Estimating the transaction cost indices of public private partnership infrastructure in Ghana (Case study of Kumasi Metropolitan Assembly)

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Public Private Partnership infrastructure projects have existed in the field of procurement for some time now however, it implementation in Ghana is at its early stages implying that transaction cost estimation of PPP projects are yet to be explored. The study focused on estimating Transaction Cost Indices for PPP projects undertaken in the Kumasi Metropolitan Assembly which happens to be the first of its kind in the Ashanti Region. Two supporting objectives were set to address the aim of the study, they are: firstly, identify areas that substantially contribute to transaction cost of PPP projects and secondly, estimation of transaction cost indices of PPP infrastructure projects. The study relied on data from the works department of the Kumasi Metropolitan Assembly on PPP projects concurrently on-going in four of their Sub Metropolitan Assemblies namely Subin, Tafo, Bantama and Kwadaso. They are five (5) projects in all, with most of them being shopping facilities and complexity of the projects varies. Feasibility studies cost tend to be the cost area that substantially contribute higher quota to the Transaction cost of PPP projects in the KMA. Furthermore, the study was able to come out with cost index for all the five (5) projects studied, therefore future projects can rely on the cost index as a guide on transaction cost expenses. Finally, transaction cost threshold was estimated in order to provide a ceiling of estimating the transaction cost index for projects. Therefore, it is recommended that, though private investors pay for the actual cost of the projects MMDAs can also reduce the transaction costs which are incurred during the initial stages of the project. It is recommended that further studies will consider all the Metropolitan, Municipal and District Assembly separately to come out with a transaction cost indices for the respective types of Assemblies.
A thesis submitted to the Department of Building Technology, College of Art and Built Environment in partial fulfillment of the requirements for degree of Master of Science,