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The impact of rule of laws on the recovery of distressed PPP infrastructure Projects

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  • Kokkaew, Nakhon
  • Oliveira Cruz, Carlos
  • Alexander, Derek

Abstract

As Public Private Partnerships (PPPs) around the world gain in popularity as a way to finance needed infrastructure, careful study prior to implementing PPP infrastructure projects becomes more important to avoid distress and cancellation in later stages. Unlike traditional infrastructure projects delivered using public finance, PPP projects usually have complex capital structures and multi-party operational control. These parties typically have differing, even diverging goals, which may conflict when faced with operating difficulty. The sponsors of those distressed PPP projects must then renegotiate their contracts with the host government and lenders if the project is to continue operating. This renegotiation occurs in the shadow of local law concerning security interests, contract rights, insolvency and bankruptcy, as parties calibrate their positions to potential downside outcomes. This paper examines the impact of such laws on the distressed PPP infrastructure projects in Thailand. The paper focuses the study on two main contracts commonly found in PPP projects: one between the sponsors and the host government, and the other between the sponsors and the secured lenders.

Suggested Citation

  • Kokkaew, Nakhon & Oliveira Cruz, Carlos & Alexander, Derek, 2015. "The impact of rule of laws on the recovery of distressed PPP infrastructure Projects," MPRA Paper 77494, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:77494
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    References listed on IDEAS

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    Cited by:

    1. Robert Brian Smith & Nucharee Nuchkoom Smith, 2018. "Bilateral Investment Treaties - a Potential Trap for Developing Economies: A Lesson from Thailand," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 4(3), pages 279-292, July.

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    More about this item

    Keywords

    KEYWORDS: distressed PPP projects; PPP laws and regulations.;

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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