Reconciliation of investors’ interests while public-private partnership projects portfolio forming

Economic Annals-ХХI: Volume 151, Issue 5-6, Pages: 45-48

Citation information:
Hrytsenko, L., & Boyarko, I. (2015). Reconciliation of investors’ interests while public-private partnership projects portfolio forming. Economic Annals-XXI, 5-6, 45-48. https://ea21journal.world/index.php/ea-v151-11/

Larysa Hrytsenko
D.Sc. (Economics),
Professor,
Ukrainian Academy of Banking
57 Petropavlivska Str., Sumy, 40030, Ukraine
gricenko-l@ukr.net

Iryna Boyarko
PhD (Economics),
Associate Professor,
University of Banking
1 Andriivska Str., Kyiv, 04070, Ukraine
boyarko@ukr.net

Reconciliation of investors’ interests while public-private partnership projects portfolio forming

Abstract. Introduction. From the perspective of researching the problem of assessment an investment attractiveness of public-private partnership (PPP) projects one of the most important methodological problem is scientific justification of approaches to the formation of optimal PPP projects portfolio composition and structure as an instrument of state investment policy realization with regard to public sector and private business cooperation. Purpose of the article is to justify methodological principles of formation of the PPP investment projects portfolio in the context of realization the concept of effective cooperation between state and business in the investment sphere. Methods. In developing proposals for the formation of PPP projects portfolio The economic modelling method was used for developing proposals for the formation of the PPP projects portfolio. Results. An important part of the assessment of the effectiveness of PPP projects infrastructure is taken into account. The consistency of government and business interests in formation of the project portfolio for public funding has been considered. Application of the developed model is based on the discrete multi-objective portfolio optimization. Expert assessment of project compliance to the priorities of state investment policy provides: 1) an opportunity to have an individual system of assessment criteria for the effectiveness of projects by partners who have different economic interests, their investment purposes and acceptable values of the expected effects; 2) a synergistic effect in realization of the PPP projects portfolio; 3) maximization of total effectiveness level of the PPP project portfolio; 4) pareto-optimal maximization of individual assessment of project portfolio effectiveness for each PPP participant; 5) an opportunity to distribute the potential socio-economic benefits between partners; 6) consideration the accordance of projects to the priorities of public investment policy; 7) effective distribution of limited resources; 8) investment risk diversification through providing mutual financing by partners with acceptance of the level of accordance concerning priorities of the state investment policy. Conclusion. The developed proposals to the improvement of methodical support of PPP allow to take into account strategic interests of the government that are declared in official documents, which regulate the state investment policy, ensure effective financing of various PPP projects, increase investment attractiveness of state and business cooperation in the investment sphere by taking advantages of program-target budgeting and optimize in time and space a lack of financial resources on different budget levels .

Keywords: State; Business; Public-Private Partnerships; State Investment Policy; Investment Project; Project Portfolio

JEL Classification: O22; D79; H89

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Received 05.05.2015