International Journal of Construction Management

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Critical success factors (CSFs) of public–private

partnership (PPP) road projects in Ethiopia

Getachew Yilma Debela

To cite this article: Getachew Yilma Debela (2019): Critical success factors (CSFs) of
public–private partnership (PPP) road projects in Ethiopia, International Journal of Construction
Management, DOI: 10.1080/15623599.2019.1634667

To link to this article: https://doi.org/10.1080/15623599.2019.1634667

Published online: 28 Jun 2019.

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INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT
https://doi.org/10.1080/15623599.2019.1634667

Critical success factors (CSFs) of public–private partnership (PPP) road

projects in Ethiopia
Getachew Yilma Debela
Department of Civil Engineering, School of Engineering, University of Birmingham, Birmingham, UK

ABSTRACT KEYWORDS
The Ethiopian road sector is entirely dominated by the public-sector investment. The procure- Ethiopia; procurement;
ment method used in the sector is mainly traditional methods. However, the road sector has public sector; private sector;
been characterized by cost and time overruns and quality concerns. On the other hand, public–- partnerships; road
infrastructure; critical
private partnership (PPP) has become increasingly popular among governments as alternative success factors
procurement method than the traditional public-sector financing. The current government of
Ethiopia has also understood the need for mobilizing resources from different sources in order
to meet the growing demand for public infrastructure. Nonetheless, rushing to implement PPP
projects without careful study of enabling environment may end up with projects being termi-
nated in later stages. Therefore, this research examined the critical success factors of PPP road
projects in Ethiopia. Both qualitative and quantitative research methods were employed. The
findings revealed that for effective implementation of PPP road projects in Ethiopia, the govern-
ment should ensure at least the presence of an enabling specific PPP policy, well organized and
committed public agency, stable political and social environment, favourable legal frameworks
and good governance. It is also recommended that the PPP procurement process indicated in
the PPP proclamation should be properly regulated with sector specific laws, guidelines, stand-
ard bidding documents and contract models for PPP road projects.

Introduction implementation of traditional procurement methods

The government of Ethiopia has put high priority to
improving the road infrastructure since the inaugur-
ation of the Road Sector Development Programs
(RSDP) in 1997. Since the commencement of the
RSDP, the total expenditure from the public financing
was ETB 266.2 billion (USD 17.4 billion) (ERA 2016).
However, many of the projects executed under the
RSDP were not being completed within the prescribed
time and budget and did not meet the quality stand-
ards (Demissie 2006). In addition to that the scaling
up efforts have been partly constrained by the lack of
financial resources compounded by the difficulty in
mobilizing domestic resources and the uncertainty
about global foreign aid inflows (UNDP 2012). The
funding gap in infrastructure is not only due to lack
of revenue, but also a consequence of inefficiencies in
public spending resulting from poor governance, poor
investment planning, under-investment in mainten-
ance and high operating costs (UNDP 2015).
In order to advance the rapid economic growth
and to alleviate the problems encountered in the
in the road sector, the government has planned to use
public–private partnership (PPP) as an alternative
mode of funding of road infrastructure in Ethiopia.
PPP is a long-term contractual arrangement between
the public and the private contractor for the delivery
of public services whereby the private partner assumes
substantial risks equivalent to the payment agreed in
the contract (World Bank 2014). If properly formu-
lated and managed, PPP can provide a number of
benefits to the public sector such as: alleviating the
financial burden on the public sector due to rising
infrastructure development costs; facilitate risks to be
transferred from the public to the private sector and
enhance the value for money expended in infrastruc-
ture development (Kwak et al. 2009). Nevertheless,
there is little experience in setting up and administer-
ing PPP schemes in Ethiopia. According to Zhang
(2004), one of the critical steps in the development of
PPP is to identify, analyze, and categorize various fac-
tors that are critical for its success. Therefore, this
research is designed to investigate the critical success

