Disputes among parties in a public private partnership project: Case study and suggestions

Construction is multidisciplinary and multi firm including branch of work. Even, every construction work seems to pass through similar process, every work brings one of a kind conditions. Considering environmental factors, country' s economical and social conditions, profit expectations of parties, completing the project in the expected time, cost and quality, the quality of the contract between parties is essential. The kind of Partnership between parties varies by the conditions and expectations among parties. In our country revenue sharing model for social responsibility projects, primarily aimed for public behalf, like housing estates for low income level, is used in public private partnership projects. Revenue sharing model is a frequent model for housing estate projects in our country. Especially social responsibility projects that are behalf of the public and primarily public benefit intended projects are done with revenue sharing model in our country. Using this model, as in the case study the two parties are public and private firms. Public side produces construction work on behalf of public, private side obtains the aimed profit. As it seems in the domestic and abrode examples, the private party without outputting any funds and saving funds for other projects while producing public behalf projects, private party obtains its profit. In this kind of partnership, public party provides bureaucratic convinence, the private partyprovides technology and experience, thus parties put forward their strengths. Abroad public private partnerships produce substructure works different than domestic works. In abroud countries revenue sharing model is not a frequent model, private and public sector partnerships use different kinds of contracts and in general named as public private partnership. In public private partner ships its important to consider both parties benefits producing a win- win condition. Construciton work since its nature, its in a uncertainty medium and includes risks. Designating risks and considering a behavior for risks is an impartant step for avoiding disputes process of work and after completion. In revenue sharing model, since majoratiy of risks are transferred to private party, it is important consider risk in the bidding phase of the project. Without considering a behavior for risks, it will be difficult to end the project in expected time, cost and quality and both private and public side will experience loss. In the subject of the thesis, the case study of a public private partnership project processes, contract and disputes among parties are studied. The constract and processes are divided to sections, reasons for disputes are studied through the interviews with executives from private and public parties and suggestions are received. In adequate contract and contract addendum, contradicions among contractual clauses, not determining solution for disputes, administraitons non- contractual behavior for change orders are the leading reasons for disputes. For ending the project in the expected time, cost and quality it is important to organize contractual conditions and determine occurring disputes to be beneficial for both of the parties.