Investment possibility based models for public–private partnerships in water projects

Abstract

One of the key issues that govern the success to invest is creating prospects for the return of investment. However, this is often hampered by a lack of research in determining the region or the area that has the potential for such a project delivery method, and the ability to repay the loan has not been considered. Developing positive cash flow projects depends on the inclination and ability of the customers to pay for the offered services. The aim of this paper is to (i) investigate the effect of Gross National Income (GNI) and the percentage of the population with access to potable water on selection of candidate countries for public–private partnership (PPP) investment in water projects and (ii) model the relationship between (GNI) and the percentage of the population with access to potable water and candidate countries. Four models have been developed to categorize the countries into investment groups. Data used in this paper, as well as the percentage of their respective populations that have access to potable water, were collected from 195 countries. K-means and discriminant analysis techniques have been used to build four investment decision making models. These models have been validated using real data from 40 countries and are helping PPP developers and investors select the region or area that has access to potable water and the ability to repay the loan using GNI.