CONTACT Getachew Yilma Debela GYD681@bham.ac.uk

ß 2019 Informa UK Limited, trading as Taylor & Francis Group
2 G. Y. DEBELA
factors (CSFs) of PPP implementation in the
Ethiopian road sector.
Background to PPP in Ethiopia
Concessional arrangement for infrastructure develop-
ment in Ethiopia dates back to the nineteenth century
when Emperor Menelik granted to his Swiss adviser,
Alfred IIg, to establish a company to build and oper-
ate a railway from Djibouti through Harar and Entoto
to the White Nile on 9 March 1894 (Pankhurst 2017).
After passing many challenges from regional colonial
powers, design changes and financial constraints, the
railway construction reached Addis Ababa in 1917.
The completion of the railway was an event of con-
siderable socio-economic significance for Ethiopia
opening the country to international markets
(Zewde 2002).
Ethiopia had also formulated a legal instrument to
use the private-sector investment through concession
since 1960 under its administrative law, though the
practice in infrastructure development has been hin-
dered due to different political and economic reasons
(Code 1960). Nonetheless, in recent development, the
power sector has attracted independent power pro-
ducers (IPP). Among these IPP, Corbetti Geothermal
plc and the Ethiopian government signed an imple-
mentation agreement (IA) and a power purchase
agreement (PPA) to develop geothermal power in
December 2017. This agreement marked a major step
in the development of privately financed power gener-
ation in Ethiopia. According to the agreement
between the parties, the special purpose vehicle com-
pany, Corbetti Geothermal Plc, will construct
1,000 MW geothermal power plants with an estimated
cost of USD 4 billion. The electric power generated
will be sold to the Ethiopian government national
grid with an agreed rate (Corbetti 2017).
Encouraged with these recent developments, the
Ethiopian government understood the need for mobi-
lizing resources from different sources other than the
traditional government financing of infrastructure in
order to meet the growing demand for public services.
To address this issue, in late August 2017 the govern-
ment established a PPP framework and PPP Unit
within the Ministry of Finance.
Literature review
A systematic review of published literature can pro-
vide a thorough way of finding relevant, high-quality
studies and incorporating their findings can give a
comprehensive representation (Gough et al. 2013). In
this respect, a systematic literature review was under-
taken. The purpose of this review was to identify the
CSFs of PPP in infrastructure projects in developing
countries. By addressing those factors, the research
investigated whether those factors exist in Ethiopia or
not via a structured questionnaire survey.
Methods of systematic literature review
In order to properly review and analyze the findings
of previous research studies of a particular topic, a
methodical analysis of publications in academic jour-
nals is necessary (Tsai and Wen 2005). In this respect,
a similar three-stage search process adopted by Osei-
Kyei and Chan (2015) and Zhang et al. (2016) was
employed to conduct a content analysis of the success
factors of PPP related papers in developing countries.
The three stages are the identification of academic
journals, selection of target papers and examination
of the target papers. Subsequently, the literature
search result from the above achieved to collect 710
journal papers related with infrastructure projects for
further scrutiny. The lists of publications were
obtained by using search engines namely,
Google.com, Googlescholar.com, Research gate, Civil
Engineering Abstracts (ProQuest), Engineering
Village, Scopus, Emerald insight, Science direct and
University of Birmingham Library website. The flow
chart of the systematic review is shown in Figure 1.
Selection of relevant papers
The literature selection process was conducted in
three stages. At the initial stage, a quick review on the
collected journals was conducted. Papers addressed to
PPP of other areas like health and social services were
removed. As a result, 265 initial qualified journal
papers were identified.
In the second stage, the papers retrieved in the first
stage were subjected to content analysis technique to
examine and analyze their relevance to the research
objective by using the inclusion/exclusion criteria
listed below. At this stage, the number of papers
qualified was 29 Journals.

Language in English;

Geographical location – developing countries;

Date of publication – since 1990;

Infrastructure projects;

Conceptual, qualitative, quantitative and empir-
ical nature;

CSFs of PPP in infrastructure development
Identification
710 journals retrieved
265 articles
Screening
Apply inclusion/exclusion criteria
Eligibility
29 articles
Detail study of selected articles
Inclusion
12 articles
Identify CSFs
Figure 1. Flow chart of systematic review process.

Scholarly publications (journals);

PPP; and

CSFs of PPP.
Finally, a comprehensive and in-depth review of
the qualified journal papers was conducted to identify
publication date, research methods, research topics
and findings, and nature of projects studied by
researchers. At this stage, additional 17 papers were
abandoned, due to irrelevance to the current research
or low quality (similarity of the research content,
non-rigorous research process, etc.). The number of
final valid research papers was reduced to 12 journal
papers focusing in developing countries only. The
final number of selected publications from the target
search is presented in Table 1.
Selected CSFs of PPP in developing countries
Based on the analysis of the selected journals, the
CSFs for PPP implementation indicated in Table 2
was identified for the design of questionnaire. In this
regard, a total of twenty six perceived success factors
were shortlisted and they were considered relevant for
developing countries.
Given that it is not possible to include all success
factors reported by previous researchers because of
the focus and objective of this research, the twenty six
factors were carefully reviewed and selected to cover
key issues that affect governments and private-sector
participants in PPP projects. Since these factors had
INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT 3
Apply key words
Quick review on the study
Content analysis
Comprehensive review
been sufficiently tested and used in similar studies in
other developing countries, they are also used as basis
for the present study.
Research methodology
Data collection
Representative participants with adequate experience
of the Ethiopian government policies and regulation
towards public procurement were targeted. The com-
plete questionnaire comprised of respondents’ profes-
sional background and list of PPP CSFs. Prior to its
use, a peer review of the questionnaire was conducted
in the University of Birmingham by way of a trial run
for checking the wording, identifying ambiguous
questions and testing the technique that may be used
to collect the data (Naoum 2013). The survey was
conducted among relevant government organizations,
ministries, development partners and private practi-
tioners (contractors and consultants) in various disci-
plines in Ethiopia.
Population of the study
The sample of the survey respondents were selected
based on expert sampling method from the target
population of the public, private and development
partners working in the Ethiopian road sector to get
reliable information. The advantage of this approach
is that targeting professionals in the subject area of
study gives the opportunity to collect reliable
4 G. Y. DEBELA

Table 1. Author, title and country of origin.

