Governance of public-private partnerships: Lessons learned from an Albanian case

Abstract

Service infrastructure public-private partnerships (PPPs) in Albania have revealed significant governance problems. The aim of this research is to examine the technical-rational and social contractual issues of PPPs within the broad context of risk, and accordingly propose a governance framework. The research builds on international PPP literature to develop an analytical conceptualization. It uses document review and interviews to construct a case study of a Concession Contract for the Water Supply in Elbasan, Albania, which became operational in October 2002 and failed in December 2007. The research indicates that failure within this so-called PPP largely occurred within the technical-rational governance system due to unforeseen risks. This led to a breakdown in the social contract, through political risk. It is required a governance system that enhances risk assessment and diminishes the likelihood of negative political behaviors.