Professional Documents
Culture Documents
Article
Project Sustainability and Public-Private Partnership: The Role
of Government Relation Orientation and Project Governance
Guoli Feng 1, * , Shengyue Hao 1 and Xiaoguang Li 2
1 School of Economics and Management, Beijing Jiaotong University, Beijing 100044, China;
haoshyue@bjtu.edu.cn
2 School of Economics, Peking University, Beijing 100871, China; xiaoguangli1987@163.com
* Correspondence: fengguoli@bjtu.edu.cn; Tel.: +86-188-1144-3439
Abstract: In China, the government is not only responsible for the supply of local public facilities and
services, but also the maker of public-private-partnership (PPP) policies and systems, and has a greater
voice in PPP projects. The attitude and behavior of the government are essential to the sustainable
development of PPP projects. This research focuses on the deep-seated connotation of the external
attitude and behavior of the government, that is, the impact mechanism and path of the government’s
relation orientation on project sustainability. First, enrich the connotation of the government’s
relation orientation, project sustainability, and project governance, and improve the measurement
scale. Then, construct a structural equation model, collect data through questionnaires, and explore
the path of the government’s relation orientation on project sustainability. The research results
show that: (1) different relation orientations have different effects on project governance and project
sustainability, among which instrumental relation orientation and rent-seeking relation orientation
will directly affect project sustainability; (2) relationship governance and contract governance play
different mediating roles. The research results provide new ideas and perspectives for improving
Citation: Feng, G.; Hao, S.; Li, X.
project governance mechanisms and project sustainability in the practice of PPP projects in China.
Project Sustainability and
Public-Private Partnership: The Role
Keywords: public-private partnership; sustainability; relation orientation; project governance
of Government Relation Orientation
and Project Governance.
Sustainability 2022, 14, 4724.
https://doi.org/10.3390/
su14084724
1. Introduction
Producing and providing public goods or services with financial funds is the basic
Academic Editors: Elena Fregonara
economic function of the government. However, with the increasing demand of the public
and Cristina Coscia
for the quantity and quality of public services, limited financial funds have been difficult to
Received: 5 March 2022 meet the public’s needs for public services. It is very important to adopt the PPP model
Accepted: 12 April 2022 for investment and financing, construction, operation, and management of public projects.
Published: 14 April 2022 This is also an effective way to use the government’s limited resources to solve the problem
Publisher’s Note: MDPI stays neutral of public goods supply under the background of the new normal of China’s economic
with regard to jurisdictional claims in development and the supply-side structural reform strategy.
published maps and institutional affil- Sustainable PPP can not only increase capital mobility, improve project selection and
iations. improve project efficiency, such as reducing resource loss, improving labor productivity, and
reducing public management costs [1], but also promote economic growth and employment
increase in the project location. In the field of PPP research, researchers evaluate the project
performance in terms of Key Performance Indicators (KPI) and the whole life cycle but
Copyright: © 2022 by the authors. pay less attention to sustainability. For example, the standard emphasized in the Value
Licensee MDPI, Basel, Switzerland. for Money (VfM) evaluation of PPP projects mainly focuses on saving costs, striving for
This article is an open access article maximum output, and achieving expected results [2]. PPP projects are generally large-scale
distributed under the terms and
public infrastructure projects, and their construction and operation have a great impact on
conditions of the Creative Commons
the economy, society, and environment [3]. Today, sustainable development is increasingly
Attribution (CC BY) license (https://
advocated in the whole construction field. If a PPP project performance evaluation lacks
creativecommons.org/licenses/by/
attention to sustainability, it is incomplete and does not meet the requirements of healthy
4.0/).
of which will help to improve the effectiveness of RG. EROs will also be more inclined to
consciously perform contracts, and at the same time, communicate equally with the private
sector in the process of contract negotiation and signing, which is conducive to signing a
contract that is satisfactory to both parties [18]. Therefore, the ERO is also conducive to CG.