No. Author
1 Esther Cheung, Albert P.C. Chan, Patrick T.I. Lam, Daniel W.M.
Chan, Yongjian Ke (2012)
2 Titus Ebenezer Kwofie, Samuel Afram, Edward Botchway (2016)
3 Ernest Effah Ameyaw, Albert P.C. Chan, De-Graft Owusu-
Manu (2017)
4 Xueqing Zhang (2004)
5 Baba Shehu Waziri & Yusuf Isa (2017)
6 Dahiru and Muhammad (2015)
7 Jui-Sheng Chou and Dinar Pramudawardhani (2015)
8 Hussein N. Ndonye, Dr. Emma Anyika, Prof. George
Gongera (2014)
9 Shakil S. Malek and Dr. P. V. Akalkotkar (2016)
10 Alis Kahwajian , Shukri Baba , Omar Amudi and Mohammed
Wanos (2014)
11 Robert Osei-Kyei & Albert P.C Chan (2016)
12 Henry Alinaitwe and Robert Ayesiga (2013)
Title Country
A Comparative Study of Critical Success Factors for Public Private China
Partnerships (PPP) between Mainland China and the Hong
Kong Special Administrative Region
A Critical Success Model for PPP Public Housing Delivery Ghana
in Ghana
A Survey of Critical Success Factors for Attracting Private Sector Developing
Participation in Water Supply Projects in Developing Countries countries
Critical Success Factors for Public–Private Partnerships in China
Infrastructure Development
Critical Success Factors for the Implementation of Build-Operate- Nigeria
Transfer (BOT) Projects for Infrastructure Development
in Nigeria
Critical Success Factors of Public–Private Partnership Projects Nigeria
in Nigeria
Cross-Country Comparisons of Key Drivers, Critical Success Factors Indonesia
and Risk Allocation for Public–Private Partnership Projects
Evaluation of Public Private Partnership Strategies on Concession Kenya
Performance: Case of Rift Valley Railways Concession, Kenya
Factors Contributing to Successful Public Private Partnership India
Projects for Highway Projects in Indian Context
Identification of Critical Success Factors (CSFs) for Public Private Syria
Partnership (PPP) Construction Projects in Syria
Implementing Public–Private Partnership (PPP) Policy for Public Ghana
Construction Projects in Ghana: Critical Success Factors and
Policy Implications
Success Factors for the Implementation of Public–Private Uganda
Partnerships in the Construction Industry in Uganda

Table 2. Identified critical success factors of PPP in develop- large infrastructure projects; or (iii) they have served
ing countries. as senior experts or managerial position in their
No. PPP success factors respective area of specialization. The researcher aimed
1 Well organized and committed public agency
2 Transparent procurement process
to ensure that the sample for the study was represen-
3 Competitive procurement process tative of the public sector, private sector and the
4 Political support
5 Positive attitude towards PPP project implementation
development partners’ perspective. As such, the target
6 Government involvement by providing guarantees experts consisted of respondents drawn from various
7 Good governance
8 Presence of an enabling PPP policy
groups as listed below.
9 Strong private consortia
10 Sound economic policy
The World Bank Ethiopian Country Office;
11 Thorough and realistic assessment of the costs and benefits
12 Appropriate risk allocation and sharing
African Development Bank Ethiopian Office;
13 Favourable legal frameworks
PPP Unit - Ministry of Finance and Economic
14 Stable macro-economic environment
15 A streamlined, transparent and clear project appraisal policy Cooperation of Ethiopia (under formulation);
16 Presence of a pro-investment culture among the population in
Federal Integrated Infrastructure Development and
the country
17 Project technical feasibility Coordinating Agency;
18 A strong monitoring and evaluation system for project implementation
Planning Commission of Ethiopia;
19 Technology transfer
20 General knowledge about existence and working of PPPs
Ethiopian Roads Authority Senior Officials;
21 Stable Political and social environment
Addis Ababa City Roads Authority
22 Mature and available financial market
23 Dedicated PPP unit to support and promote PPP program
Senior Officials;
24 Public/community support
International Contractors and Consultants working
25 Shared authority between public and private sectors
26 Multi-benefit objectives of all stakeholders
in Ethiopia; and

Local Contractors and Consultants.

information than involving both experts and non-

experts in the area of study (Bhattacherjee 2012).
The respondents were identified based on three
main criteria; (i) they must possess adequate know-
ledge in the area of the Ethiopian government policies
and regulations of infrastructure development; (ii)
they have involved very closely in the procurement of
Data analysis techniques
Quantitative and qualitative research methods are the
two major types of research strategies for data ana-
lysis. The research area and the availability of data
mainly dictate the type of research method to follow
(Naoum 2013). According to Naoum (2013),
 INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT 5

