Simulation-based dynamic adjustments of prices and subsidies for transportation PPP projects based on stakeholders’ satisfaction

Public–private partnership (PPP) has been well acknowledged by many as an innovative approach to the procurement of public projects. In their long-term concession periods, various uncertain factors lead to the difficulties in implementing the concession contracts. Historical projects have proven that unexpected changes of projects will inevitably result in the adjustment of prices of the private sector and subsidies from the public sector. Therefore, a dynamic price and subsidy adjustment model is desired, to balance the satisfaction of all involved stakeholders (i.e., public sector, private sector, and general public). In the present study, a system dynamics model, which balances the tripartite satisfaction in PPPs, was established. A PPP bridge case study was conducted to demonstrate that the proposed model is applicable and can function for future PPP projects. Model validation, sensitivity analysis, model application, and result analysis were included as well. Further recommendations and conclusions were made to help practitioners to improve the model implementation in transportation PPP projects to increase the likelihood of achieving tripartite satisfaction. This research also sheds light on the price and subsidy adjustments for other types of PPP projects.