The Theory and Practice of Unsolicited Proposals for PPPs: Hidden Fallacies, Undervalued Gains, and Unintended Consequences

Abstract

Public-Private Partnerships (PPPs) have become a favored method for executing large-scale infrastructure projects globally, leveraging private sector expertise and funding to address public sector constraints. Traditionally, PPPs have been initiated through solicited proposals (SPs), in which the public sector defines project parameters and invites competitive bids. However, unsolicited proposals (USPs) have emerged as an alternative, allowing private entities to propose projects independently, with the potential to introduce innovation and expedite project delivery. This study critically examines the USP processes and outcomes in two mature national PPP markets. Using a multimethod approach, including a multiple case study approach, combining analysis of more than 1,300 USP submissions with qualitative insights from semistructured interviews, contractual documents, project reports, and regulatory frameworks, this research uncovers fallacies, unintended consequences, and gains associated with USPs, revealing significant gaps between theoretical expectations and real-world outcomes in the two countries analyzed. USPs shift the responsibility for project planning to private proponents, introducing unintended consequences for financial viability, social feasibility, and long-term sustainability. Beyond identifying structural pitfalls and unintended consequences, this study also highlights gains associated with USPs, particularly in terms of lower demand volatility and longer concession periods, which contribute to greater financial stability and project bankability.