quantitative research measures a problem in numbers
based on a theory composed of variables objectively.
But, qualitative research underlines meanings, experi-
ences and descriptions to subjectively evaluate the
opinion, view or perception of respondents towards a
particular issue. In this study both qualitative and
quantitative research methods were employed for
data analysis.
The data collected was analyzed using the
Statistical Package for Social Science (SPSS).
Therefore, the techniques that were used in this
research study include the Mean Score Ranking
Technique, t-Test, Reliability Test and Kendall’s
Concordance Analysis. Moreover, the Relative
Importance Index (RII) was also used to categorize
the ranked factors into three grouping of low,
medium and high as shown in Table 3.
Data analysis
Demographic information
In total, 85 questionnaires were distributed to selected
participants in the Ethiopian road sector in various
field of assignment from December 2017 to March
2018. Out of the total target population of 85 experts,
the survey was able to collect data from 53 respond-
ents. However, one respondent was excluded from the
analysis as it was considered to show insufficient
understanding of the questions. Hence, there were a
total of 52 usable questionnaires representing a
response rate of 61%. Considering no PPP road proj-
ects and the limited number of potential PPP experts
in Ethiopia, 52 responses were considered acceptable
the private sector in the Ethiopian road sector where
the research study was concentrated.
Table 5 shows wide spread specialization of the
questionnaire respondents that can enable to collect
valuable opinions to answer the research objectives.
Among the total respondents the majority of the
respondents were road consultants and contractors
with 34% and 22%, respectively. Procurement
Specialist and Directors comprised each 10% of the
experts, respectively. Though the other experts have
experience in other methods of infrastructure pro-
curement, only 6% of the respondents were PPP
experts. This result demonstrates the lack of PPP
experts in the Ethiopian road sector.
Reliability test
The internal consistency of the measurement instru-
ment used in the questionnaire was checked by means
of Cronbach’s alpha coefficient. The overall
Cronbach’s alpha reliability for the 26 CSFs was com-
puted to be 0.930, signifying a good internal reliability
and consistency of the data set.
Ranking of CSFs of PPP road projects in Ethiopia
Table 6 summarizes the output of the data analysis of
the questionnaire survey. Out of the 26 factors, 16
factors were statistically significant CSFs for the
proper implementation of PPP road projects in
Ethiopia (mean >4, t-test values positive, p < 0.05 and
Table 4. Distribution of respondents.
Frequency
of response

for this analysis. By sector Target Actual Percentage (%)

As illustrated in Table 4, majority of the respond- Public sector 20 11 21%
Private sector 50 33 64%
ents, 33 (64%), engaged in the private sector including Development partners 15 8 15%
consultants and contractors, 11 (21%) engaged in the Total 85 52 100%

public sector, and 8 (15%) are from development

partners (the World Bank and the African Table 5. Specialization of respondents.
Development Bank). 14 (27%) of respondents were Primary role Frequency Percentage
PPP expert 3 6
foreign citizens working in the Ethiopian road sector Procurement specialist 5 10
in various areas of expertise. Majority of the respond- Director 5 10
Road contractor 12 22
ents were experts from the private sector comprising Transport economist 2 4
contractors and consultants (64%). This result was Financial advisor 1 2
Road consultant 18 34
expected since many professionals are employed in Project manager 1 2
Transport engineer 2 4
Table 3. Scoring the levels of the importance of factors. Macro-economic research and 1 2
modelling expert
Average score RAI Importance level Development plan implementation 1 2
4.0 to 5.0 0.8 to 1.0 High (H) research and evaluation expert
3.0 to < 4.0 0.6 to < 0.8 Medium (M) Macro plan preparation, monitoring 1 2
1.0 to < 3.0 0.2 to < 0.6 Low (L) and evaluation team leader
Source: Adapted from Chileshe and Kikwasi (2014). Total 52 100
6 G. Y. DEBELA

Table 6. Overall ranking critical success factors of PPP road projects.

Level
t-Test Sig. (one- Std. of
CSFs Mean (m ¼ 3.5) tailed) deviation RAI Rank criticality
Presence of an enabling PPP policy 4.52 8.875 0.000 .828 0.90 1 H
Well-organized and committed public agency 4.48 7.531 0.000 .939 0.90 2 H
Stable political and social environment 4.44 7.996 0.000 .850 0.89 3 H
Favourable legal frameworks 4.29 5.595 0.000 1.016 0.86 4 H
Good governance 4.29 5.943 0.000 .957 0.86 5 H
Appropriate risk allocation and sharing 4.25 6.648 0.000 .813 0.85 6 H
Transparent procurement process 4.23 5.861 0.000 .899 0.85 7 H
Thorough and realistic assessment of the costs and benefits 4.15 4.392 0.000 1.073 0.83 8 H
Adequate knowledge and skills of PPP 4.12 5.333 0.000 .832 0.82 9 H
Competitive procurement process 4.10 4.236 0.000 1.015 0.82 10 H
A strong monitoring and evaluation system for project implementation 4.08 4.601 0.000 .904 0.82 11 H
Project technical feasibility 4.06 4.290 0.000 .938 0.81 12 H
Stable macro-economic environment 4.04 4.006 0.000 .969 0.81 13 H
Government involvement by providing guarantees 4.04 3.848 0.000 1.009 0.81 14 H
Political support 4.04 3.524 0.001 1.102 0.81 15 H
Sound economic policy 4.02 4.397 0.000 .852 0.80 16 H
Mature and available financial market 3.94 3.076 0.002 1.037 0.79 17 M
Multi-benefit objectives (public sector and private sector) 3.92 3.374 0.001 .904 0.78 18 M
Positive attitude towards PPP project implementation 3.83 2.554 0.007 .923 0.77 19 M
A streamlined, transparent and clear project appraisal policy 3.83 2.347 0.012 1.004 0.77 20 M
Dedicated PPP unit to support and promote PPP program 3.79 2.223 0.016 .936 0.76 21 M
Strong private consortia(joint venture of companies) 3.77 1.900 0.032 1.022 0.75 22 M
Willingness among parties to share authority 3.71 1.595 0.059 .957 0.74 23 M
Public/community support 3.71 1.630 0.055 .936 0.74 24 M
Technology Transfer 3.56 .465 0.322 .895 0.71 25 M
Presence of a pro-investment culture among the population in the country 3.46 –.289 0.387 .959 0.69 26 M
Note: Results are significant at 95% level (p < 0.05); degree of freedom (df) ¼ 51.
Mean score based on total respondents, N ¼ 52.
RAI, relative agreement index.

