Monte Carlo Simulations as a Tool to Support Quantitative Value for Money Assessment of Public Private Partnership Project

Abstract

Value for money assessment is a crucial approach to compare the value of a project done by Public Private Partnership (PPP) with traditional government procurement. However, one of the most challenges in Value for money (VFM) assessment is uncertainty in inputs, which lead to imprecise output computation. To solve this issue, some practical studies suggest Monte Carlo Simulations (MCS) as a tool to support quantitative Value for money assessment to achieve reliable outcome estimation. Although many international researches focus on quantitative VFM analysis with the use of MCS, few Vietnamese studies conduct this issue. This research illustrates the application of MCS to support quantitative VFM assessment of PPP projects in Vietnam. A case study of a transport project in Vietnam is employed to demonstrate the model.