Barriers to development of private sector investment in water and sewage industry

authored by: Hadi Sarvari, Daniel W. M. Chan, Nerija Banaitiene, Norhazilan Md Noor, Michael Beer
Abstract: Purpose: Privatization is a complex issue in many developing countries; therefore, it is vital to examine the obstacles that prevent its proper implementation. The goal of this study is to identify and analyze the barriers to private sector investment in the Water and Sewage Industry (WSI) and to suggest effective ways to attract the private investors to this sector. Design/methodology/approach: The obstacles to private sector investment in the WSI were identified by conducting a desktop literature review and interviewing an expert panel, using the fuzzy Delphi technique. The most important barriers were identified and categorized. A structured survey was then developed and distributed to private sector investment experts. The Fuzzy Analytic Hierarchy Process (FAHP) was applied to further examine the responses and to rank the identified barriers. Findings: The results showed that the greatest barrier to privatization is the weakness of insurance companies in controlling investment risks, and the second greatest barrier is the weakness of the country's capitalist culture. A review of recent success stories revealed that these barriers can be overcome with transparent price policies and increased interaction between the public and private sectors, which motivate private investors to invest in the WSI. Originality/value: The elicitation of this study can be useful to both private and public sectors for the development of infrastructure projects, particularly for the WSI.
Organisation(s): Institute for Risk and Reliability
External Organisation(s): Islamic Azad University
Hong Kong Polytechnic University
Vilnius Gediminas Technical University
Universiti Teknologi Malaysia
Type: Article
Journal: Built Environment Project and Asset Management
Volume: 11
Pages: 52-70
No. of pages: 19
ISSN: 2044-124X
Publication date: 26.02.2021
Publication status: Published
Peer reviewed: Yes
ASJC Scopus subject areas: Civil and Structural Engineering, Management Science and Operations Research
Electronic version(s): https://doi.org/10.1108/BEPAM-11-2019-0110 (Access: Closed)