ABSTRACT
The purpose of this was to investigate the factors which influence Private Public Private (PPP) projects and specifically focused on the Nairobi Southern By-Pass (NSB) which is located in Nairobi Kenya. There is significant growth in the use of PPPs in the road sub-sector in Kenya. There is therefore a need to provide recommendations to ensure that PPPs are implemented successfully in order to avoid pitfalls. This will provide valuable information to county governments, public authorities, managers and contractors. The objectives of the study were: to establish the influence of procurement process on implementation of the Nairobi Southern Bypass (NSB) PPP road project in Nairobi County, Kenya; to assess the influence of route corridor availability on the implementation of NSB PPP road project in Nairobi County, Kenya; to examine the influence of politics on the implementation of NSB PPP road project in Nairobi County, Kenya and to determine the influence of budget on implementation of NSB PPP road project in Nairobi County, Kenya.
The study was a qualitative case study where primary data was collected through key informant interviews. Sampling was done using snowballing where 31 respondents were identified- these comprised of staff working at the specialized PPP unit and the department handling special projects within China Road and Bridge Corporation (CRBC) who was the contractor implementing the project and the Kenya National Highways Authority (KenNHA). To ensure the research instrument was reliable, the study conducted a pilot study which was composed of 6 respondents that were staff of the supervision consultant. The staff chosen for the pilot had previously been part of the intricacies in the NSB project right from procurement to construction. Analysis of the data was done using content and thematic analysis where the data was escribed in detail, interpreted and conclusions drawn. The findings of the study showed that procurement process influenced the commencement time, cost and alternatives in terms of design options for the NSB project. The study found out that while politics did not influence implementation of the project, budget considerations influenced implementation of the project as delays in disbursing funds either led to slowing down of works or additional costs in terms of accrued interest on delayed payments and contract prolongation costs. The major limitation of the study was that respondents especially from the Contractor were not willing to disclose full information citing business confidentiality as the main reason. In conclusion, the NSB PPP project was procured very fast and had a very fast turnaround time and could have been completed even faster had the route corridor been fully available and payments made promptly. The study recommends that implementing agencies should check thoroughly and consult with stakeholders on extent/scope of projects to avoid interference by politicians. The study further recommends that prior to commencing construction work, the route corridor should be fully available to the Contractor, free of encumbrances which could facilitate completion of the project within time and cost. The study also recommends that for faster turnaround time, implementation of such projects should only be done once all finances are in place. The study expects participants of PPP road projects in the future will find the findings of this study useful in order to maximize the rate of success when implementing similar PPP projects in addition to ensuring that resources that are invested in PPP programmes are efficiently and effectively used to have a greater overall project impact.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
An emerging popular approach to financing and execution of infrastructure development is the use of Public-Private Partnerships (PPPs). These are long-term agreements for cooperation that are arrived at between the private sector and public authorities. Over the previous four decades, the use of partnership in development and urban renewal has attracted a lot of discourse in different countries. Global bodies, notably the European Commission and the United Nations have persuaded countries and entities to adopt it as one of the instruments for urban development especially in nations which experience perennial budget deficits.
There is burgeoning evidence that cooperation between public and private sectors can yield many beneficial results. For instance, Fama and Jensen (1983) note that PPPs spread risks to entities or parties to a project that are capable of managing it properly at the minimum cost. This is also mainly done through risk optimization instead of maximizing the transfer of risk as a way of ensuring that the best possible value is realized. Laffont and Martimort (2002), argue that the allocation of risks in a project ought to incentivize the private sector to make improvements on its management systems and performance outcomes. Siemiatycki (2009) concluded the private sector is capable of generating additional revenue from third parties which contributes to cost-reducing of any required subvention in the private sector.
The growth in the use of PPPs by state governments around the world more particularly in countries that are still developing is attributable to a rise in pressure emerging from civil society organizations, citizens, and media. These pressures demand that governments must provide better and improved infrastructure services in different areas among them energy, transportation and communications. International non-state actors notably the United Nations’ (UN) Sustainable Development Goals (SDGs) have also contributed to this pressure on government. The goals monitor development and rate of progress closely and hold governments accountable on their efforts towards achieving the SDGs. Due to this confrontation of governments which are being constantly pressurized to provide better infrastructure, the use of PPPs is now viewed as a way of expediting development of critical infrastructure which could not otherwise be developed (U.S. Department of Transportation, 2015). The use of PPPs is also viewed to be a sustainable route to financing and has the capability to bridge the gap in infrastructure. This is regarded to be a critical way of development promotion (Agere, 2015).
According to Li et al. (2005), there has been a substantial increase private sector involvement in financing and development of public projects and services in developed nations. For instance, in the United States of America (USA) among other countries that are developed, numerous PPPs have been implemented successfully (Jefferies, 2012). The objectives of PPPs are different and include development of local economies, promotion of development of infrastructure, increasing efficiencies in construction and operations, cost reductions and finally service quality improvement through tapping private sector capital, expertise and knowledge (Yuan, 2013).
Upon their first launch in the USA, the federal government viewed them to be a primary way of reducing costs associated with infrastructure, cutting public expenditures, keeping the levels of investments made up and avoiding the constraints associated with limits in borrowing in the public sector (Li et al., 2005). However, the anticipated impact as a result of public borrowing has a much less significance than initially anticipated and that PPPs are now essential new ways of allocating risk in the development of public projects. According to Li et al. (2005), major significant factors that are associated with procurement procedures in PPPs include the significant amount of time that is spent making contract transactions, a lot of delays due to negotiation and costs of participation which are high.
Public-private partnership (PPP) which are also known as P3 or p3 typically refer to public services or projects, or business ventures in the private sector that are operated and funded through agreements between governments and entities in the private sector. PPPs are therefore contractual agreements made between public authorities and private sector players under which the private entities offer public projects or services and incurs significant technical, operational and financial risks in the project. In the PPP contract, government remains as a strategic controller of the project or service and obtains new infrastructure which upon expiry of the contract become government property, while the private party mitigates or manages the project risks (Rania, 2008).
According to ole Nkeri (2014), PPPs are innovative ways that are used by the public authorities to enter into agreements with private sector in order to tap into their ability to bring in capital and deliver projects based on financial and time constraints. The public sector is preserved the important duty of ensuring service provision that is beneficial to the public and improves their quality of life in addition to ensuring economic development. It is a contractual agreement made between a private party player and the government to provide assets and deliver essential services that are ordinarily delivered through the public sector. Through this, PPPs seek to finance facilities and public services through transferring risks to the private sector (Laffont & Martimort, 2002).
The Public Procurement and Disposal Regulations, (2009), describe a Public Private Partnership (PPP) as agreements made between government parastatals and ministries and a private sector player which are aimed at providing public services and projects on behalf of government or the entity making the procurement. The private player providing these services then receives compensation using public resources that are collected through the private investors from those using the public service or project. This is mainly through charging fees or commissions.
The utilization of PPPs is a popular method of ensuring that the private sector develops its capabilities through going into joint ventures with big international companies. This also provide opportunities for local companies to be sub-contracted in different areas such as management of facilities, electrical works, cleaning, security, civil works and maintenance. The use of PPPs is a method through which public enterprises and government to more participation from the private sector specifically through structuring PPPs in a way ensures skills are transferred which builds capacities for professionals who can later export their competencies through internationally bidding for contracts (Patrick, 2012). Further, through PPPs, the economy is pacified and made more competitive through the facilitation of infrastructure in addition to boosting industries and different businesses linked to infrastructure development. This also supplements the scarce public capacities to provide growing demands for the development of infrastructure.
