Achieving Value for Money: An Analytic Review of Studies on Public-Private Partnerships

Abstract

Over the past two decades, governments around the world have been embracing Public Private Partnerships (PPPs) as an alternative approach in the provision of infrastructure. PPPs have their merits in remedying financial shortages in public sectors and improving infrastructure performance, but they must be carefully selected on the basis of value for money when compared to conventional procurement. While Value for Money analysis as an evaluation method has been widely used to ensure feasibility, accountability, and transparency in PPPs, little is known with respect to its effectiveness and appropriate theoretical foundations. By mapping theoretical foundations and practical analysis methods, this paper reports the weakness and inadequacy of current value for money analysis. The study especially explores existing theoretical foundations and empirical evidence for PPP value for money and highlights paths for future research.

A socio-economic multi-objective optimization approach toward enhancing public–private partnerships’ concession agreements in infrastructure development

“…Many researchers have investigated modeling the concession period via different approaches, including the net present value (NPV) calculations (Shen et al, 2002; Wu et al, 2011), game theories (Peng et al, 2014: 201; Shen and Wu, 2005; Yang et al, 2007), besides simulation modeling (Carbonara et al, 2014; Ng et al, 2007a, 2007b; Ngee et al, 1997; Scandizzo and Ventura, 2010; Yu and Lam, 2013; Zhang, 2009). However, the process of choosing the ideal concession period and price is complex, and it depends on several concession factors and components that may differ from one project to another.…”

Review of studies on the Critical Success Factors for Public–Private Partnership (PPP) projects from 1990 to 2013

“…This is possibly due to the fact that since PPP has already been well implemented with over USD54.3 billion projects initiated only in the transportation sector from 1989 to 2011 (Reinhardt, 2011), researchers have turned their attention towards other equally important areas of PPP studies such as enhancing value for money, risk management, financial viabilities, and relationship management (Aziz and Nabavi, 2014;Garvin, 2009;Peng et al, 2014). Surprisingly, 7 publications from the selected journal focused on exploring the international practices for a successful PPP implementation.…”

Quantifying a Financially Sustainable Strategy of Public Transport: Private Capital Investment Considering Passenger Value

“…Current VFM analysis mainly deals with the economic aspect of ensuring VFM in PPP projects. Other non-financial costs and benefits are neglected in the quantitative assessment [38]. Factually, the value-of-time (VOT) of passengers is also important due to public necessity of transport [3].…”

“…Otherwise, the project should be dropped [37]. The definition given by the UK's HM Treasury is 'optimum combination of whole-of-life' costs and quality (or fitness for purpose) of the goods or service to meet the user's requirement [38]. Current VFM analysis mainly deals with the economic aspect of ensuring VFM in PPP projects.…”