Modeling system to support the determination of the Return on Investment (ROI) and mitigation tools for PPP projects

Abstract

Governments in many countries tended to assign to the private sector both the management of existing infrastructure enterprise operations and for the financing of new infrastructure assets. Public-Private Partnerships (PPP) concept has been of interest to governments of developed and developing countries, resulting in their worldwide use. Using the PPP method enables governments to reallocate risks and rewards to the private sector for larger projects throughout the projects' operating life. PPP projects are usually more difficult to implement than other traditional procurement models because of their complexity and that their nature and their long duration. Effective Public Private Partnerships (PPP) realize that both public and the private sectors each have certain benefits, relative to the other, in achieving specific tasks. The government’s contribution to a PPP may take the form of capital for investment, a transfer of assets, or any other commitments that support the partnership. The private sector’s role in the partnership is to ensure participating of its expertise in different approaches such as management, operations, and innovation to run the business more efficiently than it is in other sectors. The private partner may also contribute investment capital depending on the form of contract. A number of failed PPP in the infrastructure sector proof to the problems and challenges that facing decision makers. Infrastructure investment concludes contracts that are complicated and of long duration, as well as must ensure financial sustainability while meeting public authorities’ requirements, social objectives and end user needs. The challenges are more severe when foreign investors are involved in such projects, as is often the case where the infrastructure project exceeds a certain size. In addition, private infrastructure investment has become increasingly