The current study was premised on two key theories which was the agency theory and the resource dependency theory. According to the agency theory, there are divergences which occur when a principal and the agent are different when executing a project. The theory explained the subtleties that are integral to the relationships and behaviours between the parties that are delivering public-private partnerships when it comes to international development (ID) projects.
Conserve, the resource dependency theory gives an insight on the relationships within organizations and how these help to minimize uncertainty (Hillman, Withers & Collins, 2009). Barney (1991) observes that the concept of resources which includes all assets, capabilities, attributes of a firm, organizational processes, knowledge and information that is under the control of a firm that allows to both plan and execute strategies aimed at improving organizational efficiency and effectiveness.
In Malaysia, the private sector involvement in project development was done through offering incentives that were attractive and this resulted in exponential growth in construction projects which were part of the bigger plan for the development of the country (Endut, Akintoye &Kelly, 2006; Ismail, 2012). The growth in the use of PPPs in Malaysia commenced with the Malaysia Incorporated programme (Economic Planning Unit, 1981) which was followed by programmes to privatize (Economic Planning Unit, 2006). Under this programme the government aims to encourage private sector participation in public projects through the unveiling of the Private Finance Initiative programme (Economic Planning Unit, 2006). In a more recent project, the Tenth Malaysia Plan ensures that efforts are continuously made to promote the involvement of the private sector through use of more PPP programme schemes (Economic Planning Unit, 2010).
PPPs in Africa only begun in the mid to late 1990s and have up to date been applied as a way of improving infrastructure such as telecommunication, roads, water and electricity. PPPs have equally been used to make improvements in social infrastructural projects such as hospitals, schools, garbage collection, and agriculture among other areas. These services have previously been provided through the public sector mainly due to the high capital required in most of them and the inflexibility in pricing due to social considerations (ADB1, 2002).
In Nigeria, there has been a deficit in infrastructure which has derailed economic growth and development and the country requires more than US $ 19 trillion in infrastructure investments. The financing from the federal government is insufficient to fully cope with this deficit in infrastructure development (Oyewobi, Ibrahim and Ibrahim, 2012; Olaniyan, 2013). As a result of this, the Nigeria government is implementing a 30 year plan referred to as the National Integrated Infrastructure Plan (NIIP). This plan seeks to triple the country’s infrastructure. The legislation of the Infrastructure Concession Regulatory Commission Act (ICRC Act) in 2005 equally allowed the participation of the private sector mainly by the use of PPP (Nigeria PPP Review, 2012).
The Tanzanian government can make gains from the use of PPP programmes. Mkapa (2000) noted that the use of PPP demanded using innovative approaches and providing more regulatory frameworks which are directly linked to investments from private entities. For example, based on the National Strategy for Growth and Reduction of Poverty (NSGRP) and The Millennium Development Goals (MDGs), (URT, 2005), the citizens have been placed at the center of the growth agenda tasked with the responsibility of making improvements in the road networks through close partnerships private-public sectors.
In Uganda, the line ministry charged with public works and transport have sought PPPs partnerships for long (Ongolo 2012). The have been recorded gains in the use of PPP programmes in development that includes cost reductions, growth in infrastructure, efficiencies in construction and operations and general increase in the level of quality of service provided. Through the incorporation of knowledge and capabilities from the private sector, much interest has been drawn from researchers, industry practioners and policy makers.
In Kenya, as a way of improving the PPP investment framework, the government has put in place a policy on PPP that articulates its level of commitment to the PPPs in addition to further providing a platform for legislation. In 2012, the PPP bill received parliamentary approval and was ascended to by the president on 14th January 2013 and published as the Public Private Partnership Act, No. 15 of 2013 through a gazette notice No. 27 on 25th January 2013. The law came to effect on February 8th 2013. Additionally, the raod sub-sector had deliberately made a policy to provide for alternatives through the PPPs. The Kenyan government though the PPP Unit estimated that Kenya needs investments in infrastructure of USD 40 billion in the next eight years and there is a funding gap to secure resources to ensure that this is implemented (Kamau, 2012). Kenya as a country is a hub of transportation logistics serving neighboring countries including Burundi, Democratic Republic of Congo, South Sudan, Uganda, Somalia and South Sudan. This makes it critical to ensure that transport and other key infrastructure are developed to meet there growing demands. This has resulted in rapid infrastructure development in the region.
There Northern, Eastern and Southern bypass roads have been brought to completion while Western bypass is still under construction. Funding for these projects has been partly from EXIM bank, China. There are however limit to the amount of debt that the country can take to fund development projects which has resulted in the country seeking for viable alternatives to get funds. The use of PPPs has been fronted a one of the ways to realize this.
According to the World Bank (2014), roads play a dominant role in a majority of economies. The Integrated National Transport Policy, INTP (2009) notes that in Kenya alone, transport by road accounts for more than 93% of all the total passenger and freight traffic which makes it one of the backbones of the economy. An Africa Infrastructure Country Diagnostic Report 2010 prepared in collaboration with the African Development Bank (AfDB), Kenya averagely spends USD 1.6 billion every year on building infrastructure but requires a sustained expenditure of USD 40 billion over the next decade. Ryan (2012) notes that infrastructure projects in Kenya require a combination of PPPs programmes to build and maintain different public projects. Given that railroad, airports, electricity and gas firm are the main representatives of provision of infrastructure, they are often aided by the public sector. Furthermore, a majority of key projects ae pubic and the government must play the vital role in their development and maintenance.
The 28.6 Km long construction of the Nairobi Southern Bypass (NSB) which is a dual carriage way with 8.5 service roads and 12 Km slip roads. The KShs. 17.1 billion project was 85% financed by the Exim Bank of China and the remaining 15% was financed by the Kenyan government. Motorists are able to join the bypass near Park Side on the Nairobi-Mombasa highway and pass through the Nairobi National Park edge, to Lang’ata South Estate, Ngong road, Dagoretti, Thogoto and Gitaru in Kiambu County at a location in which it then joins the Nairobi – Nakuru Highway. Kenya National Highways Authority (KeNHA) was responsible for overall supervision of that Project, constructed by China Road and Bridge Corporation (CRBC).
The main purpose of the initiative of the Southern Bypass was to allow for through-passage of vehicles north and southbound without the need to traverse the Nairobi Central Business District (CBD). There are no direct accesses except through any of the five interchanges. The main aim of the road was to ease traffic in Nairobi City through provision of alternative routes for those motorists headed to Western Kenya among other areas along the northern transport corridor.
The 2015 report by Center for Cooperation with the Private Sector Africa assessed the partnership landscape in Kenya and noted that while the country is far from boasting an array of successful PPP projects across a wide range of sectors, it was nonetheless pleasing to see several high-quality initiatives laying the solid foundation for PPP potential in the future.
1.2 Statement of the Problem
Kenya has been attracting private sector investments for the last three decades which have been made in water, energy, roads, telecommunications and sewerage sectors. The major infrastructure developments indicate the level of government commitments to PPPs and the significant interest it has attracted from private investors, operators and lenders. However, there was no policy specifically guiding these PPP projects.
