Critical risk factors affecting the implementation of PPP waste-to-energy projects in China

Since 2003, Mainland China has been promoting the public–private partnership (PPP) procurement model in the waste-to-energy incineration sector to reduce the waste burying rate and improve environmental quality. Five critical risk factors (CRFs) that affect the construction and operation of waste-to-energy incineration projects have been identified from real-life risk events of 14 PPP waste-to-energy incineration plants through content analysis. These risk factors are insufficient waste supply, disposal of non-licensed waste, environmental risk, payment risk, and lack of supporting infrastructure. A recently completed PPP waste-to-energy incineration plant, the Shanghai Tianma project, was investigated to learn from the effective management of CRFs. First-hand data about the Shanghai Tianma project was collected, with a focus on project negotiation and concession agreement. Lessons learned about risk management were acquired. This paper presents a detailed study of the contractual structure, risk sharing scheme, risk response measures to CRFs, and project transfer of a PPP project. The study results will provide governments with management implications to prepare equitable concession agreements and benefit private investors by effectively mitigating and managing risks in future PPP waste-to-energy incineration projects.

Transaction Cost Analysis of PPP Risk Share

PPP (Public Private Partnerships) is a new operation mode of infrastructure projects, which usually undergo long periods and have various kinds of risks in technology, market, politics, policy, finance, society, natural conditions and cooperation. So the government and the private agency should establish the risk-sharing mechanism to ensure the successful implementation of the project. As an important branch of the new institutional economics, transaction cost economics and its analysis method have been proved to be beneficial to the proper allocation of risks between the two parts in PPP projects and the improvement of operation efficiency of PPP risk-sharing mechanism. This paper analyzed the transaction cost of the projects risk-sharing method and the both risk carriers. It pointed out that the risk-sharing method of PPP projects not only reflected the spirit of cooperation between public sector and private agency, but also minimized the total transaction cost of the risk sharing mechanism itself. Meanwhile, the risk takers had to strike a balance between the beforehand cost and the afterwards cost so as to control the cost of risk management. The paper finally suggested three ways which might be useful to reduce the transaction cost: to choose appropriate type of contract of PPP risk-sharing mechanism, to prevent information asymmetry and to establish mutual trust between the two participants.

Achieving a responsive industrial relations environment for construction industry workers – a project alliancing case study

This paper outlines how the project agreement operating on the Australian National Museum project in Canberra, Australia facilitated a responsible and responsive workplace environment for construction workers. A project alliancing approach was adopted and designed to encourage industrial relations innovation in the workplace. The trigger for this approach was the perceived success of the alliancing working arrangements between key project delivery teams and a desire to extend this arrangement to subcontractors, suppliers and the workforce. Changes in the Australian workplace relations environment and introduction of a national code of practice for the Australian construction industry provided impetus for reaching a new type of workplace agreement. The workplace culture and characteristics of relationships formed between workers and management on that site shaped the agreed terms and conditions of work. It also spurred the pursuit of innovative approaches to project delivery from a technology, management and workplace culture perspective.

Sydney Opera House : facilities management exemplar project

The paper presents an interim summary of research and case studies being undertaken in the Sydney Opera House FM Exemplar Project covering procurement, benchmarking and building information models. The final outcomes of the FM Exemplar Project will be presented through various forums open to all FM practitioners and published in Australia and elsewhere through relevant journals. Sydney Opera House is an Australian icon, attracting some 4.5 million visitors per year who admire its built form and enjoy an evening of theatre. The building is the attraction, part of the experience. Therefore, facilities management is critical to the success of the Sydney Opera House enterprise and an ideal subject for the study of facilities management. Significantly the three research themes are heavily intertwined – effective risk sharing in procurement requires historic information and benchmarks for future performance, benchmarking gathers vast quantities of data that can only be exploited if properly related to one another and a building information model provides the means to manage such data. The case studies are emerging as real-life examples of how one organisation is addressing FM issues common to many, and will provide useful lessons for practitioners pursing similar strategies in their own organisations.

