Barriers to Attracting Private Sector Investment in Public Road Infrastructure Projects in the Developing Country of Iran

Abstract

Private sector investment, the mainstream financing method for procuring public road transport development projects, has encountered several profound difficulties and risks during execution, particularly in developing countries. However, there needs to be more extensive investigations on the major barriers facing road transport infrastructure projects in these countries. In this vein, the present study aims to identify and assess the perceived barriers inhibiting private sector investment in delivering public road transport infrastructure projects in the developing country of Iran. The research method adopted is based on a descriptive survey with a three-round Delphi technique with 35 experts from both the private and public sector in Iran. According to the research study results, four main groups of legal and organizational, political, economic, and operational barriers have been found to significantly impact the attraction of private sector investment in such projects. The three most significant obstacles for public road transport infrastructure projects in developing countries include: (i) a lack of financial and investment safety; (ii) a lack of proficient managers and policies of public organizations in order to facilitate the process of privatization; and (iii) corruption in the privatization process. The survey findings can help the government and policymakers to eliminate or alleviate the potential barriers towards private sector participation in future public road infrastructure projects, particularly in those developing countries such as Iran.