In Kenya, the Vision 2030 is currently being implemented the GoK which is a blueprint for the development of the country between 2008 and 2030. This vision aims at transforming the country to a middle income country with better quality of life to the citizens and residents. Funds needed to fully support these vision are enormous, and this is already recognized by the government which has seen prioritization of development infrastructure. O achieve this, the Kenyan government recognizes the critical role that has to be played by the private sector players. As such, arrangements have already been made to ensure PPP take off which has offered opportunities to the country through attracting private sector participation in financing, building, running and maintenance of development projects.
There have been numerous studies to evaluate PPP project implementation globally (Farquhason et al, 2011; Rao & Shrivastava, 2011; Burger & Hawkesworth, 2011; Chinyere& Xu, 2012; Qiao et al., 2001; Jefferies et al., 2002) but minimal studies on implementation of PPP projects in Kenya. In order to improve the success rate of future PPP projects, it is necessary to investigate factors influencing the implementation of already completed PPP projects in Kenya. This is particularly so because PPPs are to be used increasingly by the National and County governments. This study will therefore investigate factors influencing the implementation of NSB PPP project.
1.3 Purpose of the Study
This study sought to establish the factors influencing implementation of public-private partnership projects with a case study of the Nairobi Southern Bypass in Nairobi County, Kenya.
1.4 Objectives of the Study
The objectives of the study were;
i. To establish how procurement process influences implementation of Nairobi Southern Bypass Public Private Partnership project in Nairobi County, Kenya.
ii. To assess how corridor route availability influences implementation of Nairobi Southern Bypass Public Private Partnership project in Nairobi County, Kenya.
iii. To examine how politics influences implementation of Nairobi Southern Bypass Public Private Partnership project in Nairobi County, Kenya.
iv. To determine how budgeting influences implementation of Nairobi Southern Bypass Public Private Partnership project in Nairobi County, Kenya.
1.5 Research Questions
The following were the study’s research questions;
i. How does procurement process influence implementation of Nairobi Southern Bypass Public Private Partnership project in Nairobi County, Kenya?
ii. What is the influence of route corridor availability on implementation of Nairobi Southern Bypass Public Private Partnership project in Nairobi County, Kenya?
iii. How does politics influence implementation of Nairobi Southern Bypass Public Private Partnership project in Nairobi County, Kenya?
iv. In what way does budgeting influences implementation of Nairobi Southern Bypass Public Private Partnership project in Nairobi County, Kenya?
1.6 Justification for the Study
On account of keen interest, PPPs are steadily growing in the Kenyan road sub-sector. Suggestions for their effective execution and insight of the challenges to guard against will be priceless information for road authorities, county governments, contractors and management teams. Participants in future PPP road projects are expected to leverage the research results to maximize the performance of future projects. It may also aid to streamline prudent use of resources to produce a more significant eventual effect.
This research also seeks to expand the public management knowledge through breaking ground in the Kenyan road sub-sector for managing PPPs. It is expected that ideas collected by the research could help to raise the profile of PPPs and eventually, create interest for its uptake while potentially resulting in the forging of collaborative initiatives.
1.7 Delimitations of the Study
This study limited itself to the Nairobi Southern Bypass. The study is also delimited to the influence of procurement process, route corridor availability, politics, budgeting and implementation of PPP projects. The researcher ensured the questions in the questionnaire were clear and simple so that they were clearly understood. Privacy and confidentiality was assured to the respondents by ensuring the questions were anonymous and authorization sought from the university, CRBC and KeNHA.
1.8 Limitations of the Study
Interview guides were used by the study as the primary tool for collecting primary data for the study. As expected, some interview respondents were not ready to provide some information sought citing business confidentiality. This was addressed through having the introduction letter that was sourced from the university and giving the respondents assurances that whatever information that they provided would be used with strict confidentiality, anonymity and solely for the purpose of these study.
Some respondents were unable to understand the questions immediately and veered off in their responses citing other projects that were not the subject of the study, causing the researcher to spend much time with them and leaving little time for other questions. Others were not aware of the technical intricacies during the implementation phase of the project after having actively participated during the procurement stage and vice versa.
1.9 Assumptions of the Study
The study made an assumption that all interviewed respondents were literate, and the choice of data collection tool was an interview guide. The study also assumed that the opinions of the respondents reflected the current situation on the factors influencing PPPs implementation. The study also assumed that respondents were truthful in their answers and that the data provided the most appropriate picture of the factors influencing implementation of PPP Projects, a case study of the Nairobi Southern Bypass built in Nairobi County, Kenya.
1.10 Definition of Significant Terms Used in the Study
Budgeting – Refers to the process of making plans about future activities of a business and creating the goals and objectives and implementing them. This involves creation of financial goals for a business and setting up a plan to ensure that they are achieved.
Implementation of a PPP road project – Refers to the construction of a PPP road project. The road construction entails the design and development of new roads, bypasses and missing links.
Politics – Refers to activities linked with a country’s governance and makes decisions that affect a group of persons in order to realize the objectives of governance.
PPP road project – Refers to a model used to fund road construction in which the government is the public partner and the design and construction is undertaken by the private player.
Procurement Process – Involves the process used to fund, make term agreements and the acquisition of goods and services mainly from an external source which is usually done through tendering or a bidding process that is competitive.
Project Implementation – It is simply a means of carrying out the activities described in a work plan efficiently to produce deliverables.
Route Corridor: Refers to the space where the road would be built or the space that has been designated for the purpose of constructing a road.
1.11 Organization of the Study
The study has five main chapters. Chapter one introduces the study and states what objectives will be met. Additionally, the significance, assumptions, limitations and delimitations are discussed. Chapter two reviews the literature related to the study, discusses the main theories and gives a conceptual framework for the study. Chapter there discusses the methodology that was used to carry out the study. Chapter four presents the findings and discussions, summary and conclusions are presented in chapter five.
CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
This chapter reviews related studies on different variables that affect PPP implementation in general and those relating to the NSB Project. This helps to determine what is already known about PPP project implementation and how extensively the topic has been explored. The review also helps in identifying research gaps which the study intended to fill within the scope of its objectives. Relevant theories that the study is anchored on are discussed and the study’s conceptual framework.
2.2 Implementation of PPP Projects
The concept of PPP implementation has gained new resonance and attract global attention particularly in countries that are still developing. In countries that are facing budget deficits, PPPs promise of more efficiency, reduction in costs and burden on scarce public resources have become popular in nations that are balancing tight budget constraints (Spackman, 2008). According to Nell and Associates (2007), there were several factors that made some countries more successful in attracting private partnerships for development of public infrastructure than others. Those factors include, among others, stable macro-economic conditions, good governance structure and a large market size as well as high quality regulation and stable political institutions. Nell and Associates (2007) concluded that large amounts of government budget constraints and, to some extent, ineffective governance could decrease the number and values of PPPs investments among countries that are still developing.
Caspary (2009) did an investigation on the relationship between making improvements on sustainable project implementation and project performance in large urban projects in 46 countries that are still developing. The study compared stringency among various ways that public institutions put in place mechanisms to safeguard project implementation. This was done through an examination of the institutional policies and strategies that were used in public financing institutions, case studies on project levels financed and stringency of application of existing policies by major financing institutions. Analysis was done using trends of data patterns and results indicated existence of a positive relationship between projects implementation and infrastructure development.
In Tanzania, Chijoriga and Komba (2014), examined the level of effectiveness of PPPs use in the infrastructure sector. Through a census that surveyed seven projects between years 2009 to 2014 revealed that only a single project was formal with the rest being informal. Results also showed that informal practice failed to fully meet modern PPP financing and operation systems. Further, informal PPPs did not effectively improve the quality delivery, timely project delivery, accountability and sharing of risk. The conclusion of the study a proper regulatory framework was important in the formalization of projects under PPPs. The study established impediments to PPPs implementation which include absence of guidelines and regulations that are clear, absence of a PPP policy, lack of projects that are credible and bankable, underdeveloped level of the private sector, incapacities in personnel and management and finally, a poor framework for sharing risk.