The government of IRO focuses on the “mutual benefit” of both parties in PPP projects
and shows the characteristics of “instrumental rationality” in the process of cooperating
with the private sector [4]. First, it shows the spirit of contract in the government, focusing
on the contractual agreement and mutual restraint. The concrete manifestation in action
is to earnestly fulfill the responsibilities in the contract, for example, taking risks, paying
on time, and adjusting prices in a timely manner [18]. In addition, the government of
IRO realizes that it is in an equal position with the private sector. Each party performs its
own duties in the project and gives full play. Therefore, in the process of a project, it will
communicate with the private sector equally and effectively, rationally resolve emergencies,
do not shirk responsibilities, support each other, and give the private sector sufficient
autonomy and control over the project [19]. These behaviors contribute to the formation
and development of CG and RG.
Different from ERO and IRO, RRO focuses on short-term benefits. In PPP projects, the
RRO may obtain private benefits through some franchises and resources [20], which is not
conducive to the establishment and restraint of formal contracts and aggravates the conflict
between the two parties. In addition, in the Chinese social environment, people hate the
naked exchange of power and money and hate the use of power for personal gain. When
the private sector realizes that the government has a rent-seeking orientation, it may enter
into transactions with the government through bribery and other illegal means or other
gray means to fight for competition protection or allow the public sector to relax review
conditions. Although this kind of transaction will make the private sector obtain certain
short-term benefits, it will also cause the private sector’s psychological disgust and distrust,
which is not conducive to the establishment of a good relationship between both parties.
Based on this, the following hypotheses are proposed:
Hypotheses 1 (H1). ERO positively affects project governance.
Hypotheses 1 (H1a). ERO positively affects RG.
Hypotheses 1 (H1b). ERO positively affects CG.
Hypotheses 2 (H2). IRO positively affects project governance.
Hypotheses 2 (H2a). IRO positively affects RG.
Hypotheses 2 (H2b). IRO positively affects CG.
Hypotheses 3 (H3) RRO negatively affects project governance.
Hypotheses 3 (H3a). RRO negatively affects RG.
Hypotheses 3 (H3b). RRO negatively affects CG.
In PPP projects, the cooperation between public and private parties lasts a long time.
In addition to the emotional maintenance brought by ERO, the mutual restraint under
IRO is also a very important means. Under IRO, the government pays attention to the
spirit of the contract, and mainly takes contract terms as the criteria for their actions in
projects. In cooperation with the private sector, based on the principle of “business is
business and mutual benefit”, the public and private parties can reach a more consistent
result on risk-sharing and benefit distribution, and the same goals can also give full play
to their respective advantages. On the one hand, it encourages the private sector to make
greater efforts for project performance and realize the supply of public products/services
in a more cost-effective manner [22]. On the other hand, in order to encourage the private
sector to provide more cost-effective products/services, the government will also provide
corresponding support, such as policy support, improving the efficiency and transparency
of the approval process, etc., which will help to achieve better PS.
On the contrary, rent-seeking behavior is based on the premise that the government,
which has specific resources, sacrifices social/public interests in exchange for personal
interests [20]. In this case, the private sector, the project user, or the public’s satisfaction
will inevitably suffer losses. In the process of project management, the private sector will
also pay additional costs for rent-seeking from the government, resulting in an increase in
project costs. In addition, the naked exchange of power and money is not conducive to the
maintenance of equal partnership between the two parties, and the supervision function of
the government no longer exists, which is not conducive to improving PS. Therefore, this
research proposes the following hypotheses:
Hypotheses 4 (H4). Government’s relation orientation has a significant impact on PS.
Hypotheses 4 (H4a). ERO positively affects PS.
Hypotheses 4 (H4b). IRO positively affects PS.
Hypotheses 4 (H4c). RRO negatively affects PS.