relative importance indices – high). These factors
were: (1) Presence of an enabling PPP policy, (2)
Well organized and committed public agency, (3)
Stable Political and social environment, (4)
Favourable legal frameworks, (5) Good governance,(6)
Appropriate risk allocation and sharing, (7)
Transparent procurement process, (8) Thorough and
realistic assessment of the costs and benefits,(9)
Adequate knowledge and skills of PPP, (10)
Competitive procurement process, (11) A strong
monitoring and evaluation system for project imple-
mentation, (12) Project technical feasibility, (13)
Stable macro-economic environment, (14)
Government involvement by providing guarantees,
(15) Political support, (16) Sound economic policy.
Six CSFs were ranked from seventeen to twenty
two with mean values greater that 3.5 (mean score
values between 3.5 and 4, t-test values positive,
p < 0.05 and relative importance indices–medium).
These CSFs were (17) Mature and available financial
market, (18) Multi-benefit objectives (public sector
and private sector), (19) Positive attitude towards PPP
project implementation, (20) A streamlined, transpar-
ent and clear project appraisal policy, (21) Dedicated
PPP unit to support and promote PPP program, (22)
Strong private consortia (joint venture of companies).
The least ranked four CSFs namely: (23)
Willingness among parties to share authority, (24)
Public/community support, (25) Technology Transfer,
(26) Presence of a pro-investment culture among the
population in the country were not considered statis-
tically significant (p > 0.05). Among these four factors,
the t-test value of only one of them namely; ‘Presence
of a pro-investment culture among the population in
the country’ was negative.
Subsequently, the top ten ranked CSFs for the
implementation of PPP road projects in Ethiopia were
discussed in detail.
The first highest ranked by all respondents was
‘Presence of an enabling PPP policy’, which therefore
was considered as an extremely influential factor in
Ethiopia. This finding has implied that the respond-
ents were highly concerned about the importance of
presenting enabling PPP policy in Ethiopia. The inter-
national experience on development of PPP also
shows that Establishing PPP enabling policy scruti-
nized with clear national development policy specify-
ing the objectives of the private-sector participation in
infrastructure is well tested initial step for the success
of PPP implementation (AfDB 2016). The presence of
an enabling PPP policy is also regarded as a political
and legislative factor empowering the public sector to
allow the private sector to invest in PPP infrastructure
(Geroniks and Lejnieks 2015). Coinciding with this
finding, the Ethiopian government enacted PPP policy
and regulation under Proclamation No.1076/2016 in

February 2018. Though this could be taken as a good
start to initiate PPP projects in Ethiopia, other ena-
bling implementation frameworks including regula-
tions and directives need to be issued subsequently.
‘Well organized and committed public agency’ was
ranked second by overall respondents. Lack of
strength in the public agencies signals uncertainties in
the quality of the regulations for PPP implementation
resulting in the decrease of incentives to the private
sector to participate in infrastructure due to perceived
high country risks (Hammami et al. 2006). PPP proj-
ects also require strong public-sector evaluation and
prompt decision-making capacity that can be achieved
by instituting a specialist organization to support gov-
ernment offices to enhance the effectiveness of PPP
implementation (Cuttaree and Perrott 2011). In this
respect, a PPP unit with relevant financial, technical,
commercial and legal skills can help to ensure consist-
ency and credibility which in turn send a powerful
signal to the private sector about the public sector’s
competence and seriousness of intent (PPIAF 2009).
In addition to that other implementing government
agencies capacity to create, manage and evaluate PPP
projects is also an essential instrument for the suc-
cessful delivery of important public infrastructure
(Jomo et al. 2016).
The third-ranked factor was ‘Stable political and
social environment’. Instability in political and social
environment due to political changes and frequent
policy alterations may result in PPP project termin-
ation, poor governance, insecurity and lack of trans-
parency and accountability of the government
(Dahiru and Muhammad 2015). Stable political and
social environment also affects several other factors
including regulatory and macro-economic environ-
ments (Sharma 2012). Ensuring strong legal and polit-
ical support by governments before embarking PPP
projects protect the interest of the private sector and
maintain the sustainability of the infrastructure devel-
opment when there is a government change after the
PPP contract has become operation (Wibowo and
Alfen 2015).
The fourth-ranked factor by all respondents was
‘Favourable legal frameworks’. A comprehensive legis-
lative framework is a major determinant factor
favourable to attract private-sector investment in PPP
projects by ensuring the government’s commitment,
transparency, predictability and rationality (World
Bank 2014). Government needs to install the confi-
dence of the private sector prior to the commence-
ment of the PPP programme by avoiding unnecessary
legal restriction on the private-sector involvement by
INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT 7
establishing a favourable legal instrument (Li et al.
2005c). A sound regulatory framework also enhances
the benefits to the government by guaranteeing that
essential partnership operates efficiently according to
its policy objective (Pongsiri 2002).
The fifth ranked factor by all participants was
‘Good governance’. The United Nations Economic
Commission for Europe (UNECE) Guidebook on
Promoting Good Governance in PPP defines govern-
ance as the processes in government actions and how
things are done. UNECE describes good governance
as encompassing six core principles: efficiency;
accountability; transparency; decency; fairness and
participation. Thus good governance relates to the
interaction between government institutions internally
and their communication with the private sector,
users and citizens (OECD 2015). This can only be
realized by providing sound economic policies and
administrative platform that attract private sector to
participate in public projects (Li et al. 2005c). Good
governance in this case requires competitively select-
ing the strategic private investor, properly disclosing
relevant information to the public, and having a regu-
latory entity to oversee the contractual agreements
over the life of the concession (Queiroz and Izaguirre
2008). However, the lack of government capacity and
incorrect interference to manage PPP projects as a
reflection of lack of good governance may lead to
project failure (Kwak et al. 2009). Furthermore, a lack
of good governance for infrastructure projects often
result in cost overruns, delays, underperformance,
underutilization, accelerated deterioration due to poor
maintenance and corruption (OECD 2015).
‘Appropriate risk allocation and sharing’ was
ranked at sixth position by overall respondents.
According to Kwak et al. (2009), the prominent char-
acteristic of PPP infrastructure is its high level of risks
due to the long-term concession period and the
multiplicity of participants involved in the partner-
ship. Appropriate risk allocation in PPP projects
result in reduction of individual risk premiums and
ultimately the overall cost of the project as the party
in the best position to manage a particular risk opt to
perform with the lowest price (Li et al. 2005c). In the
contrary, if we try to transfer to the private-sector
risks beyond his capacity to manage and control, the
value for money accrues to the public sector tends to
reduce (Hodge and Greve 2005). To this effect, when
pricing for risks the probability of the risks manifest-
ing and its likely effect on costs and revenues is well
considered while bidding for PPP projects by the pri-
vate sector.
8 G. Y. DEBELA

