Reasons for Implementing Public-Private Partnership in Road Construction: Perspective from State-Owned Agencies and Private Sector in Ghana

Presently, there is a request by various stakeholders in the road construction sector to embrace public-private partnership (PPP) as an alternative means of solving the road infrastructure deficit in Ghana. To this end, the study sought to identify the underlying reasons for implementing public-private partnership in road construction in Ghana. It also intends to examine the differences in the perception of these reasons by the State-owned Road Agencies (SRA) (who represent the government) and the Private Sector (PS). A questionnaire survey was used to elicit the perceptions of the SRA and PS on the underlying reasons for implementing PPP in road construction in Ghana. An in-depth interview was also conducted among four PPP “experts” in Ghana. Seventy-six functional responses were analysed using Statistical Package for the Social Science (SPSS) to rank the importance of the reasons based on the overall responses, as well as the responses from both the SRA and the PS and to examine the differences in the perceptions between the two groups. “Shortage of government funding”, “Political pressure”, “Economic development pressure of demanding more facilities”, “accelerate project development”, “Allowance for shared risk”, “Ability to raise funds for project by private sector”, and “Facilitate creative and innovative approaches” were found to be the seven most important reasons for adopting PPP in road construction in Ghana. In terms of the differences in perception between the SRA and PS groups, the hypothesis test results indicated that significant differences exist for only a few of the reasons.

partnership (PPP) is becoming more and more common. Presently, there is a request by various stakeholders in the road construction sector to embrace PPP as an alternative means of solving the road infrastructure deficit in Ghana.
PPP is a globally accepted public sector procurement mechanism whereby the government engages commitment from the private sector and transfers a certain level of responsibilities to the private sector in providing public facilities or services. PPP in the broadest form refers to any relationship between the public and private sectors in delivering goods, services, and infrastructure (Friend, 2006). However, different countries may have different definitions of PPP. In many countries, PPP is defined as a long-term business relationship between the government and private sectors to provide public services whereby the risks and returns are shared (Reijniers, 1994 The variances in the features of PPP between countries reflect the unique motivations for implementing PPP in each country (Ismail, 2014). In Ghana PPP is fairly new. It gained some attention in early 2000 when the government was faced with the huge infrastructure deficit in the midst of limited budget resources. In 2004, Ghana developed its first PPP policy guidelines but was not operationalized. This was enhanced and adopted in 2011 to guide the PPP development process and to provide a clear and consistent process for all aspects of PPP project development and implementation from projectidentification, appraisal, selection, to procurement, operation and maintenance and performance monitoring and evaluation (MOFEP, 2011).
In the context of developing countries, there are differences in terms of what actually drives governments to adopt PPP.
While some PPP experts are of the opinion that most developing countries accept the PPP policy as a condition on loans from International Organizations (Jamali, 2004; Thomas et al., 2006;Appuhami et al., 2011), others raise the argument that some engage in PPP to alleviate poverty in their countries (Bhatia & Gupta, 2006). In spite of the controversy about PPP policy in developing countries, most developing economies actually have huge infrastructure deficit and excessive government debts which in a way has led to the poor economic development and lower standards of living. This makes it more important for PPP to be explored in these developing countries to boost infrastructure development and improve the living standard of the people.
Realizing the various factors attracting PPP implementation in different countries, this present study aims to assess the reasons for implementing PPP in road construction in Ghana. Though a study (Osei-Kyei, Dansoh&Ofori-Kuragu, 2014) has been conducted on the reasons for adopting PPP for construction projects in Ghana, this present study focuses on the road construction sector which is a significant part of infrastructure projects. In ensuring that the government's agenda for greater private sector participation via the PPP program in road construction is achieved, it is crucial to identify the factors that attract the private and public sectors to participate in PPP. Hence, this study aims to offer some evidence on this issue.
Specifically, there are two objectives of the present study. First, it assesses the reasons for adopting PPP for road construction in Ghana as perceived by the SRA and PS groups. Second, the study intends to assess the differences between the SRA and PS in terms of their perception of the importance of the underlying reasons.
This article is exceptional in the sense that it highlights not only the important underlying reasons for adopting PPP in road construction Ghana but also offers evidence on the differences in the perceptions of the two key parties involved in PPP (i.e., the SRA and the PS) in relation to the reaons. It is vital to put forward the differences of opinion of the two parties because each party plays a different role in a PPP contract.
The remainder of this paper is structured as follows. The next section reviews relevant literature concerning the reasons in adopting PPP. This is followed by a methodology section, which describes the instrument used, sample and data collection and analysis procedures. The results are discussed in the subsequent section, followed by suggestions for future research and the conclusion in the final section.

