THARUN DOLLA, Nicola Thounaojam, Ganesh Devkar, Boeing Laishram

Proactive contract theory-based resilience framework development for Public-Private Partnerships

Introduction

Proactive contract theory-based resilience framework development for public-private partnerships. Develops a proactive contract theory-based resilience framework for Public-Private Partnerships (PPPs) to prevent failures from crises. Identifies primary, secondary, and tertiary resilience strategies for practitioners, covering flexible contracts, risk management, and conflict resolution.

Abstract

Public-private partnerships (PPPs) are long-term contracts spanning many decades and are susceptible to failure due to dynamic changes such as crises within the contract period. The impending need to incorporate resilience to sustain the impacts of unexpected events on projects and contractual structures compelled this review of the PPP literature. This is to understand and unravel how and in what manner PPPs are undergirded by resilience.  Using a systematic literature review methodology, a critical search from 1997 to 2023 for relevant publications in the Scopus and Web of Science databases yielded 71601 papers. Further screening using filtering criteria and selection from 12 leading journals in PPP studies resulted in a final set of 116 publications, which were then analysed using NVivo. This analysis led to the organisation of contained knowledge to form a resilience framework based on proactive-preventive contract theory. The findings revealed that the primary layer of resilience focuses on keeping the cause of the problem from arising in first place through flexible contract mechanisms, concession period optimisation, and governance strategies; the secondary resilience intends to interrupt the cause and effect through revenue guarantee options, financial viability and capital structure, and risk allocation and management; and the tertiary resilience is about minimising the damage of any unwanted occurrences such as crisis through conflicts and resolution mechanisms and the renegotiation framework. This review synthesised the accumulated PPP resilience knowledge to be used by practitioners while handling the projects – both procured and in pipeline – through the reviewed suggestions and strategies.

Review

This paper presents a timely and critical exploration into developing a proactive contract theory-based resilience framework for Public-Private Partnerships (PPPs). Given that PPPs are long-term contractual arrangements highly susceptible to dynamic changes and unforeseen crises, the imperative to embed resilience mechanisms is paramount for their sustained success. The authors aptly identify the knowledge gap concerning how PPPs are undergirded by resilience, setting the stage for a comprehensive literature review aimed at understanding and synthesizing existing insights to construct a novel framework. The focus on a proactive-preventive approach is particularly pertinent, moving beyond reactive measures to address potential failures at their root. The methodology employed is robust and systematic, lending significant credibility to the findings. A systematic literature review spanning from 1997 to 2023 was conducted across Scopus and Web of Science, initially yielding a vast dataset of 71,601 papers. Rigorous screening, including filtering criteria and selection from 12 leading journals in PPP studies, refined this to a manageable and highly relevant set of 116 publications. The subsequent analysis using NVivo software facilitated the organization and synthesis of knowledge, culminating in the proposed resilience framework. This framework is intelligently structured into three distinct layers: primary resilience focusing on preventing problems through flexible contracts, concession period optimization, and governance; secondary resilience aiming to interrupt cause-and-effect via revenue guarantees, financial viability, and risk management; and tertiary resilience designed to minimize damage through conflict resolution and renegotiation frameworks. The developed framework represents a significant contribution to both theory and practice in PPP management. By synthesizing accumulated knowledge into a structured, proactive-preventive model, the paper offers invaluable guidance for practitioners. The actionable insights, ranging from contractual flexibility and governance strategies to financial safeguards and renegotiation mechanisms, provide a holistic toolkit for enhancing the resilience of PPP projects. This review not only advances the academic understanding of PPP resilience but also furnishes practical suggestions and strategies that can be directly applied by stakeholders when handling both procured and pipeline projects, ultimately fostering more robust and sustainable public-private collaborations in an increasingly unpredictable global landscape.

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