Investigating the Role of Government in Reducing Delays in Development projects within Public-Private Partnership Models in Iran

Public sector development projects are being completed with many delays, and there are still many uncompleted projects in the country. One of the ways to overcome this issue is to use public-private partnership models that have been considered in the Sixth Development Plan in Iran. However, the success of these models requires playing role by government properly. In this paper, in the form of a theoretical and analytical model, the risks arising from the non-allocation of capital credits to the lagged infrastructure projects are investigated. The result of the study is that in public-private partnership models, it is necessary to invest fully in the non-governmental sector. Public sector is merely subject to the commencement of the period, which may be in the form of land acquisition or subdivision or similar projects, and not subject to annual construction allocations. In this case, it is optimal for the government to invest and spend, rather than directly participate in the project's construction years, through wages, services and expenses by contributing through the annual budgets. In this way, government participates in the investment and acts as a service buyer instead of investing directly in infrastructure. As a result, the required credits are transferred from the development budget (acquisition of capital assets) to the current budget (expenditure). In addition, the opportunity cost of delays in the exploitation of infrastructure plans has been calculated. This computational framework can be considered as one of the criteria for the allocation and pricing of government projects in the form of public-private partnership models.