For PPP projects, the government’s relation orientation not only shows its willingness,
enthusiasm, and determination to cooperate with the private sector but also contains
a series of specific behaviors. Research on the key success factors of PPP projects has
found that relationship orientation will affect the cooperation and risk-sharing between
public and private parties, and different relationship orientations will show different
participation enthusiasm and ways of handling problems in the project. In PPP practice,
a good relationship orientation of the government can derive good relationship norms,
which is conducive to the formation of mutual respect, trust, communication, and other
relationship mechanisms between public and private parties [25]. Both parties have the
same goals and solve problems together. The government provides policy support and
the tilt of public resources, while the private sector will also make more efforts to improve
performance. On the contrary, a bad relationship orientation will weaken the expectations,
communication, and mutual trust generated in the process of cooperation between the
two parties, which is not conducive to the role of RG, increases conflicts and opportunistic
behaviors between the two parties, thereby reducing management efficiency, and is not
conducive to improving PS. Based on this, put forward hypotheses:
Hypotheses 6 (H6). RG plays a mediating role between the government’s relation orientation and PS.
Hypotheses 6 (H6a). RG plays a mediating role between ERO and PS.
Hypotheses 6 (H6b). RG plays a mediating role between IRO and PS.
Hypotheses 6 (H6c). RG plays a mediating role between RRO and PS.
3. Methodology
3.1. Sampling and Data Collection
This study takes energy PPP projects as the research object. The questionnaires are
mainly distributed to the managers of large construction enterprises who have participated
in the practice of PPP projects, financial institutions and investors who have participated
in the investment of PPP projects, and scholars with practical experience in PPP projects,
covering energy and power, water conservancy, environmental protection, and other fields.
The questionnaires were mainly sent out by email and on-site distribution. Of the 300 ques-
tionnaires sent out, 276 were retrieved. After deleting some unqualified questionnaires
(including missing information, unified answers, and the respondent declaring that they
do not know the relevant fields), 218 valid questionnaires were finally obtained, with an
effective rate of 72.7%, which satisfied the model test conditions.
From the distribution of the sample, 64.22% of the respondents are middle and senior
managers of PPP projects (27 senior managers; 44 department managers/deputy managers;
69 professional supervisors); 195 people with a bachelor’s degree or above (accounting
for 89.45%); Most respondents have been engaged in PPP projects for more than 3 years
(accounting for 62.39%). The respondents have rich experience in participating in PPP
projects and have a high degree of understanding of the whole process of PPP projects,
which ensures the validity of the survey data. The detailed descriptive statistical results of
the sample data are shown in Table 1.
Sustainability 2022, 14, 4724 9 of 20
3.2. Measurement
This paper divides the government’s relation orientation into three dimensions: ERO,
IRO, and RRO. It includes 6, 5, and 5 measurement items respectively. The research
on PS is relatively mature. In this paper, PS is divided into three dimensions: economic
sustainability, social sustainability, and environmental sustainability, with a total of 13 items.
The research on PPP project governance is also relatively complete. This article refers to the
research of Li Xiaoguang and others [18,28] on the mediating variables of RG and CG. RG
is measured from three dimensions of trust, communication, and joint problem solving,
with a total of 8 items. CG is measured from three dimensions of contract completeness,
contract flexibility, and strictness of contract performance, with a total of 10 items.
Survey items are listed in Table 2. The items were measured on a five-point Likert
scale, from 1 (strongly disagree) to 5 (strongly agree). Cronbach’s alpha for government’s
relation orientation, PS, and project governance is shown in Table 3.
Table 2. Cont.
4. Model Evaluation
4.1. Hypothetical Model Quality Evaluation
1. Reliability analysis
The results of the reliability analysis are shown in Table 3. The CITC values were
greater than 0.50, and the Cronbach’s α values were significantly higher than 0.7, indicating
that the scale has a good reliability.
2. Common methods variance
Sustainability 2022, 14, 4724 12 of 20
In order to avoid homologous variance, this research ensures the anonymity of the
questionnaire and promises that it is entirely for academic research purposes and does
not involve commercial purposes. In the design of the questionnaire, a neutral context
was used as far as possible to obscure the function of the items, and the restriction of
the respondent in answering the items was eliminated to the greatest extent. In addition,
using Harman’s single factor test method, 47 measurement items were put together for
factor analysis. The result has shown that the load of the first principal component after
factor analysis was 21.15%, indicating that there was no single principal factor, that is, the
homologous variance was not significant and in a controllable state.
