Adoptability of the PPP models to overcome procurement issues in state sector middle income housing projects in Sri Lanka

Abstract

State-sector middle-income housing construction in Sri Lanka faces major procurement challenges due to the limitations of traditional procurement models. These conventional procurement methods dominate the sector but lack resilience in dealing with economic shocks, material price fluctuations, and weak risk management. Globally, Public-Private Partnerships (PPPs) have emerged as a promising alternative to overcome such issues and are widely applied in countries including Poland, Nigeria, Tanzania, Ghana, India, Malaysia, and China. However, in Sri Lanka, little research has examined the adaptability of PPPs in addressing procurement challenges within state housing projects, creating a significant research gap. Thus, this study investigates the potential of adoptability of PPP models to overcome procurement issues in state- sector middle-income housing projects in Sri Lanka. A qualitative approach was adopted, and two rounds of expert interviews were conducted among professionals in state sector housing procurement using Delphi technique. Manual content analysis was used to explore PPP’s integration and to identify barriers to implementation. Findings revealed fourteen procurement issues in the current system, including bureaucratic delays, lengthy tendering processes, and cost and time overruns. In contrast, nineteen beneficial features of PPPs were identified, such as risk-sharing, value for money, collaboration, and the use of private sector legal entities. Yet, sixteen major barriers hinder PPP adoption in Sri Lanka, including financial constraints, regulatory challenges, weak institutional frameworks, and unpredictable economic conditions. To address these challenges, the study proposes measures such as creating Special Purpose Vehicles (SPVs), promoting continuous public-private collaboration, and leveraging private investment to reduce public financial risk. Recommendations include developing standardized PPP financial models, transparent procurement platforms, and a centralized knowledge hub. The research highlights that PPP housing models in Sri Lanka require clear, standardized processes to provide confidence to stakeholders and ensure effective implementation.