15 Selecting the Best Public–Private Partnership Contract by Using the Fuzzy Method
149
In this study, based on the selected criteria and their importance levels, the best
public private partnership contract will be determined with the same methodology.
The selected parameters of the public private partnership contract, including financial
strength, capital strength, financing capacity, financial guarantee, technical ability,
advanced technology, project implementation plans, personnel reserve, critical equipment, management ability, management formalization, project management capacity,
ability of communication and cooperation, concession duration, risk management
ability, maintenance ability, relevant experience, financing experience, constructing
experience, operating experience, credit level, enterprise qualification, honor on
projects, social reputation, government guarantee, legal guarantee, approval guarantee, government support, political support, interest rate guarantee, price guarantee,
government credibility, government risk-sharing, restriction of competition, information transparency, contract spirits, and risk-taking, are given in Table 15.2 using a
triangular fuzzy linguistic scale. Also, for the determination of the importance degree
of the criteria, the linguistic fuzzy scale has been used. However, the Yager index is
used for converting the triangular fuzzy numbers to a single point.
The most preferable alternatives are expected to have a maximum financial
strength, maximum capital strength, maximum technical ability etc.…Lastly, we
used the visual PROMETHEE decision lab program with Gaussian preference function for each criterion given for ranking the PPPs alternatives. The net ranking results
of the selected PPPs are presented in Table 15.3.
With a net flow of 0.0097, Design-Build-Finance is the most effective PPP contract
and with a 0.0068 net flow, Operation and Maintenance contract is the second most
effective PPP contract based on the given parameters and their importance degree.
In Fig. 15.1, the criteria that are above the zero value show the strength of the alternatives, while the criteria below the zero value show the weaknesses of the alternatives. These results provide very important information about the given PPP contracts.
This result has been obtained with the given importance level of the parameters.
15.9 Conclusion
In this study, we proposed a fuzzy-based multi-criteria decision-making technique,
PROMETHEE, for the analysis of public private partnership contracts. It provides
researchers a good understanding about the advantages and disadvantages about
the selected commonly used PPPs. The results showed that, Design-Build-Finance,
Operation and Maintenance, Build–Own–Operate–Transfer are the top three most
effective PPP contracts, while Build–Operate–Transfer, Design–Build, Build–Own–
Operate contracts are the three least effective PPP contracts. Decision-makers could
also obtain more sensitive ranking results by re-arranging the importance of the
parameters, or by adding more parameters or alternatives.
149
In this study, based on the selected criteria and their importance levels, the best
public private partnership contract will be determined with the same methodology.
The selected parameters of the public private partnership contract, including financial
strength, capital strength, financing capacity, financial guarantee, technical ability,
advanced technology, project implementation plans, personnel reserve, critical equipment, management ability, management formalization, project management capacity,
ability of communication and cooperation, concession duration, risk management
ability, maintenance ability, relevant experience, financing experience, constructing
experience, operating experience, credit level, enterprise qualification, honor on
projects, social reputation, government guarantee, legal guarantee, approval guarantee, government support, political support, interest rate guarantee, price guarantee,
government credibility, government risk-sharing, restriction of competition, information transparency, contract spirits, and risk-taking, are given in Table 15.2 using a
triangular fuzzy linguistic scale. Also, for the determination of the importance degree
of the criteria, the linguistic fuzzy scale has been used. However, the Yager index is
used for converting the triangular fuzzy numbers to a single point.
The most preferable alternatives are expected to have a maximum financial
strength, maximum capital strength, maximum technical ability etc.…Lastly, we
used the visual PROMETHEE decision lab program with Gaussian preference function for each criterion given for ranking the PPPs alternatives. The net ranking results
of the selected PPPs are presented in Table 15.3.
With a net flow of 0.0097, Design-Build-Finance is the most effective PPP contract
and with a 0.0068 net flow, Operation and Maintenance contract is the second most
effective PPP contract based on the given parameters and their importance degree.
In Fig. 15.1, the criteria that are above the zero value show the strength of the alternatives, while the criteria below the zero value show the weaknesses of the alternatives. These results provide very important information about the given PPP contracts.
This result has been obtained with the given importance level of the parameters.
15.9 Conclusion
In this study, we proposed a fuzzy-based multi-criteria decision-making technique,
PROMETHEE, for the analysis of public private partnership contracts. It provides
researchers a good understanding about the advantages and disadvantages about
the selected commonly used PPPs. The results showed that, Design-Build-Finance,
Operation and Maintenance, Build–Own–Operate–Transfer are the top three most
effective PPP contracts, while Build–Operate–Transfer, Design–Build, Build–Own–
Operate contracts are the three least effective PPP contracts. Decision-makers could
also obtain more sensitive ranking results by re-arranging the importance of the
parameters, or by adding more parameters or alternatives.