‘Transparent procurement process’ and
‘Competitive procurement process’ was ranked sev-
enth and tenth by all respondents, respectively.
Establishing practical procurement framework for
appropriate selection of the private participant in PPP
projects significantly increase the success rate of PPP
implementation (Kwak et al. 2009). To this effect, an
effective procurement process must demonstrate
transparency and be competitive throughout the
whole PPP procurement process (Cheung 2012). A
transparent and efficient procurement process is also
essential in decreasing the transaction costs and limit-
ing the time in negotiation to expedite the PPP finan-
cial close (Chan et al. 2010). In certain situations,
without bypassing the procurement rules to select and
negotiate directly with concessionaires, allowing flexi-
bility in the procurement process can also accelerate
the financial close efficiently (Cuttaree and Perrott
2011). In the case of unsolicited proposals from the
private sector for PPP projects, it becomes controver-
sial if government negotiates directly with the original
proponent without sufficient transparency or compet-
ing proposals unless effective procurement system to
channel unsolicited proposals is established by gov-
ernment to incorporate transparency and competition
(Queiroz and Kerali 2010).
‘Thorough and realistic assessment of the costs and
benefits’ was ranked eighth by overall respondents. A
technical feasibility study assesses the details of how
one will deliver a product or service. Li et al. (2005c)
suggested that when considering PPP procurement
options, it is important to review the associated tech-
nical problems. In particular, the private contractor
needs to ensure that any engineering uncertainties are
resolved. The success of the PPP contract depends on
the accuracy of the technical feasibility process. A
thorough and realistic cost–benefit analysis forms part
of the evaluation process. It is also important to note
that PPP would not be considered as a preferred
option if the contract requirements and technologies
continuously change during the concession period of
the project, unless sufficient flexibility is embedded
into the contract to facilitate such changes (Ng
et al. 2010).
‘Adequate knowledge and skills of PPP’ was ranked
ninth by all participants. Effective PPP implementa-
tion require that government offices and mainly PPP
unit to acquire strong competencies in various fields
of expertise including specific infrastructure technical
knowledge, PPP financing, risk analysis, procurement,
negotiation and contract management (AfDB 2016)
(AfDB, 2016). Moreover, skills in the areas of ability
to consult with stakeholders, develop public awareness
programs, market PPP programs locally and inter-
nationally and identify credit enhancement opportuni-
ties are also prudent to realize PPP projects.
Comparison between Ethiopia and other developing
countries in terms of top five CSFs
The results of the analysis were also compared with
similar studies those reported in Uganda (Alinaitwe
and Ayesiga 2013), Nigeria (Dahiru and Muhammad
2015), Indonesia (Chou and Pramudawardhani 2015),
Ghana (Kwofie et al. 2016) and China (Cheung 2012).
Table 7 shows the top five CSFs of the Ethiopian
road sector PPP implementation compared to other
selected five developing countries (Uganda, Nigeria,
Indonesia, Ghana and China).

Table 7. Comparison of CSFs between Ethiopia and other developing countries.

