DATA ANALYSIS AND DISCUSSION OF FINDINGS4.1 IntroductionThis chapterpresents analysis of the data and a discussion of the findings from theanalysis. The analysis was conductedusing IBM SPSS Version 21 application software.
4.2 DemographicResponse Table4.2.1 Level of Education Education Level Frequency Percentage (%) Graduate (1st Degree) 39 52% Postgraduate(Masters level) 31 41.3% Professional Qualification 15 20% Total 75 100% Source:Fieldwork – December 2017Asclearly shown in table 4.2.1 above, most of the respondents have universityeducation with 52% having attained minimum of first degree, 41.3% withpostgraduate degree (Masters).
The remaining 20% have professionalqualification. The implication of the findings is that the respondents are welleducated and therefore able to appreciate the issues relevant to their fieldsand provided reliable data.Table4.2.
2 Work Experience Number of years Percentage % 0– 5 years 12% 6 – 10 years 58% 11-15 years 10% Above 16 years 20% Source:Fieldwork – December 2017Asclearly shown in table 4.2.2 above, most of the respondents have more than fiveyears of relevant and progressive work experience in their field of expertise,and this forms about 58% of the total respondents. As much as 12% of the respondents have between0-5 years of work experience, 10% of the total respondents have 11-15 years ofwork experience with as much as 20%, who have worked in their field for morethan 16 years. The implication of the findings is similar to the findings onthe level of education. The respondents are able to provide practical andreliable responses based on their experiences to help the researcher come tothe justifiable conclusion of this study.
4.3 Critical Factors for SuccessfulImplementation of PPP ProjectsItis useful to analyse the relative significance of the CSFs. The researcher hadconducted a questionnaire survey to obtain respondents’ opinions on therelative significance of these factors on a scale of 1–5 (with “1”being “not significant,” “2” being “fairlysignificant,” “3” being “significant,” “4”being “very significant,” and “5” being “extremelysignificant”). The relative significance indexes of the CSFs werecalculated separately.
The following simple formula was used to convertlinearly the 1–5 scale used in the questionnaire survey to a 1–100 scale with 1representing the lowest and 100 the highest significance. This means that”5,” “4,” “3,” “2,” and “1,”have significance indexes of 100, 80, 60, 40 and 20 (1=20, 2=40, 3=60, 4=80, 5=100),respectively. Table4.3.1 Significance index Rank 5 4 3 Government involvement by providing guarantee 68 7 0 98.13 1st Stable macroeconomic condition 68 7 0 98.13 1st Sound economic policy 68 7 0 98.13 1st Shared authority between public and private sectors 65 8 2 96.
80 4th Project technical feasibility 65 8 2 96.80 4th Favorable legal framework 56 18 1 94.67 6th Strong and good private consortium 58 10 7 93.
60 7th Good governance 53 20 2 93.60 7th Transparency of procurement process 70 0 0 93.33 9th Appropriate risk allocation and risk sharing 70 0 0 93.
33 9th Commitment and responsibility of P & P sectors 47 23 5 91.20 11th Competitive procurement process 43 30 2 90.93 11th Multi-benefit objectives 38 20 17 85.60 13th Social support 23 31 21 80.53 14th Source:Fieldwork – December 2017 Fig. 4.1.
1SIGNIFICANCEINDEX CHART Basedon the overall respondent’s results, no scores were recorded for the scalecomponents 1 – “not significant” and 2 – “fairly significant”. These columnsrecorded zero.From the general outcome,overall the top five most critical factors are: (1) Government involvement by providing guarantee,(2) Stable macroeconomiccondition, (3) Sound economic policy, (4) Shared authority between public and private sectorsand (5) Project technicalfeasibility. The two factors that wereranked as least important for project success are Social support and Multi-benefit objectives. Government involvement by providing guaranteewas ranked first as a necessary factor to ensure the success of PPP projects.It is crucial to have government’s involvement byproviding guarantee, as the UnitedNations Economic Commission for Europe has indicated (UNECE, 2007) becauseinefficiency in governance has caused many countries to fail in PPPimplementation. The assertion of Wang et al.
(1999) on the importance ofgovernment support is in the direction of the finding of this study. Thisfinding is further supported by the work of Osei-Kyei & Chan (2016) wherestrong government commitment and support was said to be a CSF in constructionprojects in Ghana. Stable macroeconomiccondition wasperceived by the respondents as a vital CSF. This is consistent with theargument by Chan etal. (2004) and Li et al.(2005) that stable macroeconomiccondition is one of the fundamentalprinciples in partnership. Hence, to secure a successful PPP, all parties needto commit their best resources to the project. Stable macroeconomic conditionhas also been identified as essential in ensuring the attainment of theultimate goals of the PPP projects (Romancik, 2005).
Soundeconomic policy was also ranked among the topmost CSFs for implementing PPPprojects, as perceived by the overall respondents. According to the EuropeanBank for Reconstruction and Development (Farhana, 2010), PPP projects tend towork best when there is a sound economic policy. Furthermore,Farhana (2010) argued that a well-defined sound economicpolicy is necessary for PPP projects to prevent corruption. Therefore,the findings support the assertions made by the aforementioned scholars.