Developing a best practice framework for implementing public private partnerships (PPP) in Hong Kong

Public Private Partnership (PPP) is a well established methodology for procuring public works projects. By incorporating the private sector’s expertise, efficiency, innovation, business sense, risk sharing, financing etc. into public works projects, the quality of public services and facilities can be uplifted. Like many jurisdictions, Hong Kong is also keen to take aboard this methodology which is so familiar but yet so distant. Although they have been one of the first jurisdictions to utilise the private sector in public works projects, their comfortable financial reserves has meant that there has been no urge to push the movement until recently. PPP has become increasingly popular amongst governments. The Hong Kong Special Administrative Region (HKSAR) government is no exception. Some of the more active works departments have commissioned studies to investigate the best ways to deliver these projects, others have even trialed the method themselves. The efficiency Unit of the HKSAR government has also become an active arm in conducting research in this area. Although so, the information that is currently available is still very broad. Building from their works there is a need to develop a best practice framework for implementing PPP projects in Hong Kong by incorporating international experiences. To develop a best practice framework will require thorough investigation into the benefits, difficulties and critical success factor of PPP. PPP should also be compared with other procurement methods. In order to do so it is important to clearly understand the local situation by an analysis of projects conducted to date. Lessons learnt can further be derived from other countries and incorporated to those derived locally. Finally the best conditions in terms of project nature, complexity, types, and scales for adopting PPP should be derived. The aim and objectives of this study were achieved via a comprehensive literature review, in-depth case analyses, interview survey with experts from both Hong Kong and overseas, and finally a large scale data collection was conducted via a questionnaire survey with PPP practitioners. These findings were further triangulated before they were used as the basis to form the best practice framework presented in this thesis. The framework was then further validated by PPP experts to ensure it is comprehensive, objective, reliable and practical. This study has presented a methodology that can be adopted for future studies. It has also updated our knowledge on the development trends of PPP as well as opened up the experiences of other jurisdictions. The findings have shown that the local industry is familiar with “what” should be done in PPP projects but they are unsure of “how” these goals can be achieved. This framework has allowed this further knowledge to be delivered to PPP practitioners. As a result, the development of this framework can help to resolve the current economic crisis by encouraging more developments and business opportunities for the private sector. In addition, the correct projects can be delivered by PPP, the advantages of PPP can be maximised, and the general public can benefit from the private sector’s participation.

Factors contributing to successful public private partnership projects : comparing Hong Kong with Australia and the United Kingdom

Purpose: With the increasing interest in Public Private Partnership (PPP) there is a need to investigate the factors contributing to successful delivery of PPP projects. Design/methodology/approach: An empirical questionnaire survey was conducted in Hong Kong and Australia. The survey respondents were asked to rate eighteen factors which contribute to delivering successful PPP projects. Findings: The findings from this survey were further compared with the results achieved by a previous researcher (Li, 2003) in a similar survey conducted in the United Kingdom. The comparison showed that amongst the top five success factors ranked by Hong Kong respondents, three were also ranked highly by the Australians and British. These success factors included: ‘Commitment and responsibility of public and private sectors’; ‘Strong and good private consortium’; and ‘Appropriate risk allocation and risk sharing’. Originality/value: These success factors were therefore found to be important for contributing to successful PPP projects irrespective of geographical locations.

The impact of taxes on optimal portfolio choice : an Australian study

Taxes are an important component of investing that is commonly overlooked in both the literature and in practice. For example, many understand that taxes will reduce an investment’s return, but less understood is the risk-sharing nature of taxes that also reduces the investment’s risk. This thesis examines how taxes affect the optimal asset allocation and asset location decision in an Australian environment. It advances the model of Horan & Al Zaman (2008), improving the method by which the present value of tax liabilities are calculated, by using an after-tax risk-free discount rate, and incorporating any new or reduced tax liabilities generated into its expected risk and return estimates. The asset allocation problem is examined for a range of different scenarios using Australian parameters, including different risk aversion levels, personal marginal tax rates, investment horizons, borrowing premiums, high or low inflation environments, and different starting cost bases. The findings support the Horan & Al Zaman (2008) conclusion that equities should be held in the taxable account. In fact, these findings are strengthened with most of the efficient frontier maximising equity holdings in the taxable account instead of only half. Furthermore, these findings transfer to the Australian case, where it is found that taxed Australian investors should always invest into equities first through the taxable account before investing in super. However, untaxed Australian investors should invest their equity first through superannuation. With borrowings allowed in the taxable account (no borrowing premium), Australian taxed investors should hold 100% of the superannuation account in the risk-free asset, while undertaking leverage in the taxable account to achieve the desired risk-return. Introducing a borrowing premium decreases the likelihood of holding 100% of super in the risk-free asset for taxable investors. The findings also suggest that the higher the marginal tax rate, the higher the borrowing premium in order to overcome this effect. Finally, as the investor’s marginal tax rate increases, the overall allocation to equities should increase due to the increased risk and return sharing caused by taxation, and in order to achieve the same risk/return level as the lower taxation level, the investor must take on more equity exposure. The investment horizon has a minimal impact on the optimal allocation decision in the absence of factors such as mean reversion and human capital.