Top five CSFs
No. in Ethiopia Uganda Nigeria Indonesia Ghana China
1 Presence of an Well-organized Good governance Favourable Government Favourable
enabling PPP policy public agency legal framework involvement by legal framework
providing
guarantee
2 Well-organized and Competent Protective policy Commitment and Right project Appropriate risk
committed procurement against political risk responsibility of identification and allocation and
public agency process public and project technical risk sharing
private sectors feasibility
3 Stable political and Project financial Appropriate risk Transparency in Competitive and Commitment and
social environment feasibility allocation & procurement transparent responsibility of
risk sharing process procurement public and
process private sectors
4 Favourable Committeemen of Strong Clearly defined Favourable and Stable macro-
legal frameworks all parties private consortium responsibilities efficient economic condition
and roles legal framework
5 Good governance A strong monitoring Effective Good governance/ Stable macro- Available
and evaluation political stability government economic condition financial market
system for projects support and sound
implemented economic policy

Table 8. Results of Kendall’s concordance analysis.
Parameter
Number of survey respondents
Kendall’s coefficient of concordance (W)
Chi-square value
Critical value of chi-square
Degree of freedom (df)
Asymptotic significance
Note: level of significance is at 0.05.
Table 9. Recommended actions on top ten CSFs for the Ethiopian road sector.
Rank Critical success factor
1 Presence of an enabling
PPP policy
2 Well organized and committed
public agency
3 Stable political and social
environment
4 Favourable legal frameworks
5 Good governance
6 Appropriate risk allocation
and sharing
7 Transparent procurement process
Draft directives, guidelines and bidding documents for PPP road projects procurement
8 Thorough and realistic
assessment of the costs
and benefits
9 Adequate knowledge and skills
of PPP
10 Competitive procurement process
Draft and disseminate standard bidding documents for PPP road projects procurement
INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT 9
Since all the countries compared with Ethiopia have
Overall respondents enabling PPP policies, the first ranked factor remains crit-
Value
ical only for Ethiopia. The second CSF ‘Well organized
52
0.131 and committed public agency’ was ranked first as ‘Well
170.528 organized public agency’ and fourth as ‘Committeemen
37.652
25
of all parties’ in Uganda. A related factor ‘Commitment
0.000 and responsibility of public and private sectors’ was
ranked in Indonesia and third in China.
Recommended action


In conformity with the general PPP policy and proclamation, develop a clear PPP strategy in development
policies to be communicated to stakeholders

Establish sector specific PPP implementation policy and strategy for the road sector

Develop a policy framework for domestic capital market to finance road infrastructure projects

Establish a PPP Unit within ERA to deal with solely with PPP road projects

PPP Director General and ERA need to develop capacity for procurement, implementation, regulation, and
monitoring of PPP road projects

Procure external skills and experience from competent PPP advisors

Buy the trust and support of the public for PPP road projects initiatives

Government should ensure the support for PPP road project development from the public through
awareness creation and education

Political leaders must show their support for PPP road projects development to attract more investors

Ensure to provide a high security priority and protection for the private-sector investment on PPP
road projects

Strengthen the capacity and authority of the PPP Unit to oversee all transactions of PPP road projects

Government should take the risk of social and political issues and ensure to compensate the private sector
for any insecurity in PPP contracts

Enact dispute resolution regulations for private financed infrastructure acceptable to foreign financers
and investors

Develop financial regulations to support private investors on PPP road projects

Develop a legal framework for land acquisition with the Federal and Regional governments for PPP road
project development by the private sector

Communicate to the private sector and other stakeholders the governance arrangements for PPP road
projects procurement

Prevent corruption throughout the concession period

Involve the public in decision-making throughout the procurement of road project through PPP

Ensure social acceptability and public affordability of road infrastructure through PPP

Provide serviceable road facilities to the public by employing enforceable contract for performance

Develop a mechanism to identify and analyze risks associated with PPP road projects

Assign risks to the party best placed to control them

Government should refrain from the idea of transferring of all PPP road project risks to the private partner

The government must retain risks beyond the control of the private sector

Develop a database for proper record and analysis of risks for PPP road projects

Ensure to provide detail information to all PPP bidders equally including the evaluation procedures at the
tendering stage

Make sure to minimize or avoid negotiations after the winning bidder is known

Disclose the information and reports to the public on the procurement of the PPP road project though
convenient media throughout the delivery of the project

Ensure that both the public and the private sector are transparent and open to the external stakeholders
and users

Conduct pre-feasibility study to prioritize PPP road projects

Conduct detail feasibility study to assess the applicability of the PPP modality against tradition procurement

Evaluate social, political and environmental impacts including financial, economic, legal and technical
viability of PPP road projects

Confirm that the private sector is able to develop the PPP road project under acceptable risks
Develop key technical skills for PPP road project in areas:
 The ability to consult with stakeholders
 Develop public awareness program
 Market PPP road programs locally and internationally
PPP Directorate General and ERA need to develop strong competencies in various field of expertise including:
 PPP road infrastructure technical knowledge
 PPP financing mechanisms
 PPP road projects risk analysis
 PPP road project procurement, negotiation and contract management

Develop clear project idea and client requirements in the bidding documents

Use competitive procurement to achieve innovation, efficiency and cost effectiveness

