The formulation of Public-Private Partnership projects for infrastructure development in Brazil: an institutional analysis of the Municipality of Fortaleza

There are strong indications that Public-Private Partnership (PPP) will remain the preferred policy tool for provision of infrastructure development in Brazil, involving private sector participation in the design, construction and operation stages of public infrastructure projects. For PPP project formulation, governments in Brazil have increasingly relied on the Procedure for Request of Interest (PRI), in which project design costs are transferred to the private sector, and actors engage in informal pre-tendering interactions since no formal contract binds them in the process. However, many PRI cases are still struggling to complete the pre-tendering stage or have failed entirely, and there is evidence indicating problems with the elements currently used to arrange PPP formulation processes. This research, therefore, was undertaken to explore why many cases are not finishing the PRI pre-tendering process by unpacking the unclear workings of actor-relations at this stage. Since the PRI process highly depends on interactions, this research explored the dynamics of actor-relations in the formulation of an infrastructure PPP project that used the PRI mechanism and completed the pre-tendering stage in the municipality of Fortaleza. From an institutional perspective and using a qualitative approach based on 34 interviews as primary data collection method, this research focused on the adjustments in practices and perceptions, as well as on the institutional framework influencing the process. The findings indicate that many PRI cases have not been successful because the policy instrument largely focuses on structures and neglects the intrinsic and socially constructed elements of the process. The findings also indicate that the PRI formulation of infrastructure PPP projects requires a balance between formal and informal elements, between structures and internally developed “soft” control mechanisms and between guidance and strategic flexibility, as well as the recognition of the complexity involved and the contextual embeddedness of actor-relations for PPP formulation.