Enhancing value for money in public private partnership projects
Journal of Financial Management of Property and Construction
This paper studies the measures that enhance Value for Money (VFM) in PPP projects from the findings achieved in a questionnaire survey. The questionnaire survey was conducted in Hong Kong (also known as the Hong Kong Special Administrative Region) and Australia, and is compared to the results conducted by other researchers (Li, 2003) in the United Kingdom. Respondents were asked to rate eighteen VFM measures in PPP projects. The results found that the top five VFM measures ranked by the
... anked by the respondents from Hong Kong included (1) Efficient risk allocation (allocating the risk to the party best able to manage it); (2) Output based specification; (3) Competitive tender; (4) Private management skill; and (5) Private sector technical innovation. The first and second of these VFM measures were also found to be ranked high by the respondents from Australia and the United Kingdom, indicating that these were true for these jurisdictions. When the risks are handled well less pitfalls are experienced and as a result VFM is more achievable. Hence an efficient risk allocation is vital in determining whether VFM can be achieved in PPP projects. A clear output based specification can enable a more obvious project design and concept hence minimizing the possibility of delivering the wrong product for the user. Therefore this measure is also important in determining whether VFM has been achieved for a PPP venture. Despite the interest in PPP, there is need for more systematic and in-depth research to examine the measures that enhance VFM in PPP projects in Hong Kong. In addition this project also forms a comparative study for the use of PPP in Hong Kong, Australia and The United Kingdom.