Kamau (2010) examined what type of link existed between urban infrastructure development and growth of economy in Kenya. A descriptive design was chosen in a census of the target population. Analysis was done through regulation and the findings showed that was a positive link between the implementation of infrastructure development and overall growth in the economy. Finally, Musyoka (2012) study used a descriptive design and established that socio-economic, governance structure and environment factors systemic risk, and favorable state of economy positively influenced PPPs performance. The results further showed that proper risk management such as appropriate risk management, contractual agreements and government guarantees influenced PPPs. Through PPPs, the public sector is able to leverage finical resources through partnerships with the private sector which has enabled them to implement infrastructure projects that are virtually unaffordable.
2.3 Procurement and Implementation of PPP Projects
The aim of effective procurement is encompassed in four main objectives namely transparency in the procurement process, competitiveness, a public agency that is well organized and committed and finally the sharing of authority in private-public sectors. Ensuring that the procurement process is transparent and competitive shortens the negotiation times and reduces the associated transaction costs which eases the implementation process. This is mainly attained through having clear ideas about a project and establishing precisely what are the client requirements. In a majority of the scenarios that have a bidding process that is competitive bidding specifically on price is not sufficient to secure private strong consortiums and realize the value for money in expenditure of public resources. The government should rather have a perspective that is long term in nature when right partners for PPPs (Corbett & Smith 2006).
Ong’olo (2006) states that transparency is the in which project design and imitation, selection and procurement should be organized. He notes that the use of bribes and other types of corruption aimed at winning project approvals form government should be rejected. Keeping contractual norms unambiguous and clear as a way of minimizing opportunism. When compared with public procurement of standardized service or projects, PPPs are more likely to cause problems. This is because their procurement procedures are likely to be infrequent for public buyers, way bigger, complex and are often asset specific (Iossa et al., 2007). There have been documented governance problems with regard to PPP design, and implementation which has called for more transparency levels and disclosure of contractual terms in a proactive manner (NHS, 2003). Procurement processes that are transparent include openness, fairness and more trust by the public which minimizes the perceived risks in the market.
A PPP that is transparent has been described by the Feedback Ventures workshop to be one in which (i) no potential bidders were involved in in designing the bid criteria; (ii) no particular party was favored in the design of bids; (iii) there was no qualified competitor was disqualified as a result of artificial entry barriers because a criteria which is transparent was used; (iv) there was no use in subjective criteria that favored any part using undue weightage; (v) there were no joint ventures between the state and potential developers that would result in state capture; (vi) no particular bidder was favored by a leak in insider information; and (vii) there was no manipulation of the post-award renegotiations or any sort of revisits in the project design.
Successful implementation of PPP projects is mainly dependent on selecting private concessionaire that are the most suitable. Miller (2000) observes that to ensure that concessionaire who is suitable is selected, the procurement procedures ought to be based on critical elements including fairly treating the actual competitors, ensuring competition is head to head, and use of technology in the competition process. As a way of promoting contestability and competition, potential bidders should be included in the bidding process.
According to the Department of Transportation in the United States (2007), to ensure a procurement process that is competitive, it is important to have enough numbers of private firms and teams that are capable. Yvrande-Billon (2005) noted that specifying the adequate service was also essential in franchising, because it provided a competition base in the process of making bids and it also set what benchmarks should be used when evaluating procurement bids. The franchisor should therefor refine the calls made for tenders as much as possible. When this is not done properly, bidding costs can rise and bid applicants may not be keen to put in their bids because they are discourage by the high risk associated with a project.
Hodges and Dellacha (2007) point out that while selection of a private investor in a process that is the most preferred, governments are sometimes approached with private firms with new ideas on projects which are often referred to as unsolicited proposals’. There proposals can become controversial when the government made negotiations on the rights to a project directly with little transparency or use of competing proposals. Countries need to develop effective systems in order to channels proposals that are unsolicited into a process that is both competitive and transparent. This includes the development of policy on unsolicited proposals.
A public agency that is well organized and committed is important order to have in place the right management and technical capacities to both negotiate and manage public projects. Karisa and Dantas (2006) argued that quality in public institutions was key because PPPs thrived when there was less or no corruption at all and the law was respected and enforced. Hammami et al. (2006) in a study that used panel data analyzed various PPP projects in an investigation on cross-country and cross industry factors affecting PPP arrangements. The study found that conditions which were linked to institutional systems that were weak hindered PPPs use in financing of projects.
The United Nations Economic and Social Council (2002) identified the need for an authoritative, central government commitment to be major factors when seeking successful PPP implementation. According to the report, PPPs units establishment was fronted as the best approach to indicate commitment. Through these units, PPP projects would be driven forward, gave suitable advice and acted as single contact points for entities intending to bid which made them knowledge and experience repositories. They promoted the chance for the public sector to build the capacity and expertise that is critical to manage complexities associated with PPP procedures. Further, Ong’olo (2006) reiterated public administration that is effective was key and this could be achieved through having dedicated PPP centers within government that could coordinate the entire process of PPP. Cuttaree and Mandri-Perrott (2010) equally recommend that is advisable to create agencies or institutions that support PPPs. This is because PPP projects need checks, balances, extensive supervision, and technical support that line committees and public entities. A PPP unit would also help in addressing governmental constraints and improve quality control.
Authority and responsibility that is well demarcated and shared were critical to maintaining alliances that are long term. Effective procurement was also related to the shared authority between private and public sectors. These two sectors must respect each other in the procurement negotiation process. Nelson and Zadek (2000) further notes that openness and clarity about the expectations of individuals and agendas, with an agreement that is mutual on common agendas, which are creation of synergy between the benefits that participants desire and the benefits that will acre to the society. PPPs are regarded as partnership actions that have huge stakes for public-private sectors and therefore need the two sectors to work closely together rather that pursuing individual interests in order to ensure project success.
2.4 Route Corridor Availability and Implementation of PPP Projects
India faced a problem of land when building the Hyderabad road in Andhra Pradesh because of a lot of opposition from the public because of claims that it deprived some people their livelihoods and quality of life. The public was kept in the dark about the total land that was required for the project. Further, the project also faced different risks including regulatory and revenue risks. The risk in revenue arose out of suspicions in demand and the pricing of the project (Balaraman & Malhotra, 2008).
In Kenya, there had been an increased controversy on the accuracy and correctness of list of names containing the Project Affected People (PAP) who were to be compensated. For instance: Lamu County government prepared a list with 62 names, Lands ministry; Provincial administration had over 100 names of would-be beneficiaries. The notice of public inquiry by National Lands Commission (NLC) was issued for 249 PAPs in December 2014; this was a clear indication of how much land that was to house the whole project had become of value.
The Boni community –the hunters and gatherers- who have lived in Mukowe – Bothai – Kiunga road in the villages of Kililana & Mashundwani since 1960 had not been given any legal standing over the place even though it was a constitutional provision and the LAPSSET was set to take 70% of the land that they had customarily held years. As a result of the Lamu project area, there has been a lot of illegal, extra-legal and irregular land acquisition of land for speculation purposes around the project area. This raise the intensity of land demand now and in the future and persons from other parts of the country are expected to flood the area increasing the population density and demand on the facilities that are available (Nunow, 2012). The government had the aim of reducing poverty through improving the quality of life of more than 15 million people who reside in marginalized areas of Kenya. However, different issues arose such as land tenure and its ownership which required sorting out prior to commencement of the project (Nunow, 2012).