Analysing governance categories used on project alliances in the construction industry

In Australia, collaborative contracts, and in particular, project alliances, have been increasingly used to govern infrastructure projects. These contracts use formal and informal governance mechanisms to manage the delivery of infrastructure projects. Formal mechanisms such as financial risk sharing are specified in the contract, while informal mechanisms such as integrated teams are not. Given that the literature contains a multiplicity of often untestable definitions, this paper reports on a review of the literature to operationalize the concepts of formal and informal governance. This work is the first phase of a study that will examine the optimal balance of formal and informal governance structures. Desk-top review of leading journals in the areas of construction management and business management, as well as recent government documents and industry guidelines, was undertaken to to conceptualise and operationalize formal and informal governance mechanisms. The study primarily draws on transaction-cost economics (e.g. Williamson 1979; Williamson 1991), relational contract theory (Feinman 2000; Macneil 2000) and social psychology theory (e.g. Gulati 1995). Content analysis of the literature was undertaken to identify key governance mechanisms. Content analysis is a commonly used methodology in the social sciences area. It provides rich data through the systematic and objective review of literature (Krippendorff 2004). NVivo 9, a qualitative data analysis software package, was used to assist in this process. A previous study by the authors identified that formal governance mechanisms can be classified into seven measurable categories: (1) negotiated cost, (2) competitive cost, (3) commercial framework, (4) risk and reward sharing, (5) qualitative performance, (6) collaborative multi-party agreement, and (7) early contractor involvement. Similarly, informal governance mechanisms can be classified into four measureable categories: (1) leadership structure, (2) integrated team, (3) team workshops, and (4) joint management system. This paper explores and further defines the key operational characteristics of each mechanism category, highlighting its impact on value for money in alliance project delivery. The paper’s contribution is that it provides the basis for future research to compare the impact of a range of individual mechanisms within each category, as a means of improving the performance of construction projects.

Understanding Formal and Informal Governance on Infrastructure Projects - Literature Review [industry report]

In Australia, collaborative contracts have been increasingly used to govern infrastructure projects. These contracts combine formal and informal mechanisms to manage project delivery. Formal mechanisms (e.g. financial risk sharing) are specified in the contract, while informal mechanisms (e.g. integrated team) are not. The paper reports on a literature review to operationalise the concepts of formal and informal governance, as the literature contains a multiplicity of, often un-testable, definitions. This work is the first phase of a study that will examine the optimal balance of formal and informal governance structures. Desk-top review of leading journals in the areas of construction management and business management, as well as recent government documents and industry guidelines, was undertaken to to conceptualise and operatinalise formal and informal governance mechanisms. The study primarily draws on transaction-cost economics (e.g. Williamson 1979; 1991), relational contract theory (Feinman 2000; Macneil 2000) and social psychology theory (e.g. Gulati 1995). Content analysis of the literature was undertaken to identify key governance mechanisms. Content analysis is a commonly used methodology in the social sciences area. It provides rich data through the systematic and objective review of literature (Krippendorff 2004). NVivo 9, a qualitative data analysis software package, was used to assist in this process. Formal governance mechanisms were found to be usefully broken down into four measurable categories: (1) target cost arrangement (2) financial risk and reward sharing regime (3) transparent financials and (4) collaborative multi-party agreement Informal governance mechanisms were found to be usefully broken down into three measurable categories: (1) leadership structure (2) integrated team (3) joint management system We expect these categories to effectively capture the key governance drivers of outcomes on infrastructure projects. These categories will be further refined and broken down into individual governance mechanisms for assessment through a large-scale Australian survey planned for late 2012. These individual mechanisms will feature in the questionnaire that QUT will deliver to AAA in October 2012.

The Sorcerer II expedition: Intellectual property and biodiscovery

This article considers the significance of a leading marine biodiscovery initiative. In March 2004, Dr. J. Craig Venter announced the official launch of the Sorcerer II Expedition, a scientific expedition of discovery, which would survey marine and terrestrial microbial populations. The Expedition has the potential to uncover tens of thousands of new microbial species and tens of millions of new genes. Venter has disavowed that the Sorcerer II Expedition has any commercial ambitions. However, some have viewed the Sorcerer II Expedition with suspicion. Various civil society groups have accused the Expedition of engaging in 'biopiracy'. This article investigates the Convention on Biological Diversity 1992 and other relevant international treaties, various national and regional regimes to govern access to genetic resources, and benefit-sharing agreements. It considers the intersection of intellectual property law, contract law, environmental law, and international law in this field. This article provides a blueprint for a nationally consistent scheme for access to genetic resources, and a model for future international developments.

Models for engaging public-private partnerships in civil infrastructure projects: A case of ‘having your cake and eating it too’?

