Special Advisor to the Prime Minister - Burkina Faso
Doctor DBA, Business Science Institute
(DBA thesis supervised by Pr. Lamarque)
Does the public-private partnership (PPP), a contract by which a public body entrusts a private service provider with the financing and management of an investment dedicated to a public service, make it possible to satisfy all partners, private, public and users? Is there an appropriate financial and ownership structure for the PPP? This question concerns African countries, in search of financing for their investment projects, but it also arises for developed countries which, faced with an ever-increasing public debt, may wish to resort to this mechanism.
Impact(s) of the research
PPP, as an alternative method of public financing, is a guarantee of technical expertise for the construction of infrastructure. It is also associated with a good performance of the projects carried out in terms of their execution rate (76% of projects are completed). On the other hand, it does not guarantee compliance with the deadlines and budgets allocated to projects: the overall average annual delay is just over one year, and the average unit cost is approximately 16,000,000 euros (for more than 80% of projects).
This research calls on PPP project managers to put in place tools to control the monitoring of deadlines, respect budgets and allocate risks among stakeholders. Furthermore, it shows that the success of these operations depends on the upstream preparation of the projects, in particular around :
the quality of upstream studies
the methods for selecting the private partner
the contractual clauses binding the private and public partners.
On the other hand, there is no link between the financing and ownership structure of the PPP and the performance of these arrangements: clearly, in the West African context, the success of a PPP does not seem to depend on the percentage of equity or the financial weight of the private partner in the financing.
Theoretical foundations of the research
We have mobilized the trade-off theory, which stems from the work of authors who demonstrate the existence of an optimal debt ratio that maximizes the value of the firm (DeAngelo and Masulis, 1980; Myers, 1984; Fischer et al., 1989). This theory is based on the notion of arbitrage while taking into account different costs such as bankruptcy costs and agency costs (Jensen and Meckling, 1976; Jensen, 1986).
Based on a hypothetico-deductive methodology with hypothesis testing, our study, which is part of a positivist approach, is carried out on the basis of primary and secondary data. The primary data are derived from an online satisfaction survey of users and beneficiaries of twenty-nine PPP projects in various sectors of activity in seven countries of the West African Economic and Monetary Union. The secondary data is mainly composed of the database of PPP projects managed by the West African Development Bank. The hypotheses were tested using statistical processing methods.
The Professors' opinion
Prof. Husson underlines the economic significance of this research work: the thesis directly questions the question of development in its most global sense, of a territory and its inhabitants (Prof. Husson, rapporteur).
Professor Gajewski emphasizes the qualities of the work by underlining the quality of the presentation [...] He also insists on the fact that the problematic is very relevant and topical, recalling the need to find such partnerships in Europe, because of the public deficits (Prof. Gajewski, rapporteur).
To go further
Dabire C., 2019, « Le partenariat public-privé comme alternative au financement des infrastructures publiques performante : mythe ou réalité- Cas des pays membres de l’Union Economique et Monétaire Ouest Africaine (UEMOA) », Éditions EMS, coll. Business Science Institute.
Article translated from French with https://www.deepl.com/translator
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