The acquisition of route corridor land was implemented in two different ways. First, through the land buying from sellers who were willing to dispose it off and secondly through making contracts with owners of individual land when there was no available land for acquisition. The later agreement allowed firms to plan, survey and open up roads in the planning areas (Kamau, 2012).
As a way of reducing the already widening gap between the supply and demand for land that was already properly planned, been well surveyed and had all the required services in Tanzania, the state allowed under the Urban Planning Act No. 8, 2007, outsiders notably the public and private sector to develop or add value to and by panning, servicing and surveying. PPP was used in planning and delivery of service has been applied globally. Development of land through the PPP method of planning, surveying and servicing is practiced in many cities in countries that are developing around the world (Kwak, 2009).
PPP play the role of delivering pans, surveys and servicing land in Tanzania, and have been analyzed through execution of the process through which various activities are conducted. This encompasses identifying liaison areas with the local authorities, acquiring the land, planning, surveying and servicing the land (Mertens, 2005).
Through the planned land delivery projects that were done using PPP frameworks, conflicts in use of land and boundaries were addressed. Customary boundaries were replaced with boundaries that were based on survey plans. The newly established boundaries maintained similar sizes of land prior to the implementation of the project for land planning and survey. Through this, there was a reduction and mitigation of conflicts over land and the PPP arrangement had become instrumental to providing planned land and immunizing of squatters (Iqbal, 2004).
2.5 Politics and Implementation of PPP Projects
Zhan (2012) notes that a possible obstacle to PPP implementation is the lack of political support and goodwill towards the project. Duffield (2010) revealed high political sensitivity is one of the ways of the reasons that can result in breaking down projects. There is a close link between development and public policy implementation on one side and politics on the other side. A positive political attitude specifically to the private sector that is charged with a project promotes PPP growth. Conversely, when the systemic risk is high, the PPP project risk becomes exemplified (Akinotye, 2012).
True commitment from the political leadership becomes critical for successful implementation of a project. PPP programmes need to be supported by the good politics and understand the potential benefits this has in public service provision. Politicians must be part of the PP project, and promote it and create a good environment that will attract private sector players to be part of PPP projects. Some responsibilities should be transferred to the private sector from the public sector in order to build its capacity to provide public services. The state must however still bear the traditional duties that are assigned to it like education, security and healthcare incase PPP programmes do not meet these duties. Through PPP programmes, the state is given a chance to address issues that are both politically and labour sensitive (Wang, 2013).
PPPs were designed to provide public services without raising controversy or resistance from political leaders. Concerns such as regionalization, downsizing, difficult policy implementation, coordination of political entities and cross border relationships can easily be addressed through use of the private sector because of efficiency and flexibility. The U.S. Department of Transportation, (2010), notes that a PPP project can be doomed due to a lack of enough political support. Therefore there should be a lot of caution and precautions in PPPs backed by good political goodwill and support. Qiao et al. (2011) and Zhang et al. (2012) concur, noting that political supported cannot be separated from successful PPP implementation. Private entities will shy away from investing inn regions or countries where there is not enough political support towards PPP programmes.
The state is always in a favorable position that allows it to promote a conducive environment in order to attract investors. This includes giving guarantees against risks including legal changes, currency fluctuations, corruption and time taken to get approvals and permits. The government should have in place an institutional framework and create entities to regulate PPPs and this should not be under political influence. Insulation of such agencies from political pressure is critical because often, PPPs raise a lot of political questions and issues. They include concerns on capacity, role of state, level of commitment to universal healthcare, democratic good governance and collateral consequences such as development (Flinders, 2013). Therefore it is paramount that politicians address such questions and elucidate the current benefits of PPP initiatives to the public.
Performance can be promoted through the use of PPP in addition to tackling difficult social problems and managing political pressures. There is a need for good political will at the national and local levels for successful PPP initiatives. The status quo need to be challenged by champions who should fight vested interests and address problems when they arise (Asmal, 2012). There should be enough political support to address specific tasks such as allocating, promoting and awareness and creating empowerment (Brown, 2015).
2.6 Budgeting and Implementation of PPP Projects
PPP was generally adopted by governments that had an infrastructure gap yet faced budgetary and resource constraints (Reside and Mendoza 2010). PPPs are most likely to be used by governments who have budget deficits as a route to accelerating financing of public projects (Sharma 2012). Financing through the use of bank deficits remained at levels before the crisis because banks adjusted their structures in anticipation for changes in statutory requirements such as national level regulations and Basel III regulations. Private sector involvement in public projects enabled states to avoid going into debts to finance public infrastructure (Iqbal & Khan 2004). Similarly, Kahf (2002) suggested states did not have to spend their money in public projects since the private sector can handle such project. (Bhattacharya, Romani & Stern 2012) noted that allocation of public funds to projects by the government has been one of the popular ways that have been used to finance infrastructure for instance the building of roads.
According to UNECE (2008), one of the reasons why there has been inadequacies in public road networks is the yearly decline in fund allocation over different planning periods in terms of the proportion of the total budget. Hammami and Ruhashyankiko (2006) established that countries that allocated large amounts to financing public projects had lower levels of PPPs. There was a transfer of those funds to concession trusts and funds paid to confectionaries when projects were completed. Deductions would be made when concessionaires failed to meet the project specification and parameters for operational performance. This encouraged contractors to comply with project requirements including building, operation and maintenance of public projects.
Flyvbjerg, Holm and Buhl (2003) found that escalation of costs was highly determined by the formula that was used. Bertisen and Davis (2008) established other factors that had an impact on construction time and the overrun of project. According to the findings of their analysis, common causes of project delay included poor levels of labour productivity, poor planning, and changes in design. Other additional causes include overruns in costs, inflation, and cost of materials, variances in estimates and complexities in projects. Further, there was an underestimation from feasibility studies and capital costs of projects were 14% averagely higher that what was estimated in the feasibility studies. This was attributed to a lack of project financing and the inflation of projects economics in order o find financing.
In many parts of the developing world, amount of funds allocated to finance infrastructure contributed largest in exacerbating the gap in the market for infrastructure finance (Reside and Mendoza 2010). Re-invigorating supply of infrastructure within the developing world required a supplement in finance with new sources of equity and debt finance. It meant pairing existing instruments with innovative tools, such as multilateral development bank guarantees, to reduce risks, lower the cost of sovereign borrowing, extend tenure, and strengthen market and project environments. On that menu, PPPs represented one of the many promising instruments to meet the challenge of crowding finance of infrastructure.
Most public private partners were concerned with infrastructure financing situation due to the financial crisis that some countries experienced during 2007-2008. Prior to the economic crisis in Asia, there was sufficient foreign currency flow into project financing mainly by international banks. International banks highly participate in financing projects in various countries because of the available international developers who were building the infrastructure. These created a long term relationship between banks and developers which lowered the risk associated with project financing. However, after the economic crisis in East Asian, a bitter experience of that first round of infrastructure development was witnessed.
Certain countries including Indonesia defaulted their loan guarantees because of currency devaluations. There were many projects that were hot by this because of the questionable way in which they had been financed. The risk in projects that resulted from this led to reductions in the flow of capital for projects in these countries. There was more reliance on domestic financing because international finance was very limited and local banks started to be significant players in the development of projects. The use of banking for project financing was mainly due to the undeveloped natures of other sources of financing in those countries.