3. Validity analysis
The validity test is divided into convergent validity and discriminant validity. This
study used AMOS 24.0 software to do the Confirmatory factor analysis (CFA). Judgment
criteria include χ2 /df < 2, RMSEA < 0.05, RMR < 0.05, TLI, NFI, GFI, CFI and IFI were all
greater than 0.9, and AGFI was close to 0.9. The results are shown in Table 4.
Table 4. Cont.
The discriminant validity is determined by comparing the AVE value and correlation
coefficients value. As shown in Table 5, the diagonal bold part is the square root of AVE,
which is greater than the correlation coefficients of each variable, so that the model has
high discriminant validity.
Variable 1 2 3 4 5 6
1 ERO 0.73
2 IRO 0.52 0.75
3 RRO 0.65 0.44 0.74
4 RG 0.66 0.63 0.59 0.77
5 CG 0.48 0.58 0.34 0.55 0.76
6 PS 0.56 0.52 0.48 0.61 0.57 0.75
Standardized Path
Action Path p Value Test Results
Coefficient
H1a: ERO→RG 0.52 *** Passed
H1b: ERO→CG 0.08 0.42 Refused
H2a: IRO→RG 0.10 0.28 Refused
H2b: IRO→CG 0.59 *** Passed
H3a: RRO→RG −0.22 * Passed
H3b: RRO→CG −0.30 ** Passed
H4a: ERO→PS 0.11 0.19 Refused
H4b: IRO→PS 0.30 *** Passed
H4c: RRO→PS −0.25 ** Passed
H5: RG→PS 0.42 *** Passed
H7: CG→PS 0.45 ** Passed
Notes: * p < 0.05, ** p < 0.01, *** p < 0.001.
at the level of 0.001; Hypothesis 1b posits that ERO has a positive impact on CG, and the
standardized path coefficient obtained is 0.08, but it does not reach the significant level
(p > 0.05), assuming Hypothesis 1b is rejected.
Hypothesis 2 posits that the IRO of government significantly affects project governance.
Hypothesis 2a posits that IRO positively affects the formation of RG, but the standardized
path coefficient obtained is 0.10, and p > 0.05, which is not verified. Assuming that the
standardized path coefficient of Hypothesis 2b is 0.59, and the p value is significant at the
0.001 level, hypothesis 2b is supported.
Hypothesis 3 posits that the RRO of government negatively affects project governance.
The standardized path coefficients of Hypothesis 3a and Hypothesis 3b are −0.22 and
−0.30, and the p value is significant at the level of 0.05 and 0.01. Hypothesis 3 is verified.
2. The effect of government’s relation orientation on PS
Hypothesis 4 posits that different government relation orientations have a significant
impact on PS. Hypothesis 4a posits that ERO has a positive impact on PS. The empirical
results show that although the path coefficient is 0.11, but p > 0.05, indicating that the direct
effect of ERO on PS is not significant, and hypothesis 4a is not supported. Assuming that
the path coefficient and p value of hypothesis 4b and hypothesis 4c are 0.30 and p < 0.001
and −0.25, and p < 0.01, both are verified.
3. The effect of project governance on PS
Hypothesis 5 posits that RG has a significant positive impact on PS, and Hypothesis
7 posits that CG has a significant positive correlation with PS. Hypothesis 5 has a path
coefficient of 0.42 and p < 0.001, and Hypothesis 7 has a path coefficient of 0.45 and p < 0.001,
both have been verified, indicating that RG and CG have a significant positive effect on PS.
4. The mediating role of project governance
This paper uses Bootstrapping based SEM test method to test the mediating role of RG
and CG with the help of Smart PLS statistical software. The test results are shown in Table 7.
The results show that the indirect effect of different government relation orientations on PS
is significant (p < 0.05), indicating that there is a mediating effect between them.
