Opportunistic behavior in a public-private partnership: the case of diverging partners' interests in tariff setting in Kazakhstan

Open Access

Abstract

Introduction. The article aims to investigate the forms of partners' opportunistic behavior in a public-private partnership (PPP). The article highlights key features of a PPP that involves construction and operation of a railroad in Eastern Kazakhstan. Research methodology. This qualitative study employs in-depth interviews as a principal data collection method. Theoretical framework. The article's theoretical underpinnings stem from highlighting the meaning of opportunism in general and from defining opportunistic behavior in a PPP in particular. Results. The article reveals the typical reasons behind opportunistic behavior such as intent to pay for unplanned project expenses and a need to turn project's losses into profits. The article concludes that the government, by rejecting applications for tariff raises, aims at receiving the greater PPP value for money and, hence, serves the PPP interest as well as the interests of taxpayers and consumers. Conclusion. The opportunistic private sector partner behavior that pursues its own interest, rather than that of a partnership, diminishes the PPP value for money. Instead of raising a tariff, a private operator should look for ways of cutting costs and increasing the project's efficiency. Key words: public-private partnership (PPP), opportunistic behavior, tariff setting, public services.