Exploring Public–Private Partnership Scheme in Operation and Maintenance Stage of Railway Project

Herawati Zetha Rahman, Perdana Miraj and Azaria Andreas
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Herawati Zetha Rahman: Department of Civil Engineering, Faculty of Engineering, Pancasila University, DKI Jakarta 12640, Indonesia
Perdana Miraj: Department of Civil Engineering, Faculty of Engineering, Pancasila University, DKI Jakarta 12640, Indonesia
Azaria Andreas: Department of Civil Engineering, Faculty of Engineering, Pancasila University, DKI Jakarta 12640, Indonesia

Sustainability, 2019, vol. 11, issue 22, 1-13

Abstract: Public–private partnership (PPP) has been extensively used in many sectors worldwide to provide alternative funding for public infrastructure. However, limited evidence found that this scheme was successfully adopted in railway transport particularly in the later stage of the project life cycle. Private participation during operation and maintenance stages are worthy of comprehensive research to cope with recovery of public investment and institutionalization problems. This research aims to analyze the potential of unbundling scenarios based on railway components by taking into account the Light Rail Transit (LRT) project in developing countries as the case study. A life cycle cost evaluation and sensitivity analysis were used to formulate a practical and regulatory framework for the macro-level of decision-making modeling. The findings indicate a possible scenario by considering the passenger demand, ticket price, and government support to generate the best option based on net present value (NPV) and internal rate of return (IRR). The proposed alternative recommends an attractive investment return for private interest, encourages lower support for government subsidy, and offers a reasonable tariff for the users. The study also suggests future implications from the adoption of research findings which may affect policy formulation and railway industry as a whole.

Keywords: developing countries; life cycle cost; light rail; transportation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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