When the mediating variable RG is introduced, the indirect influence path coefficient
of ERO on PS is 0.17 and p < 0.01, which is verified; the indirect influence path coefficient
of IRO on PS was 0.04, but p > 0.05, failed to pass the verification; The indirect impact path
coefficient of RRO on PS is −0.09 and p < 0.01, which is verified. Combined with the above
verification results of direct effect, the conclusion is drawn: RG plays a fully mediating role
in the impact of ERO on PS, and plays a partial mediating role in the impact of RRO on PS.
It is assumed that Hypothesis 6a and Hypothesis 6c pass the verification, and Hypothesis
6b fails.
When the mediating variable CG is introduced, the path coefficient of the indirect influence
of ERO on PS is 0.06, but p > 0.05, which fails to be verified; The path coefficient of the indirect
Sustainability 2022, 14, 4724 15 of 20
influence of IRO on PS is 0.14, and p < 0.001, which passed the verification; The path coefficient
of the indirect influence of RRO on PS is −0.05 and p < 0.05, which is verified. Combining the
above verification results of direct effects, it is concluded that CG plays a partial mediating role
in the influence of IRO on PS and plays a partial mediating role in the influence of RRO on PS.
Hypothesis 8b and 8c pass the verification, and Hypothesis 8a fails.
5. Discussion
5.1. Discussion on the Direct Role of Government’s Relation Orientation
Through SEM model verification, it is found that different government relation orien-
tations have different mechanisms of effect on project governance and PS.
First, in PPP projects, ERO mainly plays a role by influencing RG, which further proves
the view of Huang and Chiu (2017) [29], and Shahzad et al. (2020) [30]. ERO helps the
relationship governance mechanism in the project play a role. However, the direct effect of
ERO on CG and PS is not significant.
It may be because ERO mainly promotes the flexibility of contract governance, and
has little effect on the completeness and strictness of contract performance, leading to
the positive effect of ERO on CG is not significant; starting from the practice of PPP
projects, with the development of PPP standardization, the quality of external emotional
relationships will not directly affect whether the contract is complete and strict, so the path
of action is not passed. Furthermore, the direct impact of ERO on PS is not significant, and
the hypothesis is not supported. This may be because, under ERO, the sincere treatment
and frank communication between the public and the private parties will make the project
management process easier and smoother, and will not directly improve the project cost,
quality, and progress [15]. The satisfaction of all parties to the project should also be
determined by the actual completion of the project, and the improvement of satisfaction
will not be guaranteed because of the good attitude of the public sector, so the direct effect
is not significant.
Second, IRO plays a role mainly by influencing CG and also has a direct impact on the
improvement of PS. This further proves the view of Byoun and Xu (2014) [31], David et al.
(2020) [32], and Lu et al. (2019) [33]. However, IRO does not promote RG, this may be
because under IRO, whether it is the support and assistance provided by the government
to the social sector or the communication and cooperation with the social sector, they all
adhere to the attitude of “business is business” and are more in the spirit of contract [34].
Behavior under the direction of project performance will not deepen the trust and sincere
communication between the two parties, so the impact on RG is not significant.
On the contrary, the negative effects of RRO have been verified, which is consistent
with the research of Guillermo Takano (2017) [20]. RRO will destroy the effect of RG and
CG, and is not conducive to the realization of PS.
in the future. At this time, contract flexibility is needed to adapt to future changes and
maintain consistency with the external environment, such as price adjustment procedures,
reasonable distribution of control rights, dispute resolution, etc., so as to play the role of
flexible adjustment of the contract; the strictness of performance can effectively guarantee
the rigid constraint of project objectives through the cooperation of incentive and punish-
ment mechanisms. Therefore, the integrity, flexibility, and strict performance of contract
governance can effectively promote the sustainability of the project and ensure the success
of the PPP project.
