Asheem Shrestha

Principal Agent Problems Evident in Chinese PPP Infrastructure Projects

The demand for infrastructure remains high in China. In order to meet this demand under conditions of limited government funding availability, local governments have increasingly sought private participation through ‘public, private partnerships’ (PPPs). While PPPs are recognised as a reliable mode for delivering infrastructure projects, agency problems are also known to interfere with their success. The nature of these agency problems, along with the types of partnership arrangements under which they occur, is the subject of this research. Semi-structured interviews were conducted with PPP consultants working on infrastructure projects in China. Results suggest that opportunistic behaviour is to be found both within the private sector and within the government sector. While the private sector is shown to take advantage of ‘information asymmetries,’ the government sector is shown to allocate project risks and responsibilities disproportionately in their favour. Results also indicate that PPP arrangements between local government and ‘state owned enterprises’ (SOEs) were less prone to agency abuse, while agency problems in PPP arrangements between local government and private firms were relatively greater.

Risks in PPP Water Projects in China: Perspective of Local Governments

AbstractIn the last decade, China has implemented more public–private partnership (PPP) projects in the water sector compared to other sectors. However, efficient management of risks in these proje...

Risk allocation in public private partnerships in China's water projects: a principal agent approach

Past research on China’s public private partnerships (PPPs) shows that due to local governments’ lack of understanding, risks are not allocated properly. Long term contracts in the water sector present its own risks, unique due to the characteristic of water projects; however, there is little or no research about risk allocation on these projects in the literature. Risk and their allocation in PPP water projects are regarded as any other PPP project and are not analysed independently. Most research regarding risks in PPP projects in China have been done from the private sectors’ perspective and very limited research have focused on the government’s point of view. In this paper, we develop a framework to examine risk allocation particularly for PPP water projects from the government’s perspective in the context of China. Based on a review of the literature on risk allocation, three criteria were identified and used for the development of the framework and these criteria were discussed using the principal agent (PA) theory approach.

The Evaluation of Urban Renewal Policies in Shenzhen, China (2009–2016): An Analysis Based on Policy Instruments

Urban renewal is a realistic approach in the development of urban areas and is essential for major Chinese cities. It is increasingly becoming a trending topic in the urban planning domain and many researchers are focusing on how to formulate scientific and practical urban renewal policies using different policy instruments. This paper aims to analyze the urban renewal policies of Shenzhen, which was the first city in China to promulgate urban renewal legislation. In doing so, an analytical framework is established by focusing on three main policy instruments and several sub instruments within them. Shenzhen’s four main urban renewal policies issued between 2009 and 2016 are analyzed through the framework. Quantitative content analysis was used in the review and analysis of the data. The results shows that Environmental-type policies are most widely applied by the government in Shenzhen, and “Regulation Control” and “Goal-planning” are the two policy instruments that are most frequently adopted. On the other hand, the application of Supply-type polices and Demand-type polices were found to be inadequate, with only a few effective instruments being adopted. These findings provide strong implications for the improvement and development of urban renewal policies in China through these key findings.

A Cluster Analysis of Real Estate Business Models in China

The globalized construction market has created strong completion among industry players. To remain competitive, the building developers are constantly in search of novel business models. As a result, diverse real estate business models have emerged and research into business model construct has also intensified. Despite the growing academic interest in the area, no commonly accepted definition and construct of real estate business models have yet been established. Also, there is a lack of quantitative studies of the real estate business models in China. The aim of this paper is thus to (1) identify the variables for studying the real estate business model; and (2) reveal the main streams of real estate business model in China. The research was carried out through the combination of a two-step cluster analysis of 117 real estate companies in China. The business model clusters were revealed using a number of variables including target customer, product, market orientation, finance, collaboration network, core capability and revenue. Five clusters of these companies were revealed: (1) commercial property model; (2) government-dominant model; (3) management-dominant model; (4) resource-dominant model; and (5) domestic leading model. The findings should help with understanding the complex profiles of real estate business models and support cross-context learning of the practices.