PPPs in road renovation and maintenance: a case study of the East Coast Road project

• Published in: Journal of financial management of property and construction 2010-04, Vol.15 (1), p.21-40
• Main Authors: Rajan A., Thillai, Siddharth, R., Mukund, S.P.
• Format: Article
• Language: English
• Subjects: Capital assets; Case studies; Coastal environments; Costs; Developing countries; Development banks; Finance; Financing; India; Infrastructure; Investment; LDCs; Maintenance; Partnership; Private sector organizations; Public private partnerships; Public sector organizations; Renovating; Roads; Roads & highways; State government; Toll roads; Transportation planning
• ISSN: 1366-4387; 1759-8443
• DOI: 10.1108/13664381011027962

Purpose - Public-private partnerships (PPPs) are being frequently used today to private sector investment in road projects. Most of the road PPP projects are either for new roads or for those that involve significant expansion of existing capacity. There are limited instances of PPPs for renovating and maintenance of existing roads. The purpose of this paper is to highlight the applicability of using PPPs for road renovation and maintenance projects.Design methodology approach - This paper uses a case-study approach since it is an appropriate strategy to investigate a phenomenon within its real life context. The East Coast Road project was chosen for the study because it was the first project in India to use PPP for road renovation and maintenance, and being the first project of its kind, the case was of general public interest.Findings - The paper indicates that risk levels in Rehabilitate, Improve, Maintain, Operate and Transfer (RIMOT) projects are lower than Greenfield BOT projects. Even in areas like renovation and maintenance, PPP structures can bring many advantages over traditional procurement.Research limitations implications - This paper has the limitations attributable to single case studies. There is a need to extend this paper to include more such case studies to evaluate their relevance for infrastructure development, particularly in emerging countries.Practical implications - PPP structures can be useful for renovating and maintaining the existing roads. Modalities such as the RIMOT framework can have greater potential than the conventional BOT structures. Private investments in infrastructure can also be through a corporate finance structure.Originality value - This paper describes and analyzes the experience of India's first PPP for renovation and maintenance. The findings of this paper would have value for policy makers who are interested in attracting private sector finance and expertise in infrastructure and more specifically in roads.