Asshown in Table 4.3.1, ‘Shared authority between public and private sectors’ is thefourth most important success factor for PPP projects. Hardcastle et al. (2006) have indicated that theadoption of shared authority between publicand private sectors might lead to a stable and growing economicenvironment, which allows the private sector to operate with confidence.
Furthermore, a shared authority between publicand private sectors could lead to reasonable certainty of amarket, which, consequently, reduces the risk for the private sector operators(Li et al, 2005). Project technicalfeasibility is the final among the top critical factors which is consistentwith the positions of Qiao et al. (2001). However, contrary to Qiao et al.’s (2001) assertion that a transparentprocurement process is a CSR to a successful PPP implementation, this studyfound this factor to be among the lowest (ranked 9th). 4.4 The Influenceof CSFs on a Successful Delivery of PPP ProjectsThetable below presents a consolidated summary of the responses from therespondents. The significance indexes and rank of the CSFs are based on responses on the influence of criticalfactors on a successful delivery of public-private projects.
Table4.4.1 Significance index Rank Economic viability 5 4 3 2 1 Limited competition from other projects 0 0 0 15 60 96.00 1st Long-term cash flow that is attractive to lenders 0 0 0 20 55 94.67 2nd Long-term demand for the services offered 0 0 8 28 39 88.27 3rd Sufficient profitability of the project 0 5 0 30 40 88.00 4th Sound financial package The project has high equity/debt ratio 0 0 0 17 58 95.47 1st There are low financial charges 0 0 0 48 27 87.
20 2nd The project has a sound financial analysis 5 0 35 35 86.67 3rd There are long-term debt financing that minimizes refinancing risk 10 0 0 55 10 74.67 4th Favourable investment environment Stable political system 0 0 0 14 61 96.27 1st The project is within a ‘predictable and reasonable legal framework 0 0 0 22 53 94.13 2nd The project is in public interest 0 0 0 29 46 92.27 3rd Supportive and understanding community 0 0 0 31 44 91.
73 4th The project has good Government support 0 0 0 33 42 91.20 5th Source:Fieldwork – December 2017 4.4.2 Economic viability -AnalysisEconomicviability is critical to the success of any kind of project. The findings ofthis study show that for a successful PPP infrastructure project, a number offactors are crucial: (1st) limited competition from other projects,(2nd) long-term cash flow that is attractive to the lender, (3rd)long-term demand for the products/services offered by the project and (4th)sufficient profitability of the project to attract investors, which isconsistent with the work of Akintoye, Beck & Hardcastle, (2003) whoidentified limited competition from other projects and long-term cash flow as factors influencingPPP infrastructure projects. 4.
4.3Sound Financial Package – AnalysisThedata presented in table 4.4.1 above shows that the respondents ranked theproject having a high equity/debt ratio 1st, followed by lowfinancial charges 2nd, sound financial analysis ranked 3rdand finally, long-term debt financing that minimizes refinancing risk 4th.This findings support the views of Farhana (2010) that any PPP project shouldhave a sound financial package that encompasses soundfinancial analysis, high equity–debt ratio, low financial charges and long-termdebt financing that minimizes refinancing risk among others.Merna and Dubey (1998)argue that the financial package usually has a greater impact on a PPPproject’s viability than the physical design or construction costs.4.
4.4Favourable Investment Environment – AnalysisA good business environment is necessary toattract investment. The environment is the general framework that enablesbusiness entities to undertake business and seek profit (Thompsen, 2005) andinclude political stability, rule of law, regulatory environment (OSCE Guide,2006). From the data collected and analysed in the third section of table 4.4.1,for PPP schemes to be successful, there should be stable political system (1st),the project should be within a predictable and reasonable legal framework (2nd),the project must be in the public interest (3rd), there should bethe presence of supportive and understanding community (4th) and finally, theproject must have a good government support (5th). The results ofthe study support the World Bank’s (2006) and OSCE’s Guide (2006) that PPPschemes succeed under favourable political, legal, economic and commercialconditions.
The outcome of the study is further buttressed by the positions ofCuttaree (2008) and Babatunde, Opawole & Akinsiku (2012) that sound legaland regulatory framework is a catalyst for infrastructure PPP success.Althoughan efficient and effective legal and regulatory regime when established couldencourage more private investors to partner with the public sector, Walker &Smith (1995) argue that over-regulation would burden and frustrate PPPs and thereforemust be avoided. 4.5 Factors that Hamper the SuccessfulImplementation of PPP Projects 4.
5.1 Inadequate formulation of regulatory policy Table 4.5.1 Inadequate formulation of regulatory policy Frequency Percent Valid Strongly Agree 43 57.3 Agree 29 38.7 Disagree 3 4.0 Total 75 100.0 Source:Fieldwork – December 2017Resultsin table 4.