RG can strengthen the expectation, trust, commitment, and other elements generated
in the transaction process, promote the formation of coordination, communication, and
other mechanisms, and then effectively solve problems and reduce risks. Specifically, a high
degree of trust between the public and private parties helps to improve the enthusiasm
to participate in the project and reduce conflict and opportunistic behavior; the two sides
maintain good and close communication, which is conducive to the transmission and
feedback of key information of the project, effectively reduce differences between the two
sides and reduce communication costs. By jointly solving problems, we can give full play
to our respective advantages, complement each other and support each other, so as to truly
achieve a win-win situation of cooperation. Therefore, a good relationship governance
mechanism can effectively improve the sustainability of the project.
6. Conclusions
This study explores the mechanism of government’s relation orientation on project
governance and PS in PPP projects. Through the literature review and theoretical analysis,
combined with the reality of the PPP project and expert interviews, a measurement scale of
the government’s relation orientation in the PPP project is developed. Then, we enriched the
connotation of PPP project sustainability and developed a PS measurement scale including
economic sustainability, social sustainability, and environmental sustainability. Afterward,
hypotheses were proposed to construct a structural equation model of the government’s
relation orientation, RG, CG, and PS. In the verification of the model, one used AMOS
software to verify the direct effect of each variable; the other used Smart PLS software to
verify the intermediary role of project governance. The following research conclusions
were drawn:
• First, different government relation orientations have different effects on project gov-
ernance and PS, among which IRO and RRO will directly affect PS.
ERO has a strong influence on project governance. In PPP projects, ERO is committed
to the maintenance of long-term partnerships. Therefore, more friendly information will be
released in the process of cooperation with the social capital party, such as giving sufficient
trust to the private sector, being sincere when communicating with the social capital party,
being willing to share project experiences and feelings, respecting the professionalism and
ability of the private sector, etc. These friendly tendencies will help RG mechanism in the
project to play a role.
IRO directly affects the CG process and PS. The government with IRO pays more
attention to the spirit of contract and emphasizes mutual benefit in cooperation with social
capital. For the purpose of successfully completing project goals and improving PS, the
government will complete the tasks according to the contract and bear the risks reasonably.
In case of emergencies, it is more inclined to negotiate with the private sector on an equal
footing and give some support, rather than blindly transfer the risks and responsibilities to
the social capital side. Under IRO, the two parties restrict and cooperate with each other,
which is conducive to the full role of CG, and the two parties can more smoothly reach an
agreement on the project objectives, which is conducive to improving the PS.
RRO has obvious negative effects on project governance and PS. RRO is the product of
the non-standard institutional environment of PPP projects. Due to the scarcity of resources
and public attributes of PPP projects, the public sector is endowed with innate choice,
supervision, and decision-making rights. If this inherent advantage is used by the public
Sustainability 2022, 14, 4724 17 of 20
sector for personal interests, such as taking whatever it wants in the selection of investors
or the setting of project cooperation conditions, setting an inappropriate threshold for the
entry of social capital, setting an unreasonable approval process, etc. These behaviors
are not conducive to the establishment of a good relationship between the public and the
private parties. They are also contrary to the equal subject status of both parties, are not
conducive to the smooth implementation of the contract terms, destroy the binding nature
of the contract, and are likely to erode the development foundation of the PPP project,
damage the public interest and cause the failure of the project.
• Second, RG and CG play different mediating effects on the impact of the government’s
relation orientation on PS: RG plays a complete mediating role in the impact of ERO
on PS, and plays a partial mediating role in the impact of RRO on PS; CG plays a
partial mediating role in the impact of IRO and RRO on PS.
Through the verification of the mediation effect, RG plays a complete mediating role
between ERO and PS. The reason why RG can be closely related to the relationship between
ERO and PS can be explained from the following aspects. Firstly, the trust relationship
between public and private parties in a PPP project is not invariable and achieved overnight.
