Contents lists available at ScienceDirect Transportation Research Part A journal homepage: www.elsevier.com/locate/tra Public private partnerships in the provision of tolled roads: Shared value creation, trust and control Demi Chung a , David A. Hensher b, ⁎ a School of Accounting, Business School, University of New South Wales, Sydney, Australia b The Institute of Transport and Logistics Studies, The University of Sydney Business School, Australia ARTICLEINFO Keywords: Public private partnership Value creation Transaction cost economics Mitigating controls Trust Tollroad concession ABSTRACT Public private partnerships are rationalized on shared value creation by combining public sector management and oversight with private sector resources for a direct provision of a public good or service. Yet little is known about what are the sources of value and the effects of contract control mechanisms for value appropriation. This paper explores this issue from the perspectives of both public sector agencies and private sector firms involved in the provision of toll roads. Using data collected from a stated choice experiment on toll road participation to obtain a composite measure of resource values, we find that resource values have little influence on decisions to form a partnership, while partner’s (un)trustworthiness and social activism by external stakeholders have a discernible effect on their decisions. Mitigating controls moderate these influences. An internal coordination framework within the public organization and the enactment of institu- tional policy can help to reap the most from the combined resources for shared value creation, particularly when trust is yet to be established during the contracting phase. 1. Introduction Public-Private-Partnerships (PPPs) are an innovative way of inter-sector collaboration that combine public sector management and oversight with private sector resources, in terms of skills and competencies for the direct provision of a public good or service, such as transportation, health, education, and penitentiary (Kivleniece and Quelin, 2012). Typically, a private firm designs, builds, finances and operates a significant capital asset, e.g., a road, a hospital, a school or a prison, and must ensure these assets are available for providing related services to an acceptable standard (Chung, 2009). The public agency, in turn, engages primarily in coordination and enforcement functions to ensure the behaviour of the private firm and the output of the PPP are aligned with public policy objectives (Rangan et al., 2006; Kivleniece and Quelin, 2012). Value is created and captured primarily through two means: (i) a risk sharing strategy to allocate risks to partners that are best aligned with the resources of the respective partner(s); and (ii) the alignment of control mechanisms with transaction attributes (Infrastructure Australia, 2008; HM Treasury, 2012; Byoun and Xu, 2014). In spite of their proliferation in recent decades, the jury is still out on who contributes to what and how benefits are sought and safeguarded by respective partners. In undertaking our research, focussed on toll roads, we integrate theories of value creation and transaction cost economics (TCE), as defined below. Our first objective is to investigate the sources of value, in terms of the com- petencies and skills in risk management possessed by one partner, that explain the PPP participation of the other partner. To achieve this aim, we use a stated choice survey (see Chung and Hensher, 2015a) to construct a composite measure of value creation (VC) https://doi.org/10.1016/j.tra.2018.08.038 Received 6 October 2017; Received in revised form 25 August 2018; Accepted 31 August 2018 ⁎ Corresponding author. E-mail addresses: Demi.chung@unsw.edu.au (D. Chung), David.Hensher@sydney.edu.au (D.A. Hensher). Transportation Research Part A 118 (2018) 341–359 0965-8564/ © 2018 Elsevier Ltd. All rights reserved. T