Reasons for Implementing PPP
Most governments over the world attempt to adopt PPP in procuring infrastructure projects but each has a reason for adopting the policy. Li (2003) and Li et al. (2005) conducted a survey to examine the factors attracting PPP implementation in the UK. The authors identified 15 attractive factors upon extensive literature search: "solves the problem of public sector budget restraint", "enhances government integrated solution capacity", "reduces public money tied up in capital investment", "caps the final service costs", "reduces the total project cost", "saves time in delivering the project", "reduces public sector administration costs", "benefit to local economic development", "non-recourse or limited recourse public funding", "transfer of risk to the private partner", "improves maintainability", "facilitates creative and innovative approaches", "improves buildability", "accelerates project development" and "technology transfer to local enterprise". Li (2003) stated that "transfer of risk to the private partners" is perceived as the top attracting factor for PPP implementation in the UK. Other important attractive factors include "solves the problem of budget restraint" and "non-recourse or limited recourse public funding".
Additionally, Li et al. (2005) examined the differences between the perception of the public sector and private sector respondents concerning the importance of the 15 attractive factors. The authors established that there were only significant differences for three factors between the two key PPP players.
Also, a study was carried out in 2005 to examine the factors motivating various stakeholders (i.e. government, nongovernmental organizations (NGOs), international organizations (IOs) and private company) to implement a community development programme in Myanmar using the PPP approach (LaFrance & Lehmann, 2005). The study revealed that various stakeholders have different key incentives for adopting PPP. For example, the motivations of the government for having PPP are to support the country's development and to benefit the citizens with improved services. For the NGOs, PPP is seen as a mechanism for them to share expertise and to improve transparency in the public management. In the same way, private sector companies are motivated to become involved in PPP in order to provide technical knowledge, skill, andexperience in delivering public services, and, at the same time, to gain a reasonable return on financial and technical investment.
"economic development pressure demanding more facilities" and "inefficiency because of public monopoly and lack of competition". In Hong Kong, the three key reasons are "private initiative", "economic development pressure demanding more facilities" and "high quality of services required". The main reasons for implementing PPP in the UK are "shortage of government funding", "economic development pressure demanding more facilities" and "avoid public investment restriction".
Prior studies have highlighted various factors that have attracted various parties to engage in PPP projects. According to Hall (1998), the rationales for a country to prefer the use PPP to execute public projects are that the private sector is inherently more efficient and more innovative than the public sector, the private sector has the advantage of competitive pressures in the delivery of public services and the private sector might be able to manage some types of risk more effectively than the public sector, which ultimately lead to a better quality of services provided, cost savings and the reduction of risks taken on by the government.
Hodges and Mellett (2004) also underscored the advantages of PPP, which were comparable to those mentioned by Hall (1998) and in addition, they indicated that PPP can reinforce project monitoring and ensure greater accountability. Also, Leiringer (2006) claimed that governments across the world are favouring PPP because of reasons such as lower project costs, shorter construction times, competitive advantages, higher overall qualities in the end product and the benefits accrued from letting the private sector be innovative in its solutions. Mumford (1998) identified the following six sources of savings of PPP over conventional procurement options: clearer definition and specification of user needs, more careful lifetime design and costing by the private constructor, speedier construction, and commissioning, more effective monitoring of contracts, incentives that better align effort with risk and rewards, and decision-making that better exploits asset compatibility. (2004)  in similar studies in other countries, they were used as the basis for the present study. A multiple research approach involving in-depth interviews and questionnaire survey was adopted for the study. In-depth interviews were carried out prior to the questionnaire survey to examine the relevance of the identified reasons in the Ghanaian context. The reasons were reduced to twenty-two after the interview.

