For smoother PPP processes, it is important to identify the main success factors for PPP project planning and implementation. Rockart (1982) describes these as a "few key areas of activity," where favorable results are necessary for project managers to reach their goals. Because of the complexity of PPP projects, careful preparatory work is needed; this includes a comprehensive feasibility study and thorough economic evaluations of a project's potential (Jamali 2004). Any concerns on transparency and accountability by the public sector partner need to be tackled, and private partners need to be reassured of safe returns on their investments. Sharing the same vision and trust between the parties contributes to successful PPPs.
The challenge is to ensure that the interests of all stakeholders are skillfully negotiated and packaged. Governments need to maintain their involvement through the life of a PPP project, whether as partner or regulator. This is especially necessary for projects where accountability is vital, cost-shifting can be a problem, time frames are long; and where the social aspects of a project are more important than costs (Spackman 2002). A PPP unit is required to fill gaps in projects caused by a lack of coordination between partners, high transaction costs, and institutional shortcomings. PPP units should support competent authorities to get value for money in the procurement and implementation phases of projects (OECD 2012). The Organisation for Economic Co-operation and Development defines a PPP unit as an organization that has been set up with government aid to carry out policy guidance, technical support, capacity building for PPP projects, and project promotion and investment.
The literature identifies an array of factors essential for successful PPP projects. For build-operate-transfer projects, Tiong (1996) identifies six factors for winning these contracts: (i) entrepreneurship and leadership, (ii) identifying the right project, (iii) the private partner's strength in technical matters, (iv) technical solution advantage, (v) financial package differentiation, and (vi) differentiation in guarantees. For Zhang (2005), the success factors are (i) a favorable investment environment, (ii) a project's economic viability, (iii) having a reliable concessionaire with strong technical strength, (iv) a sound financial package, and (v) appropriate risk allocation. Samii, van Wassenhove, and Bhattacharya (2002) cite resource dependency, commitment and common goals, good communication and cooperation between partners, and similar working cultures.
Jamali (2004) underscores the importance of governments providing strong regulatory systems for PPPs, which should include protection from expropriation, arbitration procedures, respect for contract agreements, processes for recovering costs, and making profits proportional to project risks. For Di Lodovico (1998), Pongsiri (2002), and Zouggari (2003), transparent and strong regulatory and legal frameworks are prerequisites for the private sector's participation in PPPs. Strong frameworks also help ensure that PPPs operate efficiently and optimize the use of public resources. ADB (2008) and Trebilcock and Rosenstock (2015) stress the importance of creating a PPP unit to help public partners to disseminate information on PPP projects, and to advise on procurement processes to put them on an equal footing with private partners in PPP negotiations. The World Bank (2007) finds that the efficiency of PPP units is highly correlated with the success of a country's PPP program. For example, implementing PPP projects in the Philippines markedly improved when the Public-Private Partnership Center, the government's PPP unit, was reorganized and strengthened in 2010.
Reyes-Tagle and Garbacik (2016) find that effective government institutions increase the chances of countries having active PPP programs, though this has no effect on the level of government spending on PPPs. The authors note that PPPs can be an immediate remedy for fiscal constraints from initial private sector financing. But, without proper institutional safeguards against corruption, unsustainable fiscal liabilities can be created that will worsen a country's fiscal position.