Archive

Volume 3, Number 3 / June issue 2017
Mohamed Mahdy Marzok, Mahmoud Omar Elhessnawi
Develop the financing of Public-Private Partnership (PPP) projects
Abstract

Public private partnerships (PPPs) are procurement models used in the provision of public infrastructures and involving private, as opposed to public, finance. The PPP model differs from the traditional public procurement model in this sense and in the unprecedented degree to which the private sector is involved. All things being equal, the rationale for choosing a PPP instead of a traditional public procurement model is if it provides a better Value for Money. As a result, a crucial issue to address is to find the key drivers of Value for Money in PPP projects and most importantly, to analyze the relationships between those key drivers and the complex notion of Value for Money.This study is based on a large overview of the literature together with contributions of informal interviews and my own opinions. Emphasis is put on the importance of risk management from financiers’ perspective and its consequences on Value for Money. The findings highlight the current problems in the Value for Money assessment that make the analysis hardly reliable. Good and bad practices in Value for Money assessment are discussed and potential solutions and guidance toward more Value for Money are provided.
Keywords: Public private partnerships, public, finance, Value for Money

Cite this article:
Mohamed Mahdy Marzok, Mahmoud Omar Elhessnawi. Develop the financing of Public-Private Partnership (PPP) projects. Acta Scientiae et Intellectus, 3(3)2017, 52-61.


REFERENCES

  1. Kurniawan, F., Ogunlana, S. & Motawa, I. (2010). An integrated project evaluation tool for PFI seaport projects. In: Egbu, C. (Ed) Procs 26th Annual ARCOM Conference, 6-8 September 2010, Leeds, UK, Association of Researchers in Construction Management, 1317-1327.
  2. European PPP Expertise Centre (2011). The Guide to Guidance, how to Prepare, Procure and Deliver PPP Projects.
  3. Demirag, I. et al. (2011), Risks and the financing of PPP: Perspectives from the financiers, The British Accounting Review.
  4. Grimsey, D., & Lewis, M. K. (2005). Are Public Private Partnerships Value for Money? Evaluating alternative approaches and comparing academic and practitioner views Accounting Forum, 29(4), 345-378.
  5. Thomson, C., & Goodwin, J. (2005). Evaluation of PPP projects Financed by the EIB. European Investment Bank.
  6. Kelly, J., Male, S., &Graham, D. (2004). Value management of construction projects, Blackwell, Oxford, U.K.
  7. Dallas, M. (2006). Value and risk management: a guide to best practice. John Wiley & Sons.
  8. Atkin, B. &Brooks, A. (2009). Total Facilities Management. Chichester: Wiley Blackwell.
  9. Gao, S. & Handley-Schachler, M. (2003) Public Bodies’ Perceptions on Risk Transfer in the UK’s Private Finance Initiative. Journal of Finance and Management in Public Services. 3(1),25-39.
  10. OECD Publishing (2008). Public-Private Partnerships in Pursuit of Risk Sharing and Value for Money.
  11. Grimsey, D. &Lewis, M.K. (2004). "Discount debates: Rates, risk, uncertainty and Value for Money in PPPs," Public Infrastructure Bulletin: 1 (3), Article 2.