Dispute root causes and prevention in Iranian public-private partnership projects: a causal-predictive model

Purpose: Public–private partnerships (PPPs) are notoriously prone to disputes among stakeholders, some of which may unduly jeopardize contract performance. Contract disputes arising in Iran are often due to inefficiency of PPP concession agreements and practice. This study presents a causal-predictive model of the root causes and preventive measures for inter-organization disputes to enhance the likelihood of achieving desirable performance in PPP projects. Design/methodology/approach: A theoretical “causal-predictive” model was developed with fourteen hypotheses based on extant literature and contractual agency theory, which resulted in the creation of a pool of 110 published items. Data were obtained from a questionnaire survey with 75 valid responses, completed by 4 stratified groups of Iranian PPP experts. Partial least square structural equation modeling (PLS-SEM) was used for validating the proposed model via a case study. Findings: Results reveal that the main three factors of PPP desirable performance are as follows: on-time project completion, high quality of activities/products and services for public satisfaction. Further, the most influential factors of the lifecycle problems, construction stage, and preferred risk allocation included risk misallocation, improper payment mechanism and failure to facilitate a timely approval process. Originality/value: For researchers, the findings contribute to the theory of contractual agency; specifically, how different influences among the model's elements lead to better PPP performance. In practical terms, proposed outcome-based strategies will inform PPP stakeholders to avoid dispute occurrence and thus improve the time, quality and services of projects.