2.7 Theoretical Framework
Relevant theories that are related to this study are reviewed in this section. The study used the Agency theory and the Development theory.
2.7.1 Agency Theory
Jensen (2003) states that the agency theory generally relates to the type of relationship or a contract between the principal (s) and the agents(s) where the principal instructs the agent to perform a work or duty on their behalf in exchange for pay or any other agreed upon terms of payment. Caers et al., (2006) observe that with the basic assumptions in the agency theory that information is asymmetrical and conflicts in goals, the relationship between the agent and the principal would not always be smooth. This is because agents may not have the best interests of the principle at heart all the time. According to this study, the government is deemed to be the agent who is charged or instructed by the principal who is the electorate or citizens to govern on their behalf. The government does not at all times act with the best interests for the public resulting in agency problems where the public calls for better administration from the government.
According to Laffont and Tirole (2004), there is a theory of procurement and regulation incentives which define the two main types of strategic behaviour of government in procurement projects. These are making adverse selections and the moral hazard. Adverse selection is the most applicable strategic behaviour in PPP that often arises when private entities are in possession of more exogenous information when compared to the state. These include technologies and actual project costs that are used to extract rent when they interact with government even though they may be having poor bargaining powers.
According to the agency theory, divergence arise when the principal and agents interest differ in project execution. The project manager who becomes an agent of the government who is the principal does not at all times act with the interests of the agent at heart. The theory explains the intricacies that are integral to a good principal and agent relationship that is vital for successful PPP project implementation. Dynamics include government, NGOs and providers of service in the private sector. There was evidence of narrow interests in private sector who mainly focus on maximizing their profits which may harm the public interests through deliver of low quality services and a reduced level of maintenance or providing services at high prices (Sagalyn, 2007).
In an environment where principal agent problems existed, risk transfer did not always result in efficient implementation of Public Private Partnerships (De Palma et al. 2009). Therefore, the application of agency theory was used to derive a better illustration of the factors influencing implementation of PPPs projects and how it could be achieved through the examination of the relationships between the local governments, who could be taken be the principal and the agent being the private sector.
2.7.2 Resource Dependency Theory
The resource dependency theory (RDT) states no firm possesses all the needed capabilities and resources to enable it survive alone without partnering with other firms which exist outside its boundaries (Pfeffer and Salancik, 1978). This theory provides insights into the existing relationships between different organizations and the way these interactions influence risk mitigation or minimization (Hillman, Withers, and Collins, 2009). Hillman et al (2009) notes further, that the type of relationships between organizations only absorb a select number of uncertainties faced by organizations in the environment in which they operate. According to the theory, the type of resources that are possessed by none organization are fundamental to how successful the organization becomes (Tokudo, 2005).
Barney (1991) notes that resources can include the unique capabilities, information, expertise, assets, experience, rights and knowledge which an organization has under its control through these resources, the organization is able to craft and implement strategies aimed at ensuring that its levels of efficiency and effectiveness are improved. Tokudo (2005) made the argument that an organization can possess resources which are similar to those owned by another organization but perform differently. This is due to differences in capacities between the two firms. Capability refers to a firm’s capacity to covert resources into quality finished products and services.
In the context of the current study, firm resources are essential in PPP agreements implementation. Without the requisite resources it is not possible to implement projects. Governments and private investors were deemed to have the resources to implement partnerships that they entered into mainly PPP arrangements.
2.8 Conceptual Framework
The conceptual framework represents a structure of concepts that were put together to show relationship between research variables (Orodho and Kombo, 2002). Independent variables for this study were the procurement process, the route corridor availability, politics and budgeting. They were perceived to directly influence the dependent variable, that is, implementation of the PPP project. Government policies, international funding policies and partners’ policies represented the moderating variable, in that, it was perceived to behave like an independent variable, by having a contributory influence on the success of NSB PPP project but not enough to be considered significant.
There are various critical elements in the procurement process including a process that is competitive, transparent, properly organized and sustainable in terms of operations and maintenance. This study perceived the procurement process to be very critical because it lowered project risks and costs, and reduced the amount of time that was spent to implement PPP programmes. Governments need to have a long term perspective when seeking the right partners for PPP projects. PPP projects required the existence of a stable regulatory framework in the constitution in order to carry out projects easily within the law for effective implementation.
The route corridor availability was critical as that was the space on which the Bypass road was constructed. Data on route corridor land and its availability was important because it directly impacted on the implementation of the project. Where designs warranted additional land, compulsory acquisition of land was effected to avail land for the project. Any obstructions within the route corridor hindered project implementation until obstructions were removed.
Politics was associated with types of political risks and administrative authority, which was significant in encouraging more investors to bid for future PPP projects. Governments facing budgetary constraints are riddled with budget deficits, higher debt burdens and are more likely to use PPP initiatives to finance their public projects developments. The involvement of private investors in public projects assisted countries to minimize or avoid their public debts in financing their public projects.
The ultimate aim of any business enterprise is to make profit. It is therefore important that proper budgets are made based on the deliverables. Plans have to be made on how funds will be allocated and disbursed to ensure that the project is fully implemented within the required time. Even before getting into a venture, consideration must be made on the economic viability of the said venture. In PPP, both the Government and Private partner need to assess the viability of project before signing the contract agreement. The value of money changes daily and how those changes are treated in the PPP ventures, overdue amounts and cost increases.
Moderating Variable
Figure 1: Conceptual Framework
2.9 Knowledge Gap
Different types of studies have been done on PPP projects. The literature review provides considerable analytical and theoretical proof for certain guiding forces in PPP programs. The research studies examined and the knowledge gaps perceived are in a summary in Table 2.1.
Table 2.1: Knowledge Gap Matrix
Variable Author (Year) Focus of study Research Methodology Findings Knowledge Gap
Procurement Process Banerjee et al. (2006) The effects of institutional environment on the participation of the private sector in building of public projects in countries that are still developing. The study used fixed effects model or random method.
There was a significant role played by the institutional environment to attract partnerships from the private sector in the PPI. The study only focused on the link between enforcing of law in private involvement in development projects in markets that are emerging.
Ong’olo (2006) Relevant factors arising from practices that exist on PPPs and the relevant legal, policy and structural reforms that influenced Kenya’s adoption of PPP frameworks.
Desk study methodology
Interviews and consultations with key informants. Public Administration was critical through the creation of a dedicated central PPP units in government to manage the process of PPP. There was no focus on what effect the process of procurement, route corridor, politics and budget on the implementation of PPPs.
Caspary (2009) Relationship between increasing level of sustainability developing urban projects that are big and how they performed in 46 developing countries.
Census. Mthe study did a mapping of 7 different infrastructure projects covering 2009-2014. Results showed existence of a positive link between the implementation of projects and the development of infrastructure. The study area did not include Kenya
Chijoriga and Komba (2014) Determination of how effective PPPs are in developing public projects in Tanzania. Desk top review A lack of a clear policy has affected PPPs. Further, lack of precise regulations to guide the sector, an underdeveloped and inactive private sector and an absence of projects that are bankable have negatively affected PPPs.
Study was not done in Kenya.
Route Corridor Availability Wee (2010) Community organisations and rural development Questionnaire and Interview Guide Many of the projects that had collapsed were because due to clients’ ignorance of technical staff. There was no statistical evidence given on the variables of the study.
