The Cooperation Model For Private Equity Consortia In PPP Rail Transit Projects

In PPP rail transit projects featuring a large scale,long duration as well as considerable investment and often involving multiple fields as well as complicated technologies,the private investors are responsible for not only the investment,but the construction,operation and maintenance of the project at their own risk,which can hardly be carried out by a single company.Therefore,several companies having edges in different fields usually work together to form a consortium.However,in many PPP rail transit projects,the cooperation within private equity consortia often culminate in failure due to the breakdown of relationship between companies arising from unclear responsibility division in contract terms and lack of communication in the face of problems.This paper tackles existing problems in cooperation between private investors and builds a comprehensive cooperation model for private equity consortia from the perspective of private investors in PPP projects,so as to facilitate the cooperation within private equity consortia.This paper consists of three parts:(1)Based on the theory of strategic alliance,combined with the theory of resource dependence,transaction cost theory and project governance theory,the theoretical analysis framework of the private equity consortia of PPP projects is constructed.As for the consortium cooperation between social capital parties in PPP projects,this paper analyzes five variables including partner selection,allocation of control rights,relationship governance,contract governance and success of cooperation.Through literature analysis and interviews,the index system of PPP rail transit project consortium cooperation of private capital is constructed.(2)Based on the resource dependence theory,transaction cost theory and strategic alliance theory,combining the literature,this paper proposes a hypothesis about how the "partner selection--allocation of control rights--relational governance--contractual governance--successful cooperation" mechanism works.This paper adopts a quantitative structural equation modeling(SEM)method and the questionnaire method of data collection.After selecting valid data,this paper makes the descriptive statistical analysis as well as correlation analysis,and tests the reliability and validity of measures;(3)Using Amos,this paper builds the cooperation model for private equity consortia in PPP projects and reveals how the "partner selection--allocation of control rights--relational governance--contractual governance--successful cooperation" mechanism works,thus proving the proposed hypothesis.The results show that contractual governance and relational governance,facilitate successful cooperation,in which the latter plays a more important role and contractual governance acts as a mediator between relational governance and successful cooperation.The cooperation within private equity consortia in PPP projects starts with partner selection,which will positively affect relational governance and allocation of control rights.The allocation of control rights,which is key in this mechanism,has a positive impact on contractual governance and intervenes between relational governance and contractual governance.Relational governance will positively affect the allocation of control rights and contractual governance,and acts as a mediator between partner selection and allocation of control rights.This paper analyzes the cooperation within private equity consortia in PPP rail transit projects with a quantitative methodology and proposes corresponding suggestions and measures to bring about successful cooperation,facilitate the construction of PPP rail transit projects,and enable the private investors gaining strength nowadays to complement each other in resources and bring into full play their advantages for a brighter outlook for profits in the long run.