficiency; conclusions are drawn in the sixth section.
The concept of stakeholder is mentioned by Dodd firstly; Mitchell et al. defined the ‘stakeholder’ as the groups without whose support to the organization would cease to exist [
The sustainable development of the stakeholder theory provides great research basis for the project stakeholder theory, and it begins to be implemented widely in the project management. The partnering relationship of the PPP project is established on the common interests of all stakeholders. As the PPP project involves many stakeholders and contains the interest from different stakeholders, the independence of different stakeholders will inevitably lead to many interest conflicts. Thus, the utilization of the stakeholder theory in the PPP project will be helpful to accurately analyze for the objective of the PPP project stakeholders, promote the successful implementation of the PPP project, improve the cooperation efficiency of the PPP project, reduce the cooperation dilemma, and maximize the social total utility. Yang and Zou (2014), Paletto et al. (2015), and some other scholars all apply social network model to analyze the interact relationship of stakeholders in the stakeholder analysis of the project or policy, to improve the identifying efficiency and accuracy of the stakeholders [
The cooperation efficiency of the PPP project can be evaluated from the project performance and whether each stakeholder reaches the expected purpose. Lebas (1995) defined the performance evaluation as the process of quantifying and reporting the validity of the activities which are applied to achieve the organization objectives [
In summary, many scholars have done a lot of research based on the impact of the input, output, and project management factors on PPP project cooperation efficiency. The results are abundant, but there are still some limitations. Firstly, the current studies mainly focus on the input, output, and capital benefit of the project itself for PPP project cooperation efficiency, but the comprehensive research for the value orientation of the stakeholders and project cooperation efficiency is very limited. Secondly, most studies utilize the game theory to analyze the cooperation efficiency of PPP project and focus on the control right to analyze the approach for improving cooperation efficiency, but the research from cooperation efficiency identification, evaluation, and dispose process is rare. As a result, applying the approach of reasonable control right allocation owns limited guiding and practical operability for improving cooperation efficiency. Therefore, based on the theories of PPP project cooperation efficiency, this paper starts with maximizing social total utility of the PPP project, defines the concession agreement period of PPP project as the evaluation scope, and purposes the PPP project cooperation efficiency evaluation model based on the grey clustering evaluation. Also, based on above model, this paper utilizes the relevant data of Beijing Metro Line 4 PPP project to research the cooperation efficiency in this case.
PPP project cooperation efficiency influences the objective coordination of the stakeholder and requires combining the profit and objectives of different stakeholders. As the PPP project involves many stakeholders and the profit presents diversification, the public utility is incorporated into the context of cooperation efficiency. Drawing on the perspective of welfare economics, the PPP project cooperation efficiency is defined as total social utility, which is the maximum total utility of the government, private sector, and public.
Index logic framework of PPP project cooperation efficiency is established through the horizontal dimension of project cycle framework Input-Output-Outcome-Impact (IOOI) and the vertical dimension of government, private sector, and public. IOOI is purposed by European Environmental Protection Agency, which is used to establish the analysis framework of the project environmental index; four dimensions can present the characteristics of the project from the process of approval, construction, and operation, and then the activities of the project whole life cycle can be presented completely [
Through PPP project, government plays many roles during the process of promoting the project. The government sometimes not only acts as the initiator or the leader of the project, but also serves as the profit and conflict adjuster between private sector and public. Therefore, from the IOOI aspect, the government mainly focuses on reducing financial input during the input stage and satisfying the public requirement in output stage, including whether the project owns reliable quality, satisfies public requirement and safety, and is of reasonable pricing. The government pays more attention to avoiding renegotiation and developing project smoothly in outcome stage. In impact aspect, the government takes main concern on promoting urban development, including the environmental influence of the project, promotion of the original economy development, and improvement of efficiency.
In PPP project, private sector often stands in the first line during the construction and operation of the project; the final objective of the private sector is to gain the return of the project investment. Then, from the IOOI aspect, the private sector mainly focuses on the support from the government during input stage, including approving time, avoiding unreasonable intervention from the government, and gaining the government policy support (such as exclusive commitment and so on). In the output stage, the private sector mainly focuses on project construction, including safe construction and operation, quality, and duration. The private sector pays more attention on project profit during outcome stage, including avoiding project overspend, low financial cost, reasonable pricing system, concession operation period, and users. In impact aspect, the private sector takes main concern on public relationship, including setting up long-term cooperation with the government and increasing corporate visibility.
