A Financial Analysis of John Laing - Case Study Example

The paper "A Financial Analysis of John Laing" is a good example of a literature review on finance and accounting. This chapter intends to provide an in-depth idea about public-private partnerships (PPP). The concepts of PPP, its benefits, and demerits will be discussed in this portion of the research. In addition, the evolvement of PPP in the UK will also be briefly mentioned here. In the later part of the chapter, the brief background of John Laing and its subsidiaries will be discussed. Hence, it can be inferred that the chapter will help the researcher to procure adequate knowledge about the concerned topic and the same will enable the researcher to follow correct paths in the latter portion of the study.

2.2 Theories of PPP   
2.2.1 Definitions and characteristics of Public-Private Partnership (PPP)

Public-Private Partnership (PPP) is termed as an agreement between the government and one or more private parties to complete a project where the objectives of both parties are aligned (Navarro-Espigares and Martin-Segura, 2011). On the other hand, Akintoye, Edwards, and Hardcastle (2006) defined PPP as a long-term contract between a private party and the government body for offering a significant public asset or service.  Bel and Costas (2006) identified PPP as an agreement between the private and public companies for sharing skills and assets during a capital expenditure-based project.

The private parties can be the operators or financiers of the projects. In the PPP-based projects, the private parties operate in such a manner that the profitability of the public partners is also been maintained. However, in this regard, Dijkgraaf and Gradus (2007) argued that one of the most significant benefits of the PPP mode of operation is that it ensures the transfer of risks for the involved parties. Akintoye, et al. (2009) mentioned that PPP-based projects offer value for money to the customers with the help of combined benefits derived from the flexible consultation, tendering, and risk allocation among the two involved parties. Proper risk management and risk sharing can be considered as one of the prime characterizers of PPP-based projects. On the other hand, long-tenure (more than 10 years) is another important feature of PPP-based projects.