Public–private partnership collaborations between government and private sector institutions are becoming essential for large-scale infrastructure development. This collaboration enables governments agencies and municipalities to move forward with large capital investments like urban rail transit. Government can deliver on public services while benefiting from private sector expertise. In return the private sector institutions operate the project and receive profits. Finding the right partners is critical. Urban rail transit PPP projects are long-term commitments spanning 5 to 30 years. It is essential to have a competent operator providing reliable transportation services, maintaining safety standards, as well as turning a profit. The complex construction of URT projects might make governments favor construction companies, but can they manage the operational components long-term? Geographic factors can also come into play, where governments might want to favor local companies who don’t have the requisite experience, resulting in a poorly managed project.
In a study for the Journal of Construction Engineering and Management, researchers Xian Zheng, Rui Li, Yilong Han, Rui Xue, and Ju Bai examine the key factors that determine governments’ operator choices for URT PPP (URT3P) projects. Their paper, “The Dilemma of Operator Selection in Urban Rail Transit PPP Project Operations: A LASSO Approach,” follows two stages. Stage 1 kicks off with an exhaustive literature review, followed by semi-structured interviews to identify factors affecting operator selection. In Stage 2, the authors apply least absolute shrinkage and selection operation (LASSO) regression to analyze real-world projects and influences that played a role in operator selection. This research can help private sector entities improve their operational capacity and assist governments in developing appropriate operation performance strategies for URT3P projects. Learn more at https://doi.org/10.1061/JCEMD4.COENG-12378. The abstract is below.
Abstract
Public-private partnerships (PPPs) have become an important option for financing urban rail transit (URT) projects. To ensure the effective operation of URT projects and better serve the public, governments must select suitable operators as part of private-sector consortiums to achieve successful PPP implementations, but they often face a dilemma in choosing between local URT groups and nonlocal operators. In this study, we examine the key factors that determine governments’ operator choices for URT PPP (URT3P) projects with a two-stage approach. A four-dimensional (4D) indicator system containing 20 factors was first developed, and least absolute shrinkage and selection operator (LASSO) regression was applied to analyze one of the largest regional URT data sets in China. Five key factors that significantly influence operator selection are identified, including project operation duration, government-business relationships, private-sector entity organization type, private-sector entity ownership type, and whether the private-sector entity owns an operating firm. This study contributes to the body of knowledge on URT3P project management, and this systematic approach can be used by local governments to select suitable operating partners in similar exploratory contexts.
Explore these findings and how you might benefit in the ASCE Library: https://doi.org/10.1061/JCEMD4.COENG-12378.