Buckout et al. (2010) The effect of Route availability and composition of PPP projects Desktop review The route corridor should be taken into keen consideration to ensure effective implementation of PPP projects The data analysis method of multiple regression analysis did not fit the method of sampling that was used and therefore, this provides a gap in the methodology.
Wee (2010) Route corridor availability in projects implementation Used descriptive research methodology.
The community should be compensated and incentives given for successful implementation of projects in line with time and budgetary constraints. The research concentrated on agricultural projects only thus creating a contextual gap because the study aimed at establishing the factors that influenced PPP implementation as a case study of NSB.
Musyoka (2012)
Determining factors that influenced how PPP performed specifically in the Kenyan housing sector and the level to which PPP was successfully influenced by such factors.
Descriptive research design was used.
Disproportionate stratified sampling. Questionnaires aided the collection of primary data.
The successful implementation of PPPs was influenced by route corridor factors such as the systemic risk and unsystematic risk of a country.
Effect of procurement process, route corridor, and budget on implementation of PPPs was not the focus of the study.
The study did not focus on NSB PPP project
Politics Zhan (2012) PPP projects and political infiltration Questionnaire survey of international expert opinions. The absence of enough political support was an impediment to PPP project implementation. A variety of projects were not the focus of the study and the case study approach was not adequate enough.
Duffield (2010)
Politics and PPP projects
Questionnaire and Interview Guide was used
Projects might be broken down as a result of sensitive politics.
The findings of the study were based only on water projects.
Akinotye (2012) PPP projects leadership Questionnaire survey of international expert opinions PPP/PFI projects was influenced by a lack of sufficient political support. Project success was dependent on political leadership commitment. Only capitalized on faith-based world bank financed projects
Flinders (2013)
Sub-Saharan Africa economic and infrastructural development.
Desk study methodology
Interviews and consultations with key informants.
Public officials notably politicians must be able to present the advantages and answer questions on PPP projects.
The research never addressed the problem from the donor financing perspective
Budget Reside and Mendoza (2010). The effects of incentives, macroeconomic planning on project design, contracting and implementation on the performance of PPPs in Asia. Focused on variables such as political economy, traits of firms, fiscal government capacity and level of technical efficiency. Two-step probit regression procedure Projects could be hampered by poor economic environments, freezes in tariffs and risks in the implementation of projects.
There was a moral hazard, inferior outcomes and poor selection due to economic environment in the project planning and design phases. The study was only conducted in Asia which provides a contextual gap as this study was conducted in Kenya and more specifically Nairobi Southern Bypass.
U.S. Department of Transportation (2007) What role was played by institutional factors (including financial organization, cultural, statutory and regulation) in promoting or obstructing PPPs successful implementation? Used secondary data through reviewing available literature on PPPs use and management in the transportation sector in the USA. . The widening gap between the requirement to improve and expand aging infrastructure in the USA stimulated the interest of the public in PPP initiatives and projects. The study was only done in the US; a developed economy.
Its focus was not on the influence of procurement process, politics, and budget on the implementation of PPPs
Cuttaree and Mandri-Perrott (2010)
Reviewed PPP projects in Central Asia and Europe and made a market assessment of PPPs.
Survey method and desk top research
Since PPP projects required close monitoring, control and technical support in order to line public entities and committees, a PPP unit helped address capacity constraints within Government and contributed to quality control.
The study was carried out in Europe and Central Asia thus creating a contextual gap as this study was conducted in Kenya and more specifically the NSB.
Pongsiri (2002)
Regulation and public private partnerships.
Desk study methodology
A sound regulatory framework ensured partnerships operate efficiently and helped optimise available resources
The analysis only focused on Asia.
Its focus was not on the procurement process, route corridor, politics, and budget.
Sharma (2012) Factors which determined PPP infrastructure projects. Used negative binomial, zero inflated Poisson, Random Poisson and Negative Binomial. Markets that had higher income and which were larger attracted more PPP initiatives. Study avoided focusing on what effect the procurement process, route corridor, politics and budget on implementation of PPPs
The study was not conducted in Kenya.
Kwak (2002)
PPP benefits, obstacles and use globally
Desktop review
Government was involved inappropriately and or lacked capacity to implement and manage PPP programmes that may have resulted in failure of projects.
The study only focused on regulatory framework and governance structure thus creating a conceptual gap.
Karisa and Dantas (2006)
International experiences on PPP potential in road projects development.
Desk top review
A high potential existed in private sector attraction to PPP but successful implementation of PPP mainly depended on plans made before implementation begun.
New Zealand was the location of the study. This created a contextual gap as this study was conducted in Kenya
Its focus was not on procurement, route corridor, politics, and budget which was this study’s main intention
Li et al. (2005) Sought to find out what the relative importance of critical success factors (CSF) numbering 18 was on PPP/PFI implementation in the UK. Questionnaire survey research The most important factors for success of PPP construction projects in the UK included guarantees by government, feasibility of projects, effectivities procurement and economic conditions that are favorable. . This study focused on route corridor and budgeting which were not variables accounted for in that study
2.10 Summary of Literature Review
There has been considerable interest on the concept of PPPs globally notably its use among the countries that are still developing. The benefits that PPPs provide including greater efficiency, savings made on resources and a reduction of the burden payed on scarce public resources has popularized the use of PPP programmes (Spackman, 2008). The use of PPP programmes is now being fronted as a viable option to funding of public infrastructure. Chapter two has discussed relevant literature on PPP projects, both general and specific cases. Motivated by previous studies and considering the development issues in the demand for good roads in developing countries, this study identified factors influencing the implementation of NSB PPP project.
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
This chapter presents the methodology that was used to carry out the study. The design that was selected is discussed, the target population, sampling methods, data collection procedures, instruments for data collection, how analysis of the data was done and concludes with the ethical consideration that were observed during the study.
3.2 Research Design
The study was developed as a qualitative instrumental case study. The main aim of choosing a qualitative approach was because it clearly reflected the key features of qualitative research as pointed out by Creswell (2007). The research instrument used to collect the data was the researcher which guided the design of the study. The use of a qualitative design gave a reflection of the constructivist paradigm which assumed that there was no absoluteness in reality but rather, it was defined by a consensus of the community (Mertens, 2005). The study was an instrumental case study which aimed at being a research instrument that was adequate for studying PPP projects and related issues.
3.3 Target Population
The target population for the study constituted employees of RBC who were part of the implementation of the NSB project and KeNHA whose main responsibility is national roads development, management, rehabilitation and maintenance in addition to NSB mandate implementation. Special Projects Department in KeNHA and the PPP unit constituted the units selected by the study. These had also previously served as the technical arm and secretariat of the PPD committee which had a mandate of making assessments and approval of PPP projects.
The study population as shown in Table 3.1 was drawn from staff members who had worked for a minimum of five years at PPP unit and/or Special Projects department within KeNHA and CRBC, the implementing Contractor. Those respondents were selected since they had adequate knowledge and information concerning PPPs road projects.
Table 3.1: Target Population
Organisation Target population
KeNHA 44
CRBC 27
Total 71
Source: (KeNHA Report, 2017)
3.4 Sample Size and Sampling Procedure
This section explains the sampling method that was used to select the sample size. Kothari (2004), defines a sample to be a subset of a larger population- the target population, from which a researcher intends to pick a proportion that will represent the rest of the target population. Sample size needs to be adequate and represent the rest of the population in order to give results that represent the rest of the population.
