Impact of transparency law on the post-award development phase of Toll and Annuity PPPs

Abstract

PurposeInvolvement of lenders for PPP highway projects in India starts after the bid award. The post-award development phase of Toll and Annuity PPPs differ significantly in terms of potential risk assumed by lenders. This study aims to assess the impact of the transparency law on the post-award development phase of Toll and Annuity PPPs.Design/methodology/approachA unique dataset of 469 PPP highway projects implemented in India was used to conduct this empirical study. An OLS regression model was developed to assess the impact of the transparency law on the post-award development phase.FindingsEnacting the transparency law increased the duration of the post-award development phase of Toll projects; however, its impact on Annuity projects was not significant. Moreover, Toll and Annuity projects with a longer post-award development phase had a shorter construction phase. The post-award development phase of the Toll projects was relatively more sensitive to technical, economic and location-specific variables than Annuity projects. Length of road stretch, duration of the concession period and individual income of end-users significantly impacted the duration of this phase of Toll projects.Practical implicationsTransparency law can improve risk mitigation of Toll projects during the post-award development phase.Originality/valueThe impact of transparency law on PPP projects has never been assessed. This study assesses its impact on the two forms of PPPs. It also highlights the determinants of this phase and how they differ for the two forms of PPPs.