Under ERO, the initial level of trust between the two parties is high, the positive sincerity,
trust, and communication are continuously strengthened in the process of cooperation, the
relationship is more stable, and the effect and level of RG are improved. Secondly, the role
of RG in improving PS has been verified by many scholars. Trust, communication, and
joint problem-solving in relationship governance can improve the cooperation satisfaction
of both sides and are an effective way to achieve PS. Finally, the complete mediating role
of RG also shows that RG is a necessary mediation way for ERO to affect PS. ERO can
effectively improve PS only if it is reflected in action and effectively improve the effect of
project relationship governance.
CG plays a part of mediating role in the positive impact of IRO on PS. This process
further improves the path and mechanism of IRO on PS. On the one hand, IRO will
directly affect the PS. On the other hand, IRO will play a role through the project contract
governance mechanism and then affect the PS. IRO can improve the supply efficiency
of public projects through direct interaction with the social capital, such as providing
additional help to achieve more cost-effective public goods/services. It can also affect the
setting and implementation of contract terms through the principles of “contract spirit”
and “mutual benefit”, thereby improving PS.
On the one hand, RRO will directly have a negative impact on PS; on the other hand,
it will also destroy RG and CG, which is not conducive to the establishment of a good
relationship and formal contract between both parties, thus damaging PS. Therefore, the
negative effect of RRO has a wide range of influence paths. In the actual project, rent-
seeking behaviors should be prevented and avoided as much as possible.
strengthen performance supervision covering the life-cycle of the PPP project to match
the performance appraisal with project appraisal, price adjustment, and consideration
payment, so as to create conditions for social capital to obtain reasonable return while
realizing effective supervision. In addition, strengthen performance audits and third-party
evaluation. Combined with the characteristics of PPP projects, improve relevant audit
systems, procedures, methods, and methods, so as to make performance audit an important
link for improving the sustainability of PPP projects. At the same time, select experts in law,
economy, accounting, audit, engineering, environmental protection, agriculture, forestry
and water conservancy, and other industries, set up a third-party performance evalua-
tion organization, give full play to the expertise of experts and implement performance
evaluation of PPP projects.
• Second, the government should pay attention to the mechanism of ERO and IRO, and
reasonably grasp its own positioning.
In PPP projects in China, the government is often in a strong position because of its
resource advantages, so it is difficult to completely treat the private sector as an equal
subject, which is not conducive to the healthy and sustainable development of PPP projects.
The empirical results show that ERO and IRO are conducive to the improvement of project
governance and PS, and the direct effect of IRO is more significant. Therefore, the gov-
ernment should pay attention to the mechanism of government’s relation orientation in
the whole life cycle of PPP projects. Firstly, the government should establish the concept
of equal consultation and fully understand the existing laws and policies. In the project
start-up stage, it should be good at using the expert advice of the external brain to clarify
its own goal positioning. In the process of signing the contract, be honest with each other to
reduce unnecessary conflicts and frictions. The second is to clarify the boundary between
the two parties based on the contract signed by both sides. The more standardized the
contract is, the better the contract governance can play its role. In the process of project
implementation, the government should honor its promise to perform the contract, restrict
its own behavior according to the principle of equal responsibility and rights, and realize
reasonable benefit distribution and risk-sharing. So as to give full play to their respec-
tive advantages, establish a good partnership and jointly promote the development of
PPP projects.
Author Contributions: Conceptualization, G.F.; Formal analysis, X.L.; Funding acquisition, S.H.; In-
vestigation, G.F. and X.L.; Methodology, G.F., S.H. and X.L.; Project administration, G.F.; Software, G.F.;
Supervision, S.H.; Visualization, G.F.; Writing—original draft, G.F.; Writing—review & editing, G.F. and X.L.
All authors have read and agreed to the published version of the manuscript. Funding: This research
Sustainability 2022, 14, 4724 19 of 20
was funded by the National Natural Science Foundation of China, grant number 71340008; and the
Fundamental Research Funds for the Central Universities, grant number 2018YJS066.
Institutional Review Board Statement: Not applicable.
Informed Consent Statement: Informed consent was obtained from all subjects involved in the study.
Data Availability Statement: Not applicable.
Conflicts of Interest: The authors declare no conflict of interest.
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