Legal risk impact in Public Private Partnerships (PPPs): the case of the Chinese water sector

China is currently experiencing a rising demand for water, combined with limited funding availability for water project procurement. Consequently, local Chinese governments have sought procurement solutions by experimenting with public private partnerships (PPPs). However, the legal risk in PPPs, particularly in the water sector, remains high. Legal risk refers to risk arising from the legal and regulatory systems surrounding PPPs. Past research have identified legal risk in PPP projects in China as critical, however the stages at which they are significant have not been studied. This paper examines the legal risk associated with PPPs in the water sector in China and measures the degree of risk across three key stages; 1) Procurement, 2) Construction and 3) Operation. The interrelationship between legal risk at these three stages is also investigated. The significance of the risk was measured by determining the probability and severity of the risk. Correlation analysis was used to investigate the relationship between legal risks across the three stages. Our findings are that legal risk is present at all three stages, at close to moderate levels, with risk significance greatest at the operational stage. Moreover, while no correlation was identified for legal risk at the operational stage with those of earlier stages, it was found that legal issues arising during the procurement stage significantly exacerbated any further legal issues that emerged during the construction stage of water projects. The findings from this study will be significant in providing practitioners with the information to manage this risk at different stages of PPP projects.

Managing intragroup conflicts in construction project teams : case studies in Sri Lanka

Conflict is intrinsic to individuals, teams and organisations. Due to the unique and complex nature with various parties, conflict is inevitable in most construction projects. According to the general management literature, three distinct types of intragroup conflicts can be identified: task, process and relationship conflicts. However, very little consideration has been given in the literature addressing the three types individually in a construction project team setting. Therefore, this study has explored the existence of types of intragroup conflicts and their management in this context. This research was approached through case studies of six construction projects, which were operating under the traditional procurement method in Sri Lanka. Semi-structured interviews were conducted with three distinct participants from each team. The findings revealed that both process and relationship conflicts offer disruptive effects to construction projects and teams, while task conflicts offer positive effects when they exist at low levels. Based on the most critical sources identified within the cases, suggestions are offered here to construction project team managers on how to manage intergroup conflicts proactively. Since the research is based on six case studies on traditional procurement arrangement in Sri Lanka, further research is required to generalise the findings across different contexts.

Terms of trade shocks and monetary policy in India

Central banks in emerging market economies often grapple with understanding the monetary policy response to an inter-sectoral terms of trade shock. To address this, we develop a three sector closed economy NK-DSGE model calibrated to India. Our framework can be generalized to other emerging markets and developing economies. The model is characterized by a manufacturing sector and an agricultural sector. The agricultural sector is disaggregated into a grain and vegetable sector. The government procures grain from the grain market and stores it. We show that the procurement of grain leads to higher inflation, a change in the sectoral terms of trade, and a positive output gap because of a change in the sectoral allocation of labor. We compare the transmission of a single period positive procurement shock with a single period negative productivity shock and discuss the implications of such shocks for monetary policy setting. Our paper contributes to a growing literature on monetary policy in India and other emerging market economies.