The public is not only the main participant but also the main user of the PPP project. Most scholars consider that the concerns for PPP project of public contain operational reliability, including quality, environment, operational function, and so on. Besides, Liu presents that the public will be dissatisfied with the project due to the using price perception of the public for PPP project, especially the unreasonable project subsidy, low government subsidy, and high charge price and other problems which will damage the benefit for the public.
According to the analysis of the factors affecting the cooperation efficiency in PPP projects from the perspective of government sector, private sector, and public, the evaluation index is set up as follows (Table
PPP project cooperation efficiency index system.
Categories | Factors | Indexes | Definitions | Resources |
---|---|---|---|---|
Government | Satisfy Public Requirement | X1 Reliable quality | High quality of public product/service | Clarkson [ |
X2 Satisfied public product/service requirement | The new-built, renovated, and expanded public facilities need to satisfy the requirement of economic and social development | Bryson [ | ||
X3 Safety construction and operation | Avoid safety accident during the construction and operation process of the project | Li et al. [ | ||
X4 Reasonable pricing system | Define the price standards and adjust procedure based on the project investment and operational cost, and then control the services change of the franchise company | Zhan et al. [ | ||
Avoid Renegotiation | X5 Avoid concession period extension | Avoid the renegotiation to extent concession period | Tiong [ | |
X6 Avoid increasing financial responsibility during concession period | Avoid the renegotiation to increase the financial expenditure | Tiong [ | ||
X7Avoid price increase during concession period | Avoid private sector increasing the price through renegotiation and then increasing the burden of the users | Yang and Zou [ | ||
Promote Urban Development | X8 Environmentally sustainable development | Sustainable utilization of resource and energy, sustainable maintenance of the ecosystem | Yang and Zou [ | |
X9 Promote regional economic development | Create job opportunities, increase local regional investment capacity, accelerate local economic development, guiding and radiation effects for the regional economic increase | Villalba-Romero and Liyanage [ | ||
X10 Improve the construction and operation efficiency of the public project | Introduce the advanced technology and management capacity of private sector, provide high quality public product/services with low cost | Li et al. [ | ||
Successfully Develop Works | X11 Complete the project in time | Complete the construction of PPP project in time | Ng and Loosemor [ | |
X12 Transfer part of risks | Transfer part of the risks to private sector | Rugters and Haley [ | ||
X13 Good condition of facilities after transfer | PPP project maintains good facility conditions after transfer | EI-Gohary et al. [ | ||
Reduce Financial Pressure | X14 Avoid high supervise cost | Due to the involvement of private capital, private sector owns some control for the project; it is difficult for government to supervise and the supervise cost will also increase | Liu et al. [ | |
X15 Reduce financial pressure | Reduce the financial pressure of the government to provide public product/service | Yuan et al. [ | ||
Private Sector | Project Profit | Y1 Low Cost | Reduce project cost | Xiong et al. [ |
Y2 Satisfy return on investment | The operation of the project can meet the requirement of return on investment | Li et al. [ | ||
Y3 Reasonable pricing principle | Stable income in long term and avoid the reduction of charge price | Yuan et al. [ | ||
Y4 Reasonable concession period | Reasonable concession period can guarantee the return of the project | EI-Gohary et al. [ | ||
Y5 Many users | The project can attract many users | Grimsey and Lewis [ | ||
Government Support | Y6 Avoid project overspend | Avoid the project investment exceeding the planned investment | Xiong et al. [ | |
Y7 Avoid unreasonable intervention from the government | Avoid the illegal property requirement from the government through illegal influence, and result in costing increase in maintaining relationship. | Ismail [ | ||
Y8 Gain the policy support from the government sector | Own the guaranteed benefits, tax incentives, bundled development, logistics, and so on | Warsen et al. [ | ||
Project Construction | Y9 Safe construction and operation | Avoid safety accident during the construction and operation process of the project | Li et al. [ | |
Y10 Standard quality | The quality of public product/service meets the expected standard | Lebas [ | ||
Y11 Complete the project in time | Complete the construction of PPP project in time | Tiong [ | ||
Public Relationship | Y12 Establish long-term cooperation relationship with the government | Establish good long-term cooperation relationship, increase mutual trust and the future cooperation opportunities, and also make the cooperation more successful. | Tiong [ | |
