How To Attain Value for Money

Abstract

Drawing on the results of a questionnaire sent to all OECD and some non-OECD countries, this article considers the various factors that may skew this choice and thereby undermine the pursuit of value for money. The results of the questionnaire point especially to differences in the range and complexity of the ex ante and ex post value-for-money tests that some governments apply to PPPs and traditionally procured infrastructure projects. However, accounting standards, political preferences for or against PPPs, and the strength of public sector unions also play, among others, a role in skewing incentives and affecting choice in some countries. The findings of the questionnaire are augmented by four case studies setting out the procurement processes for PPPs and traditional infrastructure procurement in France, Germany, Korea and the United Kingdom. With the focus on the attainment of value for money and by exploring the issues raised in the responses to the questionnaire, this article sets out some good practices that will align the requirements for these two types of procurement and remove possible perverse incentives that favour one over the other.

Public Private Partnerships, a Value for Money Solution for Clean Coal District Heating Operations

“…As an innovative procurement method, a PPP provides the public sector with a new way of allowing the private sector to manage the whole lifecycle of public projects, which are anticipated as providing better operational performance for public services. The key features of PPP can be seen from various definitions in literature, including the long-term management, cooperation, VfM and sustainability [11,12,47]. The long-term infrastructure contract partnership has become mainstream in the world [48], as the main drivers for the public sector to adopt the PPP contract for construction efficiency, innovation, risk management and financing [49].…”

“…Furthermore, the potentially significant financial investment required for purchasing the necessary assets and equipment is one of the major challenges to the application of clean coal technologies [9,10]. In response to these practical problems that constrain the promotion of new technologies, many countries have adopted a public private partnership (PPP) approach as a new solution for infrastructure development, due to its advantages in rapid financing, risk transference, professional whole-life project management and goal of long-term sustainability [11][12][13]. As an innovative way for public facilities to be financed and operated, PPP allows the public sector to define the requirements of public service needs and ensure the delivery of the outputs through contracting with the private sector, which is perceived as having the ability to deliver a better quality of public services and value for money (VfM) [14].…”

Identification of Delay Causing Actor in the Indian Real Estate Project: an AHP-Based Approach

“…In the present scenario, globally the construction domain is experiencing growth regarding capital cost and complexity (Dawson, 2008). Dawson (2008) further stated that "importantly, there is an unprecedented level of proposed development and attainment of success in each project depends upon a number of issues which include global economic events"; the statement was further supported by Rahmani et al (2017), Lloyd-walker et al (2014, Burger and Hawkesworth (2011).…”

System dynamics approaches to public–private partnerships: A literature review

“…PPPs are "forms of cooperation between the public and private sectors for the funding, construction, renovation, management or maintenance of infrastructure, or the provision of a service" (European Commission, 2004). Simply put, in PPPs, the private sector is responsible for the financing, design, construction, and operation of a project, whereas the public sector has to guarantee for the social acceptability of the project, improve the legal environment, and keep its supervisory role (Burger & Hawkesworth, 2011).…”