Closing capability gaps for procuring infrastructure public-private partnerships: A case study in China

This paper explores how public sector owners (PSOs) close capability gaps between existing capabilities and required capabilities when first entering into infrastructure Public-Private Partnerships (PPPs). Drawing on the dynamic capabilities view and research on owner project capabilities, the paper presents an exploratory in-depth case study of a state-owned enterprise in China, as it was in the process of initiating PPP metro line projects for the first time. The findings show that PSOs closed capability gaps by obtaining owner strategic, commercial and governance capabilities at the initial phase of PPP procurement. This process was undertaken through a combination of acquiring capabilities externally and developing capabilities internally. The study contributes to the literesture on capability development and sheds light on the conditions when and where internal capability development and external capability acquisition are integrated to close capability gaps for procuring infrastructure PPPs.