Hurst and Reeves
Senior Engineers, Quantity Surveyors and Directors with the state-owned road agencies who have some training in PPP i.e.
Ghana Highway Authority (GHA), Department of Urban Roads (DUR), Department of Feeder Roads (DFR), and Ministry of Roads and Highways (MRH) and also potential private sector organisations interested in investing in the road sector were involved in the study. Four PPP "experts" were involved in the in-depth interview prior to the questionnaire survey. The entire respondents were purposively selected to ensure organisations and individuals that were best placed, could be accessed and were willing to provide the needed information were consulted for the required information. One hundred and twentyeight (128) respondents participated in the questionnaire survey. The questionnaire used consists of 22 reasons for implementing PPP as an alternative to the traditional procurement, as shown in Table 1. The questionnaire prepared adopted closed-ended questions but options were given for respondents to add to the list of possible answers. The respondents were asked to rate the importance of each reason based on a five-point Likert scale from (1) most important to (5) not important. Provides government assistance in financing Each questionnaire was administered through a face-to-face session which ensured that 76 questionnaires out of the 128 were returned complete and used in the analysis, representing a response rate of 59%. The data were analysed using the Statistical Package for the Social Sciences (SPSS) software. The descriptive statistic of the mean score was computed for the five-point Likert scale based on the importance of each of the 22reasons. Then, based on the mean scores, the reasons were ranked according to the importance as perceived by the overall respondents as well as by the SRA and PS independently. An independent sample t-test was carried out to statistically examine the differences in the perceptions of the two groups of respondents.

Hypothesis testing
From literature it is predictable that the SRA and PS might have diverse views as to a particular reason for implementing PPP in road construction in Ghana. Based on this, a hypothesis testing using independent sample t-testwas carried out to determine the differences in views for using PPP in road construction. If the Significant value calculated is less than the significant value set (0.05) then the Null Hypothesis (Ho) is rejected.
Null Hypothesis (Ho) -There is no difference in the views of SRA and PS on reasons for implementing PPP in road construction in Ghana.

Background Information of Respondents
Out of 76 respondents, 40.8 percent of the respondents are employed with private sector companies while the remaining 59.2 per cent are engaged in public sector, as represented in Table 2. From Table 2, majority of the respondents are managers, directors and heads of departments in their organizations respectively. This makes them the main decision makers thus information from them is extremely dependable. Besides, 38.2% of the total respondents are operational staff who are mostly exposed to the partnership complexity and are also responsible for handling the technicalities of the partnership deals. More than half of the respondents have PPP experience less than 5 years and between 6 to 10 years. It is not surprising that most

Results and Discussions
In this section, findings on the overall results on the underlying reasons is presented, followed by findings on differences between the SRA and PS on the reasons. Table 3 illustrates the mean scores and the rank of the importance of each of the 22 reasons based on the overall respondents and the sector (i.e., public and private sectors). The respondents rated each reason based on a five-point Likertscale where 1 means not important and 5 means most important. The results in Table 3 show that all the 22 reasons were perceived by each group of respondents to be either "most important", "important" or "moderate" because the mean scores for the reasons range from 4.332 to 2.340.

Overall respondents' perceptions on the importance of the reasons
Based on the mean score results of all respondents, seven reasons were perceived as "most important" and have mean scores above 4.021. The reasons, in descending order of importance, are: (1) Shortage of government funding, (2) Political pressure, (3) Economic development pressure of demanding more facilities, (4) accelerate project development, (5) Allows for shared risk, (6) Ability to raise funds for project by private sector, and (7) Facilitate creative and innovative approaches.
"Shortage of government funding" is the first most important reasons for adopting PPP in road construction in Ghana as perceived by the overall respondents. PPP is widely adopted by the government of many countries because it is claimed that having the private sector take on a significant responsibility to construct, finance, operate and maintain public infrastructure could reduce government allocation for development projects (Peat, 1995;Robinson, 2000). This is evident in studies by In Ghana's quest to rapidly grow its economy, there is the need to have good roads to facilitate business as good road is linked with optimal economic performance. Thus, there is pressure on government to build some vital roads to facilitate its economic growth. The government seeks to achieve this through the involvement of the private sector via PPP. The finding Another most important reason ranked fifth by respondents is 'allows for shared risk'. PPP as a partnership enables risk to be shared between parties. The private sector is well known for its ability to better manage risk through efficient asset procurement and service delivery. The Government of Ghana emphasizes that a partnership deal with the private sector cannot be considered as PPP unless there is considerable shared risk (MOFEP, 2011). It must be emphasized that risks must be identified and allocated to the party that can best manage it (Li et al., 2005).
The other most important reason is "private sectors ability to raise funds for projects". It is acknowledged all over the world that the private sector has the ability to mobilize resources well and is able to use limited resources efficiently and effectively (Skietrys et al., 2008). It is always the aim of every investor to minimize project cost and maximize revenue thereby managing available resources well and use them effectively to achieve its goal (Askar& Gab-Allah, 2002), this is in no doubt why private investors possess such efficiency in project delivery. Moreover, road construction involves huge investment and many public agencies and departments lack the ability to raise funds for large-scale infrastructure projects (Walker et al., 1995). Therefore involving the private sector through PPP help lessen such shortfalls. This result is consistent with a study by Osei-Kyei, Dansoh, and Ofori-Kuragu (2014). The final most important reason perceived by respondents for using PPP in road construction is "Facilitate creative and innovative approaches". There has been evidence that by using PPP, the public can enjoy better quality services because PPP encourages the private sectors to be innovative and creative in delivering the projects (Grimsey and Graham, 1997; Treasury Taskforce, 1997). According to Kaliannan, Awang and Raman (2010), the private sector is perceived as being more innovative and efficient because it operates in a competitive commercial environment where there are incentives and rewards for meeting the needs of the customers (Kaliannan, Awang, and Raman, 2010). This result is similar to that of Ismail (2013).