3.4.1 Sample Size Determination
Mugenda and Mugenda (2009) point out a sample refers to a sub-group or smaller group that is obtained from a population that is accessible. A proportion of 10 to 30% of the population is a good sample repetitive. 35 respondents from CRBC and KeNHA were chosen to be the sample that was used for the study. This represented 50% of the target population. When picking out the sample, the key factors which the researcher took into consideration included population size, and resource constraints such as finance and time.
3.4.2 Sampling Procedure
The researcher opted for purposive and snowball sampling. Kerlinger (1986) notes that purposive sampling is a non-probability method in which there are deliberate efforts and judgements of the researcher that includes typical groups or areas in the sample size. Mugenda and Mugenda (2009) observe that purposive sampling allows a researcher to pick out the cases that possess the information that is needed to answer the research questions. Snowball sampling applies purposive sampling to pick out desired respondents who in turn recommend or refer other sampling units that have data or information useful to the study. The researcher used this because of the limited time and the difficulty in locating samples from the target population because of their high mobility due to nature of their work.
The sampling frame for the study constituted of workers who had previously served KeNHA and CRBC for a preceding period of at least five years. The workers have been to different work location and engaged in different projects and capacities, which made them appropriate for the study because they had been part of the service delivery framework over the years that they had been employed.
Table 3.2: Sample Size Determination
Category Target population Sample Size
KeNHA 44 22
CRBC 27 13
Total 71 35
3.5 Research Instruments
Interviews and document analysis were the instruments used to collect primary data for the study. The key interviewees consisted of top managers and engineers from both KeNHA and CRBC. Kumar (1989) notes that key informant interviews essentially aim at involving participants that are likely to give relevant information. This method has the advantage of offering information that is confidential in nature which would otherwise not be easily revealed by other participants. The key informants provided the researcher with events and conditions which influenced the implementation process of PPP projects. Through that method, the researcher probed deeply on factors that influenced implementation of NSB PPP project.
3.5.1 Pilot Testing
According to Holloway and Wheeler (2002), the use of pilot studies is not usually done in qualitative research but inexperienced researchers may perform interviews to get accustomed to methods that will be used to collect data. The pilot test was designed to evaluate and improve the research instrument’s level of validity and reliability and ensure correction of any errors at an early stage. The pilot study for this research was conducted on 6 respondents, from the supervision consultants’ team, who were outside the chosen population for this study. The supervision consultant’s staff had some idea on the intricacies surrounding the NSB PPP project, though not party to the construction contract.
3.5.2 Validity of the Research Instruments
Research refers to the degree and accuracy that can be drawn from the findings of a research. It is an indication of the level of to which the findings of a study represent the rest of the population that is being studied (Mugenda and Mugenda, 2009). In this research, validity meant meeting the objectives of the study through using the research instruments. To ascertain the validity of the interview guide used, the guide was peer reviewed by the supervisor of the study. This was aimed at highlighting any potential errors in the research instrument and ensure content validity. Light amendments were made to the original guide to ensure that the research questions were tackled comprehensively. It was therefore believed, that the interview guide yielded valid information.
3.5.3 Reliability of the Research Instruments
Reliability entails the level to which a research instrument yields results that are consistent over a period of time (Kothari, 2004). The study ascertained the reliability of the research tools using a pilot test. This helped in identifying unclear or ambiguous statements in the research interview guide and unnecessary questions which led to some modification in the interview guide. The pilot test also helped determine the duration required to answer all the questions and determine if the questions elucidated responses that were adequate. The study implemented a test of reliability through re-testing the questionnaire. This involved re-issuing the same questionnaire to the same respondents for a second time. The Researcher concluded that the responses were reliable when the second responses compared to the first showed similarity and insignificant variations.
3.6 Data Collection Procedure
Permission was sought from the University of Nairobi to conduct research through an introduction letter and went ahead to obtain a research permit from the National Commission for Science, Technology and Information (NACOSTI). In the absence of the staff members, the interview guide was sent by email to ensure that the study received the required sample to generalize the population. Further, prior to scheduling interview appointments from the sampled participants, a list of the topics was emailed to enable them adequately prepare before data collection.
The document analysis for the study encompassed systematically evaluating both the print and electronic sources which the researcher deemed to be suitable. This enabled the researcher to examine and interpret data appropriately in a way the elicited meaning and understating that was vital for developing empirical knowledge related to factors influencing PPP implementation (Corbin & Strauss, 2008).
3.7 Data Analysis Techniques
The study used thematic analysis to analyze responses on factors that influenced implementation of NSB PPP project. This involved identifying, analyzing and reporting themes of the study that were in the qualitative data. Braun & Clark (2006), observe that thematic analysis should be shared with all methodologies. Through this method, the researcher was able to organize and make a detailed description, interpret and come up with conclusions that relate to the factors that influence PPP projects implementation. After organization, the researcher did a content analysis of the data to establish what was relevant. The data was read to establish what the general sense of the information was and make a judged reflection on what it generally meant (Creswell, 2009). Data was then carefully analyzed in order to establish phrases, words and concepts which had patterns that were repetitive (Fink, 2009). Based on patterns that were emerging, analysis was then done according to the objectives, conceptual and theoretical framework. Finally, the researcher made interpretations of what the findings meant to ascertain what factors influenced PPP project implementation.
Data on the background of the respondents was analyzed quantitatively by frequencies and percentages. Document analysis was also used to enrich the findings obtained from the field. Findings were then presented in interview transcripts with explanations and qualitative data presented in tables with explanations.
3.8 Operationalization of Variables
Table 3.3: Operationalization of Variables
Objectives Variables Measurement Measurement Scale Tools of Analysis
To establish how procurement process influences implementation of Nairobi Southern Bypass Public Private Partnership project in Nairobi County, Kenya.
Procurement Process -Competitive Procurement.
– Transparency.
-Sustainable Requirements.
Nominal Content, Thematic
To assess how corridor route availability influences implementation of Nairobi Southern Bypass Public Private Partnership project in Nairobi County, Kenya.
Route Corridor Availability -Availability of Land and Data.
-Cost of Acquiring Land.
-Obstructions within the Route Corridor. Nominal Content, Thematic
To examine how politics influences implementation of Nairobi Southern Bypass Public Private Partnership project in Nairobi County, Kenya.
Politics -Government Provisions.
-Legal Lobbying.
-Decision Making.
-Political Infiltration. Nominal Content, Thematic
To determine how budgeting influences implementation of Nairobi Southern Bypass Public Private Partnership project in Nairobi County, Kenya.
Budgeting -Payment Amounts Overdue.
-Cost Increases.
-Economic Viability.
-Funds Allocated Nominal Content, Thematic
Implementation of Public Private Partnership projects Implementation of the Nairobi Southern Bypass Project -Project Completion
-Public Traffic Usage. Nominal Content, Thematic
3.9 Ethical Considerations
Mulwa (2006) described ethical issues as standards of behavior and practical procedures that researchers were expected to follow. In order to conduct the research, diligence and expertise were required in addition to integrity and honesty. This aimed at ensuring the study protected and recognized participant’s rights. The researcher coordinated the data collection after permission was granted by CRBC and KeNHA. The researcher concealed the identity of respondents in order to maintain confidentiality, privacy and anonymity. The researcher informed the participants of the study of their rights to withdraw or decline from participating in the study. All respondents were treated equally after explaining to them what the purpose of the study was and their role. Participants were assured all information obtained would be used exclusively for academic purposes.
