The Diffusion of Risks in Public Private Partnership Contracts

Purpose The UK government argues that the benefits of public private partnership (PPP) in delivering public infrastructure stem from: transferring risks to the private sector within a structure in which financiers put their own capital at risk; and, the performance based payment mechanism, reinforced by the due diligence requirements imposed by the lenders financing the projects (HM Treasury, 2010). Prior studies of risk in PPPs have investigated ‘what’ risks are allocated and to ‘whom’, that is to the public or the private sector. The purpose of this study is to examine ‘how’ and ‘why’ PPP risks are diffused by their financiers. Design/methodology/approach This study focuses on the financial structure of PPPs and on their financiers. Empirical evidence comes from interviews conducted with equity and debt financiers. Findings The findings show that the financial structure of the deals generates risk aversion in both debt and equity financiers and that the need to attract affordable finance leads to risk diffusion through a network of companies using various means that include contractual mitigation through insurance, performance support guarantees, interest rate swaps and inflation hedges. Because of the complexity this process generates, both procurers and suppliers need expensive expert advice. The risk aversion and diffusion and the consequent need for advice add cost to the projects impacting on the government’s economic argument for risk transfer. Limitations and implications The empirical work covers the private finance initiative (PFI) type of PPP arrangements and therefore the risk diffusion mechanisms may not be generalisable to other forms of PPP, especially those that do not involve the use of high leverage or private finance. Moreover, the scope of this research is limited to exploring the diffusion of risk in the private sector. Further research is needed on how risk is diffused in other settings and on the value for money implication of risk diffusion in PPP contracts. Originality/value The expectation inherent in PPP is that the private sector will better manage those risks allocated to it and because private capital is at risk, financiers will perform due diligence with the ultimate outcome that only viable projects will proceed. This paper presents empirical evidence that raises questions about these expectations. Key words: public private partnership, risk management, diffusion, private finance initiative, financiers

Women's History Review:Special Issue: Family, Private Life and Sexuality

A collection of essays based on the conference of the International Federation for Research in Women's History which was held in Queen's University Belfast in August 2003.

Private equity and entrepreneurial management in management buy-outs

Critics claim that short-term profit orientation and high deal price strategies of private equity (PE) firms can negatively affect the ability of management buyouts to initiate and sustain entrepreneurial management. This study investigates this claim by comparing effects of majority PE backed and other buy-outs at different levels of financial leverage on post buy-out increases in entrepreneurial management. We propose that PE can be used as an organizational refocusing device that simultaneously increases entrepreneurial and administrative management. We find that majority PE-backed buy-outs significantly increase entrepreneurial management practices. Furthermore, the increased financial leverage positively affects administrative management in management buy-outs. However, the effect of high financial leverage is larger for majority PE-backed buy-outs. These results support the notion that PE firms help buy-out companies develop ambidextrous organizational change: i.e. simultaneously develop entrepreneurial and administrative management practices. The findings have important implications for practitioners and policy makers.

Private equity, the minimalist organization and the quality of employment relations

This article develops a firm-level analysis of how the quality of employment relations following acquisition by private equity firms (PEFs) is contingent upon the strategic intent of those firms and the post-acquisition organizational choices they make. The efficiency gains that PEFs seek in acquired companies are expected to encourage restructuring towards a minimalist organization. However, the form such an organization takes is seen to depend on whether PEF strategy is oriented primarily towards extracting short-term value from acquired assets rather than towards renewing and developing those assets. Contrasts in the process of restructuring and in organizational form associated with these two strategies will have different implications for the quality of employment relations. The way in which PEFs restructure the companies or units they acquire is the key intervening factor between the strategic intent of PEFs and impact they have on the quality of employment relations. © The Author(s) 2010.

Is the public healthcare sector a more strenuous working environment than the private sector for a physician?

Aims: The present study examined the differences between physicians working in public and private health care in strenuous working environments (presence of occupational hazards, physical violence, and presenteeism) and health behaviours (alcohol consumption, body mass index, and physical activity). In addition, we examined whether gender or age moderated these potential differences. Methods: Cross-sectional survey data were compiled on 1422 female and 948 male randomly selected physicians aged 25-65 years from The Finnish Health Care Professionals Study. Logistic regression and linear regression analyses were used with adjustment for gender, age, specialisation status, working time, managerial position, and on-call duty. Results: Occupational hazards, physical violence, and presenteeism were more commonly reported by physicians working in the public sector than by their counterparts in the private sector. Among physicians aged 50 years or younger, those who worked in the public sector consumed more alcohol than those who worked in the private sector, whereas in those aged 50 or more the reverse was true. In addition, working in the private sector was most strongly associated with lower levels of physical violence in those who were older than 50 years, and with lower levels of presenteeism among those aged 40-50 years. Conclusions: The present study found evidence for the public sector being a more strenuous work environment for physicians than the private sector. Our results suggest that public healthcare organisations should pay more attention to the working conditions of their employees.

The City as Laboratory and the Urban-Rural Divide: the Revival of Private Property and its Limits in Post-Mao China

This paper focuses on the revival of private property and its limits in urban China. It explores the emergence of urban property markets; urban property-holding in relation to the complexity of urban governance; “minor property rights apartments” that form a de facto real estate market and cross over the urban-rural divide; the “grey areas” of blurring legal and administrative boundaries in modern China; and recent changes to the rural land system and the rural-urban divide. The conclusion flags the theme of the city as laboratory with regard to the blurring legal and governmental urban-rural distinction.

The Revival of Private Property and Its Limits in Post-Mao China

This monograph examines the nature and significance of the re-emergence of private property in rapidly changing post-Mao China.

In examining this issue, the study explores a key dichotomy in Chinese law, that is, ‘public versus private’, and examines the manner in which the Chinese define ownership. The study stresses the importance of lack of clarity in the boundaries between the public and the private in property rights.

While there is a limited move towards the recognition of private property in real estate in contemporary China, this analysis also shows that ownership in the law, and ownership as understood and practised socially, often diverge significantly.

From the Qing dynasty reforms of the late nineteenth century onwards, ‘modernist’ law and entrenched social practice have often opposed each other. In contrast to the official, and indeed legal, support for unitary and exclusive property rights, the reality of the property regime has been a fragmentation of property rights. ‘Modern’ conceptions and theories of property rights emerged in the context of nation-building from the late Qing onwards, and unitary and exclusive property rights were considered as ‘badges’ of modernity.

These conceptions and theories served (and still serve) the purposes of control and governance but were, and still are, often resisted in social practice and popular thinking, leading to alienation and conflict. As a result, analysis of the nature and the social and political implications of re-emerging private property rights provides important insights for our understanding of the changing nature of modern China.