Stimulating the attractiveness of PFI/PPPs using public sector guarantees, Hakeem Owolabi, Prof. Lukumon Oyedele, Hafiz Alaka, Muhammad Bilal, Saheed Ajayi, Olugbenga Akinade and Alirat Agboola
Hakeem Owolabi
University of Northampton, Northampton
UK
Prof. Lukumon Oyedele
Bristol Big Data Laboratory
University of the West of England, Bristol
UK
Email: L.oyedele@uwe.ac.uk
Hafiz Alaka
Faculty of Engineering and Computing
Coventry University, Coventry
UK
Muhammad Bilal, Olugbenga Akinade
University of the West of England, Bristol
UK
Saheed Ajay
Leeds Beckett University, Leeds
UK
Alirat Agboola
Obafemi Awolowo University, Ile-Ife
Nigeria
DOI: 10.1108/WJEMSD-05-2018-0055
Purpose: Although the UK Guarantee Scheme for Infrastructures (UKGSI) was introduced in 2012 to address the huge financing gap for critical infrastructures, PFI sponsors have so far guaranteed only few projects. Many stakeholders in the project finance industry have blamed this situation on lack of general understanding of strategies for harnessing the benefits of the government guarantee scheme. The purpose of this paper is to investigate the perspectives of UK’s PFI/PPP stakeholders on critical factors influencing approval for government guarantees using the UKGSI as a focal point.
Design/methodology/approach: Using a mixed methodology approach, this study identified 26 important criteria used in evaluating government guarantee applications through focus group discussions with PFI stakeholders. The identified criteria were then put in questionnaire survey to 195 respondents within the UK PFI/PPP industry.
Findings: Through factor analysis, five critical factors determining successful government guarantee application were unravelled. These include: compliance with UK National Infrastructure Plan; demonstration of project bankability and risk management; value for money; proof of projects’ dependence on government guarantee; and certainty of planning commission’s approval.
Originality/value: Results of this study will facilitate an in-depth understanding of critical factors necessary for accessing government guarantee scheme for PFI/PPPs, while also improving the bankability of potential PFI projects.
Keywords: Public private partnership (PPP); Stakeholders; Public sector; UK Guarantee Scheme for Infrastructures (UKGSI); Private finance initiatives (PFI).
Citation: Owolabi, H., Oyedele, L., Alaka, H., Bilal, M., Ajayi, S., Akinade, O. and Agboola, A. (2019), "Stimulating the attractiveness of PFI/PPPs using public sector guarantees", World Journal of Entrepreneurship, Management and Sustainable Development, Vol. 15 No. 3, pp. 239-258. https://doi.org/10.1108/WJEMSD-05-2018-0055
