شناسایی نقاط قوت، ضعف، فرصت ها و تهدیدها به TOT و مدل های کسب و کار واگذاری در بازار آب در چین

This study attempts to enhance the understanding of the two emerging public–private partnership (PPP) business models – Transfer-Operate-Transfer (TOT) and divestiture – in the context of Chinese water sector. Foreign investors aiming to enter or expand their share in the market need to select an optimal PPP model between competing ones through a strengths, weaknesses, opportunities, and threats (SWOTs) analysis. For the purpose, we employ the triangulation approach consisting of an opinion survey to measure the level of consensus on each of a total of eleven SWOT factors surrounding TOT and divestiture models, and in-depth case studies on the two-representative TOT and divestiture projects. Our assessments indicate the emergence of a strong consensus between interviewees regarding bid premium, financial burden, and bidding method in TOT and fixed-return provisions, operational management efficiency, majority control, and equity transfer proportion in divestiture. However, it is advised that foreign investors should be flexible in interpreting the factors and respond them at the solution level considering a project-specific environment.

The Chinese water sector faces many challenges, such as the rampant discharge of wastewater from households and industry, overexploitation of underground water, low efficiency in water use, and under-investments in water and sanitation services (Chen, 2009 and Yang and Teng, 2008). In the late 1990s, these complex challenges led the Chinese government to allow private sector participation in the effective management and operation of water and wastewater plants monopolised by the public sector (Choi et al., 2010 and Meng et al., 2011). Public–private partnership (PPP) is a remarkable business model by which governments choose to overcome these problems in cooperation with private firms. In this model, firms design, integrate, and deliver complex systems and then finance and operate the built environment for a contracted period. The PPP business model flows from the evolution of infrastructure privatisation, the origin of which can be traced back to the concept of optimising public administration, also known as the ‘new public management’ (Alfen, 2009). Build-Operate-Transfer (BOT) is one of the most frequently used PPP business models. It fits perfectly into the definition of the integrated solutions (IS) approach, a collective offering of goods, services, knowledge, support, and self-service for customers with a keen interest in the life-cycle costs of their investments (Kujala et al., 2011). In infrastructure development projects such as power, transport, telecommunication, and process plants, the trend towards IS has been attributed to the emergence of BOT in the 1980s (Brady et al., 2005). In contrast to the generic four-phase project life-cycle (concept, definition, execution, and closeout), IS delivery projects extend projects' timescale backwards into the pre-bid phases and forward beyond the post-construction phase into the operational life of the built environment designed for user needs (Brady et al., 2005). In project-based firms, this approach follows the definition of ‘full-service’ solutions combining traditional transactional projects associated with minimum product services into operational and management (O&M) services to offer one integrated life-cycle value proposition (Brady et al., 2005 and Kujala et al., 2011). Although up to the late 1990s, a few PPP projects were implemented in the Chinese water sector, 2002 was a turning point for foreign investors willing to enter a new market: the entire municipal water service sector, including water distribution networks, were opened to foreign investment. Since then, foreign investors have been able to maximise the project operation efficiency by utilising their competencies in the distribution side of the water business (Ganesan et al., 2005 and GWI, 2004). By extending their services into O&M of the installed plant and occupying a larger share of the customers' businesses, they have enhanced the possibility of capturing a larger portion of the overall value stream (Davies, 2004). From 1990 to 2009, PPP water projects gained increasing popularity in the market and more than 500 projects utilised the BOT, transfer-operate-transfer (TOT), and divestiture business models. Market analyses suggest that, while China's water market has utilised BOT as extensively as have other developing countries, PPP project types such as TOT and divestiture are attracting attention because these accommodate the needs of local governments and private investors (ICF International, 2008 and Zhong et al., 2008). The TOT business model is a type of concession in which a private entity takes over the ownership and operating rights of a state-owned water company to rehabilitate and operate an existing facility at its own risk and then returns ownership to the local government at the end of the contract period. The divestiture business model is an acquisition whereby a private entity buys an equity stake in the state-owned water companies through asset sales; the divestiture can be either full or partial, depending on the percentage of equity transferred (PPI On-line Database, 2008). The BOT model is appropriate for privately financed projects and the TOT model for existing projects already in operation (Meng et al., 2011). Divestiture is suitable for a state-owned water supply company willing to enhance its services, including the purification of raw water, distribution and sale of potable water via pipeline networks, and enhanced management. In both TOT and divestiture, the major interest of the private companies is the long-term operation of the acquired plant or waterworks company rather than participation in construction. Among the studies focusing on PPP in the construction industry, the major focus is on either the BOT business model or large-scale BOT case studies, as exemplified in studies on the water sector (Chen, 2009, Qiao et al., 2001, Senturk et al., 2004, Zeng et al., 2008 and Zhong and Fu, 2008). This view is strongly supported by Al-Sharif and Kaka (2004) and Tang et al. (2009); they reviewed PPP articles in the leading construction management journals and affirmed that none dealt with the important aspects of either PPP business models or projects other than BOT. Lam (1999) briefly addressed a few residual risks related to a telecommunications TOT project and a water privatisation project. Meng et al. (2011) proposed the critical success factors for TOT water supply projects in China but failed to differentiate between TOT and divestiture projects. There is a paucity of information on the key features of successful TOT and divestiture water projects in terms of risk management and market participation. For example, many Korean engineering and construction companies and multinational manufacturers such as LG, Samsung, and SK are eager to participate in the Chinese water market via PPP models. However, few practitioners have an in-depth understanding on key internal and external strategic issues related to successful TOT and divestiture deals. Foreign firms having specialisation in water projects need to fully understand and utilise the strengths and business opportunities of the TOT and divestiture business models to successfully participate in the market, recognise and avoid the weaknesses of the models, and avoid the dangers identified through experience. A clear understanding of the current Chinese water market and a strengths, weaknesses, opportunities and threats (SWOT) analysis of the two emerging models will lead to well informed decision-making on market participation and successful prearranging of the identified SWOT issues prior to project contracting. This study thus attempts to fill the research gap concerning PPP business models in China's water market with the following three research questions: • Among the various PPP business models, what are the different PPP business models implemented by water project firms in the Chinese water market? • What are the internal and external issues surrounding the TOT and divestiture models in terms of their strengths, weaknesses, opportunities, and threats (or constraints)? • How do water professionals perceive those features? Are the features applicable to all TOT and divestiture projects?

