Determinants of the Severity of Contract Enforcement in Chinese PPP Projects: From Public Sector’s Perspective

Abstract

In PPP projects, the enforcement of concession contract is of much importance. Thus, this study analyzed the severity of contract enforcement after private sectors violate concession contracts in Chinese PPP projects from the perspective of public sectors. Through 39 in-depth interviews with those working in public sectors under Chinese PPP projects, there were four determinants identified for the severity of contract enforcement in public sectors: the consequence of contract violations, the intention of contract violations, private sectors’ remedies, and private sectors’ prior performance. Furthermore, this study analyzed the intrinsic relationship between the four determinants with trust foundation, destruction, and repair. The findings of this study extend the existing theory on the severity of contract enforcement. For those managers working in public sectors, the findings of this study can help improve their flexibility in contract enforcement, thus contributing to the success of PPP projects.