Y13 Improve the reputation and credibility of enterprise | Establish good social image, raise reputation, and achieve social responsibility of enterprise | Xiong et al. [ | ||
Public | Operational Reliability | Z1 Reliable construction quality | High level of public product/service quality | Villalba-Romero and Liyanage [ |
Z2 Good environment | Good and comfortable environment for public products | EI-Gohary et al. [ | ||
Z3 Good operational function | Strong operational functions of public product, which can meet the client’s requirements | Yuan et al. [ | ||
Z4 Timely convenient service | Service in time, improve the convenience of the users | Mladenovic et al. [ | ||
Z5 Safety operation | Safe services, low occurrence of malfunction | Mladenovic et al. [ | ||
Operational Price | Z6 Low price | Low operational price | EI-Gohary et al. [ | |
Z7 User subsidy from the government | Avoid the decrease of the user subsidy standard from the government to private sector and resulting in the decrease of the public product or service quality provided from private sector | Maskin and Tirole [ | ||
Z8 Reasonable compensation | Fair and reasonable compensation for public during the process of land requisition and demolishment | Liu et al. [ |
The comprehensive evaluation of PPP project is a multilevel, multi-index, and multiattribute complex issue; its difficulty is that there are many indexes; it is also required to consider the fuzzy attributes of some indexes during the evaluation process. Therefore, it can be considered as a multiprinciple fuzzy evaluation issue. Many researchers began to use stochastic and fuzziness to describe the uncertainties. However, the probability distribution in stochastic optimization is usually hard to understand. The grey system theory is focused on the study of problems involving small samples and poor information, which provided an alternative method to deal with these problems. It processes uncertain systems with partially known information by generating, mining, and extracting useful information from the available information. So, the operating behavior of the system and its evolution can be correctly described and effectively monitored. Therefore, gray clustering evaluation is an effect way to describe the uncertainties. Comparing with fuzzy comprehensive evaluation method and weighted average method, gray clustering evaluation can fully utilize the known whitening information, research the relationship between the system internal action data, dilute the grayness of the system, and improve the accuracy of the evaluation.
The Grey System Theory is purposed by Julong Deng in 1982 [
Grey cluster approach can be separate as grey relational cluster and grey whitening weight function cluster [
When applying the grey cluster method based on grey whitening weight function to conduct the evaluation of PPP project cooperation efficiency, firstly, determine the evaluation of cooperation efficiency and use the questionnaire survey method to score each index; establish the corresponding whitening weight function according to cooperation efficiency evaluation index system, and calculate whitening weight function according the index score; then, according to this information, AHP is used to determine the attribute weights. Finally, calculate the comprehensive clustering coefficient of cooperation efficiency and define the cooperation efficiency level of PPP project.
Suppose there are
Divide the indexes into
Connect the point
Centre point triangular whitening weight function.
Obtain the whitening weight function, presented in formula (
Apply
When
The total length of Beijing Metro Line 4 is 28.65 kilometers; the south of this metro line is from Beijing Gongyixiqiao Station in Fengtai District and north to the Anheqiao North station in Haidian District. There are 24 stations in total across this metro line. The total investment of this project is about 15.3 billion Yuan. The construction of this project started from the end of 2003, and this project was completed and put into operation in 2009. At present, the average daily passenger flow has reached 700,000.
This project has been separated into two independent parts: A and B. Part A contains tunnels, stations, and some other civil works. The investment of part A is about 10.7 billion Yuan, which occupies the 70% of the total project investment. The wholly owned subsidiary of Beijing Infrastructure Investment Company (government state-owned company) is responsible for the construction and investment of the part A. Part B includes vehicles and signals and other equipment assets. The investment amount of Part B is 4.6 billion Yuan, accounting for 30% of the project total investment. The PPP project company (franchise company), which is established through market-based methods, takes the responsibility of the investment, construction, operation, management, and conducting franchise. The PPP model of Beijing Metro Line 4 is presented in Figure
PPP model operation of Beijing Metro Line 4.
