When Does a Public-Private Partnership (PPP) Lead to Inefficient Cost Management?
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Author | : Sounman Hong |
Publisher | : |
Total Pages | : 26 |
Release | : 2015 |
ISBN-10 | : OCLC:1306953315 |
ISBN-13 | : |
Rating | : 4/5 (15 Downloads) |
Book Synopsis When Does a Public-Private Partnership (PPP) Lead to Inefficient Cost Management? by : Sounman Hong
Book excerpt: We examine whether a public-private partnership (PPP) improved the operational cost efficiency of Korea's urban rail system. Results suggest that private participation did not reduce service operation costs. We explain how the absent cost advantage may be connected to the two characteristics defining a typical PPP: activity bundling and public-private risk sharing. We argue that if negative externalities exist between the project company and shareholders, public-private risk sharing may weaken the concessionaire's cost management incentives.