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Stimulating the attractiveness of PFI/PPPs using public sector guarantees

Owolabi, Hakeem; Oyedele, Lukumon; Alaka, Hafiz; Bilal, Muhammad; Ajayi, Saheed; Akinade, Olugbenga; Agboola, Alirat

Authors

Hakeem Owolabi Hakeem.Owolabi@uwe.ac.uk
Associate Professor - Project Analytics and Digital Enterprise

Hafiz Alaka hafiz.alaka@coventry.ac.uk

Muhammad Bilal Muhammad.Bilal@uwe.ac.uk
Associate Professor - Big Data Application

Saheed Ajayi saheed.ajayi@leedbeckett.ac.uk

Olugbenga Akinade Olugbenga.Akinade@uwe.ac.uk
Associate Professor - AR/VR Development with Artificial Intelligence

Alirat Agboola



Abstract

Purpose: Although the UK Guarantee Scheme for Infrastructures (UKGSI) was introduced in 2012 to address the huge financing gap for critical infrastructures, PFI sponsors have so far guaranteed only few projects. Many stakeholders in the project finance industry have blamed this situation on lack of general understanding of strategies for harnessing the benefits of the government guarantee scheme. The purpose of this paper is to investigate the perspectives of UK’s PFI/PPP stakeholders on critical factors influencing approval for government guarantees using the UKGSI as a focal point. Design/methodology/approach: Using a mixed methodology approach, this study identified 26 important criteria used in evaluating government guarantee applications through focus group discussions with PFI stakeholders. The identified criteria were then put in questionnaire survey to 195 respondents within the UK PFI/PPP industry. Findings: Through factor analysis, five critical factors determining successful government guarantee application were unravelled. These include: compliance with UK National Infrastructure Plan; demonstration of project bankability and risk management; value for money; proof of projects’ dependence on government guarantee; and certainty of planning commission’s approval. Originality/value: Results of this study will facilitate an in-depth understanding of critical factors necessary for accessing government guarantee scheme for PFI/PPPs, while also improving the bankability of potential PFI projects.

Citation

Agboola, A., Owolabi, H., Oyedele, L., Alaka, H., Ajayi, S., Akinade, O., & Bilal, M. (2019). Stimulating the attractiveness of PFI/PPPs using public sector guarantees. World Journal of Entrepreneurship, Management and Sustainable Development, 15(3), 239-258. https://doi.org/10.1108/WJEMSD-05-2018-0055

Journal Article Type Article
Acceptance Date Apr 1, 2019
Online Publication Date May 28, 2019
Publication Date Oct 22, 2019
Journal World Journal of Entrepreneurship, Management and Sustainable Development
Print ISSN 2042-5961
Electronic ISSN 2042-597X
Publisher Emerald
Peer Reviewed Peer Reviewed
Volume 15
Issue 3
Pages 239-258
DOI https://doi.org/10.1108/WJEMSD-05-2018-0055
Public URL https://uwe-repository.worktribe.com/output/849318
Publisher URL https://doi.org/10.1108/WJEMSD-05-2018-0055
Related Public URLs https://www.emeraldinsight.com/toc/wjemsd/8/1

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