The samples for this investigation are the staff of franchise company who take part in the implementation of Beijing Metro Line 4 PPP project, government staff, and the public. Out of 140 questionnaires sent out, 120 are received. After checking, inspecting, and eliminating the invalid data, 101 valid questionnaires remain with 72% valid response rate. The statistics criteria are presented in Tables
Distribution of questionnaire.
Stakeholders category | Number | Percentage |
---|---|---|
Public sector | 21 | 20.5% |
Private sector | 48 | 47.7% |
Public | 32 | 31.8% |
Total | 101 | 100% |
Percentage distribution of the respondents’ profile.
Index | Range | Public sector | Private sector | Public |
---|---|---|---|---|
Age | 18-30 | 2 | 11 | 9 |
31-50 | 14 | 30 | 16 | |
50+ | 5 | 7 | 7 | |
Education level | High school graduation | - | - | 9 |
Post high school | 21 | 48 | 23 | |
Years of PPP project experience | <3 years | 2 | 7 | - |
3~5 years | 5 | 23 | - | |
6~10 years | 11 | 14 | - | |
>10 years | 2 | 5 | - |
Determine the evaluation language description set U for each qualitative index of Beijing Metro Line 4 PPP project cooperation efficiency evaluation model as U=(extremely low, very low, low, relevantly low, moderately low, moderately high, relevantly high, high, very high, extremely high)=(1,2,3,4,5,6,7,8,9,10). When combining the grey clustering evaluation, these indexes will be considered as clustering object. The relative change threshold is used as the corresponding value after the dimensionlessness of the index. This value not only emphasizes the direct comparison between the actual data and the planned data, but also measures the rate of change and converts the relative threshold to a positive value according to the change of the data. The processing method is as follows.
For benefit index,
For cost index,
The index level is divided into 5 evaluation grey classes which present the cooperation efficiency level as very low, low, moderate, high, and very high separately. According to the lowest and highest evaluation score for the evaluation language set, considering the divide requirement of grey classes, the very low, low, moderate, high, and very high points in set
Divide qualitative index level.
Grey class | I | II | III | IV | V |
---|---|---|---|---|---|
Cooperation efficiency level | Very low | Low | Moderate | High | Very high |
Score | | | | | |
The whitening weight function value of
Take the corresponding value of each index into the above formula, and then calculate the corresponding grey whitening weight function value for each index. Finally, the whitening weight function value is managed as Table
Comprehensive clustering coefficient for Beijing metro line 4 PPP project cooperation efficiency index.
Cooperation efficiency index | Comprehensive weight | | | | | | |
---|---|---|---|---|---|---|---|
X1 Reliable quality | | 0.0061 | 0 | 0 | 0 | 0.9 | 0.1 |
X2 Satisfied public product/service requirement | | 0.0257 | 0 | 0 | 0 | 0.3 | 0.7 |
X3 Safety construction and operation | | 0.0068 | 0 | 0 | 0 | 0.95 | 0.05 |
X4 Reasonable pricing system | | 0.0078 | 0 | 0 | 0.4 | 0.6 | 0 |
X5 Avoid concession period extension | | 0.0091 | 0 | 0 | 0 | 0.55 | 0.45 |
X6 Avoid increasing financial responsibility during concession period | | 0.0099 | 0 | 0 | 0.15 | 0.85 | 0 |
X7Avoid price increase during concession period | | 0.0125 | 0 | 0 | 0 | 0 | 0.95 |
X8 Environmentally sustainable development | | 0.0170 | 0 | 0 | 0.1 | 0.9 | 0 |
X9 Promote regional economic development | | 0.0151 | 0 | 0 | 0 | 0.95 | 0.05 |
X10 Improve the construction and operation efficiency of the public project | | 0.0204 | 0 | 0 | 0 | 0.65 | 0.35 |
X11 Complete the project in time | | 0.0039 | 0 | 0 | 0 | 0 | 0.9 |
X12 Transfer part of risks | | 0.0057 | 0 | 0 | 0 | 0.75 | 0.25 |
