Project performance in a toll road infrastructure with a public-private partnership scheme

Abstract

Public-private partnership (PPP) models were employed, especially in the toll road sector, by many governments to boost the development of the infrastructure and build strong connections among regions. PPPs are chosen as a scheme to fill the financial gap. Good project governance is one of the crucial points that should be supported by several significant factors, which will significantly affect projects’ performance. This study analyzes the influence of projects’ intellectual capital, investor protection mechanism, and ownership structure on the implementation of good project governance and the implications for their performance. The data were obtained through questionnaires sent to 43 public-private partnerships in toll road projects in Indonesia. The partial-least-square structural equation model (SEM) was subsequently employed to analyze the data. The study findings showed that (1) projects’ intellectual capital and ownership structure affect the implementation of good project governance, (2) the implementation of good project governance affects projects’ performance, and (3) projects’ intellectual capital and ownership structure affect their performance through the implementation of good project governance. However, the other five hypotheses investigated, namely those concerning projects’ intellectual capital, investor protection mechanism, ownership structure in project performance, investor protection mechanism for the implementation of good project governance, and project performance through the implementation of good project governance, were not supported. This study provides a knowledge basis enabling decision makers to understand precisely the factors that affect project performance through the implementation of good project governance.