An examination on the sustainable competitive advantage of private finance initiative projects

Abstract

The Private Finance Initiative (PFI) is a long‐term concession of services used by the UK Government to capture private capital to fund public projects. This model is being increasingly applied in Portugal and the assessment of its competitive advantage is very important to Portugal. The empiric study undertaken both in Portugal and the UK has permitted some conclusions to be drawn already. PFI has developed the way the construction industry is managed, and has increased the competitive advantage of UK construction industry acting in the four vectors of competitive advantage: innovation, quality, efficiency and attention to the client. Innovation occurred through new designs that were more efficient and cost effective through the project’s whole life cycle. There is the widespread use of management tools: whole life cycle costing, risk management and benchmarking. PFI also improved communication in the UK construction industry, forcing interaction and feedback from all stakeholders in a project.

Innovation in public–private partnerships (PPPs): the Spanish case of highway concessions

“…Although Ball et al (2000) and Lemos et al (2003) conclude that innovation is limited in PPP projects, our results indicate that, distinguishing between R&D activities and other innovative activities, R&D activities do influence PPP projects.…”

“…In any PPP contract, risks should be shared by the private and public sectors according to management skills and ability to control risks (Lemos et al, 2003;Harris, 2004). However, according to Parker and Hartley (2003), a large number of risks in PPP projects are managed better by the private sector.…”

Managing multiple markets: big firms and PFI

“…de Lemos et al, 2003) and raised company profiles (e.g. Baldwin, 2003) and benefits to both public and private actors such as an increased use of innovative solutions (e.g.…”

Technological innovation in PPPs: incentives, opportunities and actions

“…Tiffin and Hall, 1998); competitive advantage (cf. Lemos et al, 2003); higher overall quality in the end product (cf. Regeringskansliet, 2000); and benefits accruing from letting the private sector be innovative in its solutions (cf.…”