In China, the number of PPP water projects has increased rapidly since the opening up of the entire municipal water service sector to foreign investment and that the PPP approach is a sustainable business model for China's water sector. The evolution of PPP business models is the outcome of cooperative efforts by the public and private sectors in response to continuously changing environments and market needs. Nevertheless, international scholars and market professionals have failed to add value to the current PPP literature concerning TOT and divestiture, the two emerging forms, or provide a mechanism for preventing the inherent and external project risks. From the foreign investor's point of view, they need to select an optimal PPP business model based on a complete understanding on the SWOT factors inherent in the TOT and divestiture models considering outer business environment. Although the existing business model analysis framework does not well accommodate the M&A solution approach such as divestiture involving partial or full equity transfer, the framework is useful in categorising various types of models and conceptualising them for a better understanding of their characteristics. The market strategy decides how a business model is to be utilised by examining risks and market changes, including the competition, a firm's position, and the customer's situation. However, a business model alone cannot provide a complete view of the model's applicability in a specific market segment or of strategy generation for a project-based firm. In this context, this study has conducted an opinion survey on eleven SWOT factors identified through rigorous literature reviews, followed by an in-depth analysis of the two representative case studies on water project firms in the Chinese water market. This triangulation approach combining the quantitative analysis (i.e. opinion survey on the selected SWOTs) and the qualitative analysis (i.e. representative case studies) gives a unique insight into the selection of an optimal PPP business model and strategy planning for market entrance or expansion. The survey results from the selected 11 SWOTs explain that some features are highly applicable to real projects (namely the Tier 1 and 2 SWOT factors), whereas others (namely Tier 3 SWOT factors) require the user's discretion. In detail, our assessments based on the VR and ID indicate the emergence of a strong consensus between interviewees regarding bid premium, financial burden, and bidding method in TOT and fixed-return provisions, operational management efficiency, majority control, and equity transfer proportion in divestiture. The preference of local governments for TOT and divestiture models to, for example, relieve their financial burden, maintain management control, and enhance operational efficiency may also boost the utilisation of the models in the market. In the divestiture model, the avoidance of an insistence on fixed-return provisions may help guide private investors through the strict internal investment guidelines while securing a greater potential for profits by engaging in both the operation and distribution sides. However, it is our opinion that foreign investors should be flexible in interpreting the SWOT factors and respond them at the solution level in a project-specific environment. For example, with regard to high premium issue in TOT and divestiture models, our finding is that most of the project with that problem involved seemed to be highly profitable ones or have strategic importance in creating new business opportunities. From a different perspective, we should also acknowledge that any hostile bid or the highest bid might lead to ‘Winner's Curse' type situations in which private service provider strives to raise the rate as much as possible. Our evaluation on the high bid premium issue does not imply that TOT and divestiture models systematically cause such upward bias of tender prices always. In a similar fashion, with regard to industry development issue, adopting more TOT projects in a region severely short of wastewater treatment capacity could be a driving force for economic development in that region in spite of the lack of consensus on the issue as found in our opinion survey. The excessively high premiums, inadequacy of the asset evaluation system, transfer of the labour restructuring burden to the private investor, difficulty of tariff adjustments under the cross subsidy payment structure, inconsistent application of the equity transfer rate, and fundraising-oriented bidding methods have not been closely studied in international PPP literature. Future research needs to embrace those issues in a more concrete way and delineate the optimal mid- and long-term market penetration or expansion strategy plans based on the SWOT identified. The extended implication is that the Chinese government can supplement the identified weaknesses and threats to establish a more solid legal and regulatory environment by which it can attract private investment in the water sector. Moreover, third countries may reference those SWOT factors when constructing an institutional framework for adopting a range of PPP models in their market, as demonstrated by the Chinese water sector.