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The Main Determinants in the Distress / Failure Project and Risk of the Public-Private Partnership Financing Scheme in Infrastructure Development
Mira Budi Octaviani (a), Zaafri Husodo (b)

Master of Management, University of Indonesia


Abstract

Infrastructure is the absolute necessity of a country where the increase in infrastructure is proportional to the increase in GDP of a country. With the limitation of the availability of funds from a country, there is a funding scheme involving private parties, such as Public-Private Partnership. The purpose of this study is to determine the PPP project determinants in performance, especially for the debt providers on PPP financing schemes as reference in the selection of debt providers is involved so that it becomes one of the preventive efforts of PPP project failures . This paper is based on processed data, namely the Project Database of Private Participation in Infrastructure (PPI) World Bank Project Database from 1990 to 2017 that there were 364 projects of 7050 projects which were canceled or distressed from 128 countries. In the process of empirical analysis that uses several independent variables namely GDP growth, total national debt, average growth rate of GDP, government support, tax, inflation rate, multilateral / bilateral support, type of contract, and total asset debt provider. In this study also do estimating the influence of debt providers involved in funding PPP projects which is the most financing structure use debt instead equity. As for data processing, this empirical study uses probit regression on the types of projects that cancelled / distressed. The results show that the type of project influences the failure of the PPP project, that the greenfield type tends to give success to the PPP project. In addition, a significant relationship is also indicated by the independent variable involvement of the debt provider. From the results of this project, the smaller the failure of the project.

Keywords: Public-Private Partnership, distressed, cancelled, World Bank Database, infrastructure, probit regression, debt provider

Topic: Financial Technology

Link: https://ifory.id/abstract/46QtfHhgDFkB

Conference: Conference on Managing Digital Industry, Technology, and Entrepreneurship (CoMDITE 2019)

Plain Format | Corresponding Author (MIRA BUDI OCTAVIANI)

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