Differences in the perceptions of the state-owned road agencies and private sectors' respondents on the importance of the reasons
In terms of the differences on the perceived importance of each reason by the SRA and PS, based on the mean score rankings, the results of the two parties are almost similar except for differences in the ranking for several reasons. Table 3 shows that some reasons were perceived to be more important by the SRA respondents than by the PS respondents, whereas some were perceived to be more important by the PS than by the SRA. In further examining the differences in the perceptions of the public and private sectors concerning the importance of each of the twenty-two reasons, an independent ttest was conducted. Table 4 reveals the independent sample t-test of responses with respect to hypothesis testing.
Based on the results shown in Table 4, the findings show that out of the twenty-two reasons there is no significant difference in the perceptions of the SRA and PS except in the cases of six reasons: "Shortage of government funding", "Public monopoly and lack of competition", "Enhances technology transfer to the local enterprise", "Reduces public sector administration cost", "Increases access to the public sector market" and "Reduces the problem of public sector budget restraint" which show a statistically significant difference at the 5% significance level. The result is in line with Osei-Kyei, The public sector respondents perceived three reasons "Enhances technology transfer to the local enterprise", "Reduces public sector administration cost", and "Reduces the problem of public sector budget restraint" as significantly more important than the private sector respondents. Similarly, the private sector respondents also perceived three reasons "Shortage of government funding", "public monopoly and lack of competition", and "Increases access to the public sector market" as significantly more important than the public sector respondents.

Conclusion
The study adopted in-depth interview to examine the relevance of the identified reasons in the Ghanaian context. A questionnaire survey was subsequently used to examine the reasons for implementing PPP in road construction in Ghana.
Besides, this paper assessed the differences in the perception of the SRA and the PS, in terms of each attractive factor. The general results show that "Shortage of government funding", "Political pressure", "Economic development pressure of demanding more facilities", "accelerate project development", "Allows for shared risk", "Ability to raise funds for project by private sector", and "Facilitate creative and innovative approaches" are the seven most important reasons for implementing PPP in road construction in Ghana. In terms of the differences in perception between the SRA and PS groups, the hypothesis test results indicated that there are significant differences for only a few reasons for implementing PPP.
The results of the top reasons for PPP adoption in road construction in Ghana are significant to the various PPP stakeholders, particularly the government, who introduce the policy and the private sector companies, who take significant responsibilities in carrying out projects via PPP. PPP is perceived as an attractive initiative because it requires private sector companies to form a special purpose vehicle (SPV) that comprises few companies with different expertise to jointly undertake a long term government project. To emphasise the need to form an SPV that comprises various private companies, in evaluating the tender for PPP, the government may consider assessing the credibility of each company that forms the SPV rather than only assess the construction company that will lead the PPP project. This leads to a greater possibility of a PPP project to succeed because all of the private companies that form the SPV are in a position to play appropriate roles throughout the PPP contract.
The differences in perception between the private and public sector respondents for several reasons for implementing PPP, which the public sector respondents perceived as being more important than the private sector respondents and vice versa, imply that the SRA and PS companies in Ghana have divergent views about the desirability of PPP procurement, which may ultimately lead to some challenges in implementing PPP in road construction. In ensuring that the objectives of adopting PPP in road construction are achieved, it is vital that both parties have an equal priority towards PPP implementation.
There are some limitations to this study. First, the use of a case study approach may enrich the findings and lead to the triangulation of evidence on the reasons for PPP implementation in road construction in Ghana. Second, this study only evaluated the reasons for adopting PPP in road construction in Ghana. Although this is important, it is also crucial to both the government and private sectors to have information on the factors that hinder the adoption of PPP in road construction.
Hence, future studies may want to extend this study by also looking at this neglected issue. Despite its limitations, this study offers some insights and useful information for the SRA and private sector providers concerning the important reasons for implementing PPP in road construction in Ghana.