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Competition in Infrastructure Procurement: Analysis of Waste Management Sector of India

Competition in Infrastructure Procurement: Analysis of Waste Management Sector of India Competition is a crucial instrument in procuring assets and services to bring a competitive private player to the project and ensure value for money. The current literature is silent on the competition effects in municipal infrastructure projects. This study initiates such an understanding by taking Indian projects as a case. This study used mixed method research through 'multiple operationalism'. The analysis is approached in a two-pronged manner. First, a broader perspective through the 'Concentration Ratio' (CR) measure is carried based on India's PPP database. Then, a narrow but deeper perspective is undertaken by examining competition in seven specific cases drawn from the pool of projects for understanding the specific competition and  trends of bidder participation. Project documents collected from field offices provided the evidence for the inquiry. Findings show that the top four firms (CR4) competition ratio is 0.52 in this sector, typically meaning oligopoly with a medium level of concentration wherein the top four firms occupy 52% of the market. But deeper analysis of the bidding trends in specific projects cast doubt on the existence of such a competition and it seems to have poor specific competition.  This points out to the mismatch of market structure (market maturity) and specific competition pattern in the Indian MSW sector. Consequently, number of expression of interests submitted cannot be construed as a measure of specific competition in developing countries particularly for municipal projects.  Also,  unbundling can be adopted as a pro-competition move and enhance the market's maturity for future projects. The study advances the determinants of competition in PPP procurement. The effects of competition at a sectoral level raised significant nuances and practical insights concerning the procurement design of PPP infrastructure in the municipal solid waste sector, which are not offered in extant literature. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of The Institution of Engineers (India):Series A Springer Journals

Competition in Infrastructure Procurement: Analysis of Waste Management Sector of India

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Publisher
Springer Journals
Copyright
Copyright © The Institution of Engineers (India) 2022
ISSN
2250-2149
eISSN
2250-2157
DOI
10.1007/s40030-022-00619-3
Publisher site
See Article on Publisher Site

Abstract

Competition is a crucial instrument in procuring assets and services to bring a competitive private player to the project and ensure value for money. The current literature is silent on the competition effects in municipal infrastructure projects. This study initiates such an understanding by taking Indian projects as a case. This study used mixed method research through 'multiple operationalism'. The analysis is approached in a two-pronged manner. First, a broader perspective through the 'Concentration Ratio' (CR) measure is carried based on India's PPP database. Then, a narrow but deeper perspective is undertaken by examining competition in seven specific cases drawn from the pool of projects for understanding the specific competition and  trends of bidder participation. Project documents collected from field offices provided the evidence for the inquiry. Findings show that the top four firms (CR4) competition ratio is 0.52 in this sector, typically meaning oligopoly with a medium level of concentration wherein the top four firms occupy 52% of the market. But deeper analysis of the bidding trends in specific projects cast doubt on the existence of such a competition and it seems to have poor specific competition.  This points out to the mismatch of market structure (market maturity) and specific competition pattern in the Indian MSW sector. Consequently, number of expression of interests submitted cannot be construed as a measure of specific competition in developing countries particularly for municipal projects.  Also,  unbundling can be adopted as a pro-competition move and enhance the market's maturity for future projects. The study advances the determinants of competition in PPP procurement. The effects of competition at a sectoral level raised significant nuances and practical insights concerning the procurement design of PPP infrastructure in the municipal solid waste sector, which are not offered in extant literature.

Journal

Journal of The Institution of Engineers (India):Series ASpringer Journals

Published: Apr 25, 2022

Keywords: Competition; Public–private partnerships (PPP); Municipal solid waste (MSW) management; Procurement design

References