International Journal of Science and Research (IJSR) ISSN (Online): 2319-7064 Volume 3 Issue 3, March 2014 www.ijsr.net Factors for Implementing Public-Private Partnership (PPP) in the Development Process: Stakeholders’ Perspective from Ethiopia Teshome Tafesse Beyene Ethiopian Civil Service University, P.O.Box 22811 - 1000, Addis Ababa, Ethiopia Abstract: This paper presents the findings of a study that assessed factors for adopting PPP in public service delivery and development projects in Ethiopia. A questionnaire survey was conducted considering professionals and practitioners from different institutions. The survey respondents were selected individuals with hands-on experience in PPP related issues and private sector development programs. They were asked to rate the relative importance of the identified six factors on the basis of Likert scale style. The data were analyzed using econometrics software - Stata version 12 to calculate mean score ranking, and an independent sample t-test. The findings of the top three ranks were investigated. Ranked top by the survey respondents was the ‘existence of PPP specific legal framework (MS=4.8), followed by ‘Existence of PPP dedicated Public Agency’ (MS=4.6), and the third was ‘Government Guarantee’ (MS=4.4). The rankings show that in general the prevalence of legal and institutional framework and also governments’ willingness to provide ‘guarantee’ are the most important factors for the implementation of PPP in development projects and public service delivery activities. The mean comparison test result shows the presence of significant difference in three factors among the private and public sector respondents. These findings provide an idea of the factors that could attract potential partners to engage in PPP projects. The findings indicate that the stakeholders from different sectors and levels have more or less similar perception and opinion regarding how the government should attract partners to engage in PPP arrangements in the process of development and public service delivery. Keywords: Public Private Partnership (PPP), Development, Projects. 1. Introduction Government is a traditional provider of public services and an operator of public service delivery institutions and development projects using resources from public sources i.e., taxes and levy. However, the ever-increasing disparity between the capacity of the public sector to generate resources and the public demand for new facilities has forced governments to look for new funding methods and sources. Public private partnership (PPP) as a new funding method is an increasingly popular phenomenon and a global trend [1]. PPP is a long-term contractual arrangement between a public-sector agency and a private-sector entrepreneur whereby resources and risks are shared for the purpose of developing a public facility. For the public sector, the principal aim of a PPP is to achieve value for money [2]. In relation to this [3], elaborate that the public sector can secure value for money in the public service delivery, While ensuring that the PPP partnering private-sector entities meet their contractual obligations properly and efficiently. As a consequence, many countries are now contemplating PPP as an arrangement between public and private sectors to finance, design, build, operate and maintain public infrastructure, community facilities and related development projects. Though the potential advantage of PPPs in public service delivery and development process is well understood by most public policy makers and professionals around the globe, the extent of adopting PPP in public service delivery and development process in countries around the world in general and developing countries in particular is quite slow. Perhaps being unaware of some of the factors may preclude the enablers of the system from creating conducive environment for PPP implementation. Particularly developing countries who are striving hard to alleviate poverty and bring about development should effectively mobilize their resources and use their capacities for the success of their development goals. In light of this, Ethiopia, as a developing country striving hard to develop, should work harder to mobilize its available capacities from all sectors to keep forward its development targets. PPP is one of the best potential mechanisms to mobilize resources (be it of public, private and civil society) in the form of collective action towards development and efficient public service delivery. Hence, in line with this argument, it is imperative to study what specific factors affect adoption of PPP in Ethiopia from stakeholder’s perspective. Studies by [4] in UK and [5] in Hong Kong and Australia tried to investigate the attractive factors for adopting PPP in their respective study area. The study in UK revealed that the top three attractive factors were "transfer of risk to private sector", "solving the problem of public sector budget constraints" and "non-recourse or limited recourse public funding" [4]. The same study examined the differences between the public and private sectors respondents' perceptions on the importance of the attractive factors and reported that there are no significant differences in perception except for a few factors that are not among the top three attractive factors [4] , [6]. A similar study done by [5] in Hong Kong and Australia reported that the top three attractive factors for PPP in Hong Kong include "provide an integrated solution for public services", "facilitate creative and innovative approaches" and "solve the problem of public sector budget restraint". The top three attractive PPP factors for Australian respondents were Paper ID: 020131320 792