X13 Good condition of facilities after transfer | | 0.0033 | 0 | 0 | 0 | 0.95 | 0.05 |
X14 Avoid high supervise cost | | 0.0162 | 0 | 0 | 0.75 | 0.25 | 0 |
X15 Reduce financial pressure | | 0.0403 | 0 | 0 | 0.39 | 0.39 | 0.61 |
Y1 Low Cost | | 0.0299 | 0 | 0.2 | 0.8 | 0 | 0 |
Y2 Satisfy return on investment | | 0.0215 | 0 | 0 | 0.5 | 0.5 | 0 |
Y3 Reasonable pricing principle | | 0.0189 | 0 | 0 | 0 | 0.9 | 0.1 |
Y4 Reasonable concession period | | 0.0083 | 0 | 0 | 0 | 0.45 | 0.55 |
Y5 Many users | | 0.0357 | 0 | 0 | 0 | 0.35 | 0.65 |
Y6 Avoid project overspend | | 0.0278 | 0.89 | 0.11 | 0.11 | 0 | 0 |
Y7 Avoid unreasonable intervention from the government | | 0.0099 | 0 | 0 | 0 | 0.6 | 0.4 |
Y8 Gain the policy support from the government sector | | 0.0672 | 0 | 0 | 0 | 0.75 | 0.25 |
Y9 Safe construction and operation | | 0.1662 | 0 | 0 | 0 | 0.35 | 0.65 |
Y10 Standard quality | | 0.0145 | 0 | 0 | 0 | 0.6 | 0.4 |
Y11 Complete the project in time | | 0.0165 | 0 | 0 | 0 | 0.3 | 0.7 |
Y12 Establish long-term cooperation relationship with the government | | 0.0145 | 0 | 0 | 0 | 0 | 0.75 |
Y13 Improve the reputation and credibility of enterprise | | 0.0118 | 0 | 0 | 0 | 0.45 | 0.55 |
Z1 Reliable construction quality | | 0.0073 | 0 | 0 | 0 | 0.9 | 0.1 |
Z2 Good environment | | 0.1956 | 0 | 0 | 0.05 | 0.95 | 0 |
Z3 Good operational function | | 0.0427 | 0 | 0 | 0.45 | 0.55 | 0 |
Z4 Timely convenient service | | 0.0354 | 0 | 0 | 0 | 0.2 | 0.8 |
Z5 Safety operation | | 0.0271 | 0 | 0 | 0.04 | 0.04 | 0.96 |
Z6 Low price | | 0.0206 | 0 | 0 | 0 | 0 | 0.5 |
Z7 User subsidy from the government | | 0.0171 | 0 | 0 | 0 | 0.95 | 0.05 |
Z8 Reasonable compensation | | 0.0114 | 0 | 0 | 0 | 0.6 | 0.4 |
| |||||||
| 0.0248 | 0.0090 | 0.1020 | 0.5326 | 0.3365 |
Based on the expert survey to weight of public sector, private sector, and public through AHP approach, comprehensive weight of each index can be obtained. According to the formula
According to
From Table
As a result, combined with the actual situation and operability, the directions for this project to improve cooperation efficiency in future operation process are as follows.
The PPP model is widely used worldwide now and has played an integral role in China’s infrastructure sector. However, at the same time of development, many PPP projects failed to achieve the expected results, and the construction and operation results of the PPP projects were totally different; a large number of projects were even in a state of loss, leading to the cooperation degree not meeting the expected objective. This paper evaluates the PPP projects through establishing cooperation efficiency evaluation model. Based on the recognizing the key factors for impacting the cooperation level of stakeholders and resulting in low benefits for PPP projects; this paper conducts the grey clustering model to research the cooperation efficiency of PPP project. The results show that the total cooperation efficiency of Beijing Metro Line 4 PPP project is high. But the objects for reducing the government supervise cost, alleviating government financial pressure, and satisfying the return on investment for private sector have not been achieve comprehensively. It is necessary to reduce the government supervision cost in the following operation process of the project and explore the new type of ‘subsidy model’ actively and then maximize the cooperation efficiency among all stakeholders and achieve the success following execution of the PPP project.
The numerical application data used to support the findings of this study are included within the article.
The authors declare that they have no competing interests.
The authors wish to thank the National Natural Science Foundation of China (51608363, 71271143), the High Research and High Visit Foundation for Young and Middle-Aged Teachers of Tianjin Normal University.