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What are the experiences of private partners with the incentive mechanisms in DBFM contracts and how can these experiences affect the performance of DBFM contracts?

Telkamp, Bart E.B. (2022) What are the experiences of private partners with the incentive mechanisms in DBFM contracts and how can these experiences affect the performance of DBFM contracts? Bachelor thesis.

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Abstract

Since 1986 onwards, Public-Private Partnerships became more popular for Rijkswaterstaat to use for road infrastructure in the Netherlands (Eversdijk, 2015). A specific form of Public Private Partnership (PPP) became more popular, the Design, Build, Finance and Maintain (DBFM). In this form of contract, “incentive” mechanisms are present that are expected by the public partner to guide the behaviour and acting of the private party (Verweij & van Meerkerk, 2021) to achieve higher contract performance. However, the experience of the private partner with mechanisms is often overlooked in a DBFM contract in Dutch infrastructure planning (Eversdijk, 2015), while literature suggest that this can be a key factor to a successful/unsuccessful PPP contract. Therefore, the main research question in this qualitative research is the following: “What are the experiences of private partners with incentive mechanisms in DBFM contracts and how can these experiences affect the performance of the DBFM contracts?” Answering this question can help improving the functioning of DBFM contract in the future in terms of design and application, thus achieving better contract performance in terms of time, cost, quality, and innovation (Koppenjan et al., 2022) due to being able to identify bottlenecks and problems as well as positives in DBFM contracts from a private partners’ point of view. A literature review and semi-structured interview are conducted. In the literature, the following incentive mechanisms for DBFM contacts have been identified: Performance-dependent payment, private financing, contract integration and contract flexibility. To measure the contract performance, the following indicators have been used: cost, time, quality, and innovation performance. The experiences of private actors with the mechanisms and subsequently their effects on the contract performance have been investigated. The results indicate that mostly, the experiences can be linked to the expected positive DBFM performance effect. However, multiple negative experiences were found to strongly influence DBFM contract performance negatively and can lead to suboptimal contract performance if not addressed. Therefore, this research shows that the private partners’ experiences are important in determining the expected performance of DBFM contracts, and that private partners experiences play a significant role in creating both successful DBFM projects, while at the same time also contributing to possible suboptimal performance results; indicating that there is certainly room for performance improvements trough improvement of the negative private experiences discussed.

Item Type: Thesis (Bachelor)
Degree programme: Spatial Planning and Design
Supervisor: Verweij, S.
Date Deposited: 20 Jul 2022 06:51
Last Modified: 20 Jul 2022 06:54
URI: https://frw.studenttheses.ub.rug.nl/id/eprint/3903

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