Etude canvas for the public private partnership projects' preliminary assessment period

When the infrastructure investments which are the most striking examples of the construction sector accordingly investment budgets are examined, it is possible to state that; although, the growth trend of the infrastructure investments which started in 1990's, has been affected in a negative manner due to the 1997 Asia Financial Crisis and 2001 Economic Crisis, today's general trend shows that the developing countries around the world prefer to grow with infrastructure investments. In this investment process that shaped the economic policies of the countries; if the financial capacity, knowledge and experience level of the governments are not enough, private sector makes cooperation with governments by using its technical capacity and financial power. Main participants of this cooperation are the public party and the private party so the association is called as the "Public Private Partnership". Public party is the representative of the society and chooses the private party at the end of a procurement process. Private party is composed of various partners like sponsor, lender, contractor, operator etc. Depending upon the project type and the task distribution between these parties and public party, this collaboration is turned into different forms and it is applied with different nomenclature. When the applications of the public private partnership projects in Turkey is observed it is easy to notice that the Build Operate Transfer is the most used PPP model in Turkey and it has a significant role in goverment's politics. The projects which are known as "Mega Projects" and come to the forefront with their dimensions and engineering techniques, have contributed to the Turkey to be one of the top countries in public private partnership projects. Marmaray, Yavuz Sultan Selim Bridge, Eurasia Tunnel, Osmangazi Bridge and IGA Airport are some of the instances to show the goverment's positive approach to PPP model. Moreover, the projects like Canal İstanbul which is in the planning phase proves that goverment's approach to infrastructure projects and PPP model is not going to change in a short run. Public private partnership is not only a hot topic in Turkey. It is also very often preferred project delivery and project finance method around the world, especially in developing countries. As it is known, infrastructure projects have a huge impact on the economy and these countries' preference stems from this cause. As it may be seen in the explanations, public private partnership topic is very popular both in Turkey and in the other developing countries. As a consequence of this, PPPs were chosen as the foundation of this thesis study. After this decision had been made, the parts of the topic which is convenient to improve was searched. As it is known, public private partnerships are necessitated very high investment costs. In addition to that, a fault which is made during the preparation phase of the project may cause catastrophic costs and losses. Due to this fact, potential risks and success factors which are going to be effective on the project, must be analyzed very well in the preperation process of the project. This analysis will be helpful to determine the points which might affect performance in a negative manner. Besides, focusing on that points is going to be advantageous to increase performance. Furthermore, the analysis will be a tool to predict performance. At the end of the literature review and expert interviews, it was seen that there is not such an existing structure in the reel applications. So, the requirement for a structure which is able to make the process more efficient, was noticed.Actually, it is possible to say that there are some academic studies related with the topic, but they focus on specific public private partnership project types and most of them are not used in real applications. Also, CII has a module to study on projects in the planning phase which is suitable to use in projects. However, this thesis study's approach differentiates from the CII's modules and the other academic studies by its scope and methodology. In the scope of thesis, a detailed literature review about the public private partnerships was made and lots of success criteria, success factors and risk factors were determined as it may be seen in the Chapter 3. It was thought that the analysis of these factors and criteria will bring benefits during the beginning phase of the project. Due to this fact, it was decided to gather all of the factors and criteria together and designing a public private partnership etude canvas. To analyze enterprise projects, there is a structure which is called as "Business Model Canvas". This structure is used to etud small projects by nine main category. Business Model Canvas became a starting point for this thesis study. Yet, to apply this model on PPPs directly is not easy owing to PPPs's complex structure. Nonetheless, it is possible to found a structure which is more suitable for PPPs by using the factors and criteria. Evaluations which are going to be made on the canvas by analyzing factors and criteria, are going to maintain the examination of the topic very detailed and it is also going to be a tool to performance estimate. An assesment which is made for an any risk is a prediction for the potential effects of that risk. In addition to that, assesment of the success factors and success criteria also help to make forecast about the performance of the project. To illustrate, inflation is one of the risk factors in this thesis study. The people who are responsible for the pre-assesment of the project and preperation of the contract will make analysis related with the inflation risk factor. They will try to answer questions like; what is going to be the level of the inflation? How is the level of inflation going to affect the project? What precautions can be taken to avoid from negative affects of it ? What type of clauses must be added on the contract etc. ? In this manner; between the success criteria, success factors and risk criteria which were determined as a result of the literature review and experts interviews, a hierarchical structure was founded as; "Main Performance Groups" – " Basic Factors and Basic Criteria Groups" – "Subfactors and Subcriteria". After that, this hierarchical structure was designed on the public private partnership canvas like it was aimed. Then, the compensation and mitigation mechanisms for the potential risks were determined with the literature review and expert lawyer's opinions. These mechanisms were added to the PPP canvas too. By comparing the "Main Performance Groups" and " Basic Factors and Basic Criteria Groups" by AHP model in Chapter 5, weight of them were calculated to use in performance estimation. In AHP study there were five participants; two of them were from academy, two of them were from private sector and one of them was from public sector. It is important to say that when the participants change, the weights of the criteria will also change; because they have experiences in different kind of projects, they may have different views. So, performance estimation part of the study may be seem not logical in the first look. Yet, the AHP study in the thesis is a demo study. Writer's advice for the users of the canvas is; to use AHP form as an additional tool for the canvas. People who are going to use the canvas, will have a lot of information after the completion of filling of the canvas. Consequently, they will fill AHP form. Filling of the AHP form by the people who fill the canvas, will be supportive to make consistent and project spesific AHP study. So, they are going to find weights of the sucess criteria and success factors. Risk factors's weights are not going to be calulated at the end of the AHP study, since pairwise comparisons are made at the level of basic criteria and basic factors. Whereas, risk factors are classified as subfactors in this study as it was mentioned before. As a result, it may be said that the thesis study was started with a detailed literature review and it was targeted to put a solution for one of the problems of the public private partnerships, which are so popular project delivery model and project finance method in developing countries. In accordance with this target, the thesis puts its output as a public private partnership preliminary assesment canvas and this canvas is usable to make analysis of factors and criteria which are effective on PPP. Furthermore, it is suitable to make performance estimation and also helpful to determine mitigation and compensation mechanisms for the risks in the projects.