Public-Private Partnerships (PPP) are established globally as an important mode of procurement and the features of PPP, not least of which the transfer of risk, appeal to governments and particularly in the current economic climate. There are many other advantages of PPP that are claimed as outweighing the costs of PPP and affording Value for Money (VfM) relative to traditionally financed projects or non-PPP. That said, it is the case that we lack comparative whole-life empirical studies of VfM in PPP and non-PPP. Whilst we await this kind of study, the pace and trajectory of PPP seem set to continue and so in the meantime, the virtues of seeking to improve PPP appear incontrovertible. The decision about which projects, or parts of projects, to offer to the market as a PPP and the decision concerning the allocation or sharing risks as part of engagement of the PPP consortium are among the most fundamental decisions that determine whether PPP deliver VfM. The focus in the paper is on latter decision concerning governments’ attitudes towards risk and more specifically, the effect of this decision on the nature of the emergent PPP consortium, or PPP model, including its economic behavior and outcomes. This paper presents an exploration into the extent to which the seemingly incompatible alternatives of risk allocation and risk sharing, represented by the orthodox/conventional PPP model and the heterodox/alliance PPP model respectively, can be reconciled along with suggestions for new research directions to inform this reconciliation. In so doing, an important step is taken towards charting a path by which governments can harness the relative strengths of both kinds of PPP model.

Listening, sharing understanding and facilitating consumer, family and community empowerment through a priority driven partnership in Far North Queensland

Objectives: This paper provides an example of a mental health research partnership underpinned by empowerment principles that seeks to foster strength among community organizations to support better outcomes for consumers, families and communities. It aims to raise awareness among researchers and service providers that empowerment approaches to assist communities to address mental health problems are not too difficult to be practical but require long-term commitment and appropriate support. Methods: A collaborative research strategy that has become known as the Priority Driven Research (PDR) Partnership emerged through literature review,consultations, Family Wellbeing Program delivery with community groups and activities in two discrete Indigenous communities. Progress to date on three of the four components of the strategy is described. Results: The following key needs were identified in a pilot study and are now being addressed in a research-based implementation phase: (i) gaining two-way understanding of perspectives on mental health and promoting universal awareness; (ii) supporting the empowerment of carers, families, consumers and at-risk groups through existing community organizations to gain greater understanding and control of their situation; (iii) developing pathways of care at the primary health centre level to enable support of social and emotional wellbeing as well as more integrated mental health care; (iv) accessing data to enable an ongoing process of analysis/sharing/planning and monitoring to inform future activity. Conclusion: One of the key learnings to emerge in this project so far is that empowerment through partnership becomes possible when there is a concerted effort to strengthen grassroots community organizations. These include social health teams and men’s and women’s groups that can engage local people in an action orientation. Key words: Aboriginal, empowerment, Indigenous, mental health.

Freedom of information implications of information sharing networks for critical infrastructure protection

Protection of “critical infrastructure” has become a major issue for govern- ments worldwide. Yet in Australia, as in many other countries, including the United States, an estimated 90% of critical infrastructure is privately owned or operated commercially – in other words, critical infrastructure protection is not the exclusive domain of government. As a result, information sharing between government and the private sector has become a vitally important component of effective risk management. However, establishing effective arrangements of this kind between the public and private sector needs to take account of existing regimes of access and public disclosure which relate to government-held documents; in particular, that which is established by freedom of information (FOI) legislation. This article examines the extent to which the current Commonwealth FOI regime is likely to act as an impediment to the private sector operators of critical infrastructure participat- ing in government-operated information sharing arrangements. By examining developments in other jurisdictions, principally the United States, the article considers whether amendments to the current Australian FOI regime are necessary to ensure effective participation, consistent with the underlying object and purpose of FOI.

Legal aspects of Web 2.0 activities : management of legal risk associated with use of YouTube, MySpace and Second Life

This Report, prepared for Smart Service Queensland (“SSQ”), addresses legal issues, areas of risk and other factors associated with activities conducted on three popular online platforms—YouTube, MySpace and Second Life (which are referred to throughout this Report as the “Platforms”). The Platforms exemplify online participatory spaces and behaviours, including blogging and networking, multimedia sharing, and immersive virtual environments.

Modelling Spikes in Electricity Prices

uring periods of market stress, electricity prices can rise dramatically. Electricity retailers cannot pass these extreme prices on to customers because of retail price regulation. Improved prediction of these price spikes therefore is important for risk management. This paper builds a time-varying-probability Markov-switching model of Queensland electricity prices, aimed particularly at forecasting price spikes. Variables capturing demand and weather patterns are used to drive the transition probabilities. Unlike traditional Markov-switching models that assume normality of the prices in each state, the model presented here uses a generalised beta distribution to allow for the skewness in the distribution of electricity prices during high-price episodes.