Measures that enhance the achievement of value-for-money in public private partnership (PPP) projects

A research project looking at implementing a best practice framework for Public Private Partnerships (PPPs) in Hong Kong is currently being conducted. This research project draws from the successful experiences of using PPPs in the U.K. and aims to derive suitable skills and mechanisms for Hong Kong. As part of this research project an empirical questionnaire survey was conducted. The survey questionnaire was adapted from profound researchers in the U.K., with their permission, to compare PPP practices in different jurisdictions. Value-for-money (VFM) is one of the main initial drivers motivating Governments around the world to adopt PPPs. Respondents of the questionnaire survey were asked to rate the importance of eighteen possible measures that would enhance the achievement of value-for-money in PPP projects. In the U.K. survey conducted by previous researchers they found that the top five most important VFM measures included: (1) Efficient risk allocation (allocating the risk to the party best able to manage it), (2) Output based specification, (3) Long-term nature of contracts, (4) Early project service delivery and (5) Risk transfer (transferring a substantial amount of risk from the public to the private). For this research project, the results conducted in Hong Kong were similar. The top two most important value-for-money measures were the same as those rated in the U.K. The other measures rated highly included: (3) Competitive tender, (4) Private management skill and (5) Private sector technical innovation.