5.1 above show that 57.3% of the respondents strongly agreed that inadequate formulation ofregulatory policy to guide the procedures and practices of PPP hampersits success. This is supported by 38.7% of the remaining respondents who agreedto this assertion with only 4% who disagreed. 4.5.
2 . Lack of technical andmanagerial expertiseTable 4.5.2 Lack of technical and managerial expertise Frequency Percent Valid Strongly Agree 62 82.7 Agree 13 17.3 Total 75 100.0 Source:Fieldwork – December 2017Theresearcher further wanted to find out from the respondents what their views arewith regards to the lack oftechnical and managerial expertise and how that may affect the success of PPPs.
The data presented above shows that 82.7% of the respondents strongly agreedthat inadequate technical and managerial expertise could severely hamper thesuccess of PPPs. This assertion issupported by the remaining 17.3% who also agreed to this assertion.
This isconsistent with Duffield’s (2001) assertion that the availability of competentpersonnel to participate in PPP project implementation is crucial.4.5.
3 Non-enforcement and monitoring of law toensure complianceTable 4.5.3 Non-enforcementand monitoring of law to ensure compliance Frequency Percent Valid Strongly Agree 31 41.3 Agree 22 29.3 Neutral 15 20.0 Disagree 7 9.3 Total 75 100.
0 Source:Fieldwork – December 2017Thedata presented in table 4.5.3 above shows the respondents’ responses when theresearcher sought to find out from them if non-enforcement and monitoring of law to ensure compliance in away affects the success of PPPs. The data analysis shows that 31 of therespondents representing 41.
3% strongly agreed, 22 respondents representing29.3% also agreed followed by 20% remaining uncertain with their response andonly 9.3% disagreed. This finding support Tiong’s (1996) assertion offavourable legal framework being critical for successful PPP implementation.4.5.4 Difficulties insecuring credit from financial institutions Table 4.
5.4 Difficulties in securing credit from financial institutions Frequency Percent Valid Strongly Agree 51 68.0 Agree 24 32.
0 Total 75 100.0 Source:Fieldwork – December 2017The researcher further sought to ascertain theextent to which participants think difficulties in securing credit from financial institutions canhamper the PPP’s success. Table 4.
5.4 above shows a clear presentation of theparticipants’ responses. All the respondents agreed that inability to securesufficient funds could halt and impede the success of any PPP project. Thetable shows 68% who strongly agree and 32% who also agreed with the assertion.4.5.5 Lack of integrityand moral values Table 4.5.
5 Lack of integrity and moral values Frequency Percent Valid Strongly Agree 30 40.0 Agree 45 60.0 Total 75 100.
0 Source:Fieldwork – December 2017Fromthe analysis above (table 4.5.5), 30 of the respondents constituting 40%strongly agreed that lackof integrity and moral values among the PPP stakeholders could hamper itssuccess. This assertion was supported by the remaining 45 (60%) data collectionparticipants who also agreed. 4.5.6 Improper utilization of resources needed forthe execution of the project Table 4.
5.6 Improper utilization of resources needed for the execution of the project Frequency Percent Valid Strongly Agree 64 85.3 Agree 11 14.7 Total 75 100.0 Source:Fieldwork – December 2017Theresearcher wanted to find out from the respondents how improper utilization of resources needed for theexecution of the project affects the success of PPPs. The data presented intable 4.
5.6 above shows that a majority of 85% strongly agreed and 14.7% also agreed.
4.5.7 Inadequate allocation of risks affects valuefor money Table 4.5.7 Inadequate allocation of risks affects value for money Frequency Percent Valid Strongly Agree 48 64.0 Agree 27 36.0 Total 75 100.0 Source:Fieldwork – December 2017Theresults presented in Table 4.
5.7 above shows the response gathered when therespondents were asked to indicate their response on how inadequate allocation of risksaffects value for money which potentially hamper the success of PPPs. Theresults above indicate that all the respondents gave a positive response tothis question as 64% strongly agreed and the remaining 36% also agreed.4.5.8 Unstablegovernment Table 4.
5.8 Unstable government Frequency Percent Valid Strongly Agree 65 86.7 Agree 10 13.3 Total 75 100.0 Source:Fieldwork – December 2017Fromthe analysis above in table 4.
5.8, 86.7% of the respondents strongly agreed thatan unstable government canhalt the partnership usually as they are a key stakeholder in the partnership.
This is supported by 13.3% who also agreed. From the analysis carried out, it was found that a number offactors contribute to the challenges encountered by PPP projects.
Among these factors are the inadequate formulation of regulatory policy, lackof technical and managerial expertise, non-enforcement and monitoring of law toensure compliance, difficulties in securing credit from financial institutionsand improper utilization of resources needed for the execution of the project. Theselimitations have adverse effect on the development and execution of PPP projects.The keys to effectively managing PPP projects in any society include strong andsound legal and regulatory framework and appropriate allocation of risks andresponsibilities. Cuttaree (2008); Zhang (2005) and Babatunde, Opawole (2012) all allude to the fact that sound legal and regulatoryframework and appropriate allocation of risks and responsibilities are the mostcritical factors for successful implementation of PPP projects.