Institutional barriers to private participation in infrastructure: The case of electronic toll collection in Taiwan

Public Private Partnerships (PPP) was imported into Taiwan in 1994, with Build Operate Transfer (BOT) as the main approach. Adopting the tool of network analysis, which focuses on the explanation of actor behaviours, this paper aims to illustrate how the use of PPP can be hindered by institutional limitations. It examines the case of the Electronic Toll Collection project, which encountered problems in the procurement process, and was finally ordered by the court to return to the tender stage. The preliminary findings are that the difficulties in using BOT in this case result from: i) government treating PPP as a “free lunch”, assuming that all risks could be transferred to the private sector; ii) insufficient government action to prevent PPP becoming the channel of collusion; iii) the strong public opposition; iv) the incomplete judicial framework for resolving PPP disputes. The conclusion summarises the conflicts between the imported PPP and the existing political; legal, judiciary and social institutions. An important question for further research is whether such conflicts are leading to institutional change which will enable PPP to be used more easily in future.