Prevent any government discretionary intervention on PPP tendering
10 G. Y. DEBELA
The third CSF in Ethiopia ‘Stable political and
social environment’ was ranked fifth in Nigeria
termed as ‘Effective political stability’. However, this
factor was not ranked as a top five factor for the
implementation of PPP projects in the remaining
countries. Many of the countries share the fourth CSF
‘Favourable legal frameworks’ with Ethiopia. This fac-
tor was ranked first in China and Indonesia, respect-
ively. In Ghana, this factor was ranked fourth
similarly with the Ethiopian case.
The fifth factor in Ethiopia ‘Good governance’ was
ranked the first top CSF in Nigeria; while it came in
the fifth place in Indonesia. In contrast, the factor
‘Government involvement by providing guarantee’
was ranked first in Ghana, but it was ranked four-
teenth by the respondents in Ethiopia. The findings
revealed that the CSFs of countries may not be identi-
cal and it depends on the political, social and eco-
nomic situations of each country. It also further
justifies the importance of the study in assisting policy
makers to have incitement to revisit the existing poli-
cies and regulations in Ethiopia.
Agreement of the survey respondents
Kendall’s coefficient of concordance (W) for the rank-
ings of the CSFs was 0.131 for all respondents as
shown in Table 8. The computed W value was signifi-
cant at 0.000. As the number of factors considered
(26) were above seven, the chi-square value would be
referred to rather than the W value. According to the
degree of freedom (26 – 1 ¼ 25) and the allowable
level of significance (5%), the critical value of chi-
square was 37.652 (Siegel and Castellan 1988). For
overall respondents, the computed chi-square value
was above the critical value (170.528). This result
indicates the null hypothesis that ‘Respondents’ sets
of rankings are different to each other’ has to be
rejected. Therefore, there is sufficient evidence to con-
clude that there is significant degree of consensus
among the 52 respondents about which factors are
critical to the successful implementation of PPP road
projects in Ethiopia.
Recommendations
Based on the findings of the literature review of CSFs
of PPP projects in developing countries and the ques-
tionnaire survey analysis, the subsequent recommen-
dations in Table 9 were suggested on top ten CSFs
for the Ethiopian road sector.
Conclusions
The main goal of this research was to identify the
CSFs of PPP infrastructure projects in Ethiopia
through a structured questionnaire survey. Thus, the
study has drawn the following conclusions.

From the analysis of CSFs of selected developing
countries, it can be inferred that though all CSFs
are important for effective implementation of PPP
projects, the relative importance of the success fac-
tors is specific to the country of consideration.

Similarly, it may be stated that PPP CSFs have
some dynamism through time even within a coun-
try which entails the requirement of regular check-
ing of their relative importance in due time.
Hence, studying of these factors in the context of
each country situation helps to take informed deci-
sion on reform of policies and regulatory regime.

Certain factors can contribute to the success of
PPP road projects and it is possible to rank their
relative importance according to the country situ-
ation. Mean score values of response data from
survey respondents was used to rank the relative
importance of a record of twenty six PPP CSFs in
the Ethiopia road sector. By understanding these
critical areas that require the most attention dur-
ing the planning and implementation process of
PPP road projects in Ethiopia, stakeholders must
focus on the following relatively important sixteen
factors in descending order:

Presence of an enabling PPP policy;

Well organized and committed public agency;

Stable political and social environment;

Favourable legal frameworks;

Good governance;

Appropriate risk allocation and sharing;

Transparent procurement process;

Thorough and realistic assessment of the costs
and benefits;

Adequate knowledge and skills of PPP;

Competitive procurement process;

A strong monitoring and evaluation system for
project implementation;

Project technical feasibility;

Stable macro-economic environment;

Government involvement by provid-
ing guarantees;

Political support; and

Sound economic policy.

Apart from the above, it is also important to con-
sider the contribution of the other factors for the
success of PPP road projects in Ethiopia due to

the fact that their mean score values were above
3.5 showing their relative significance. The ranking
of these remaining CSFs in descending order of
importance was: Mature and available financial
market; Multi-benefit objectives; Positive attitude
towards PPP project implementation; A stream-
lined, transparent and clear project appraisal pol-
icy; Dedicated PPP unit to support and promote
PPP program; Strong private consortia;
Willingness among parties to share authority;
Public/community support; and
Technology transfer.

It is worth noting that out of the total twenty six
CSFs ranked by all respondents, the mean score
values are above 3.5 for twenty five factors. These
findings revealed that these twenty five critical fac-
tors were perceived to be important for the devel-
opment of PPP road projects in Ethiopia. Only
one success factor namely; presence of a pro-
investment culture among the population in the
country (mean score ¼ 3.46) mean score value
was less than 3.5. From the foregoing points, it is
commendable to conclude that the public and the
private-sector prospective participants in PPP need
to give due consideration to these important CSFs
for the successful development of PPP road proj-
ects in Ethiopia.
Acknowledgements
This paper forms part of a research titled ‘Assessment of
Government Policies and Regulation in the Process of
Adopting Public Private Partnership Road Projects in
Ethiopia’. In the preparation of this study many have con-
tributed invaluable support. Sincere thanks go to the
experts at the Ethiopian Roads Authority for their willing-
ness to provide us with all necessary data so that the
research work could be carried out. We are also indebted
to those industrial professionals from the public sector, pri-
vate sector and development partners who kindly partici-
pated in the questionnaire survey.
Disclosure statement
No potential conflict of interest was reported by the author.
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