The Influence of PPP Critical Success Factors on Value for Money Analysis
public’s support for the facilities and
services that the PPP project is expected
to bring, where a lack of support might
delay the permits for commencement,
reduce revenues because of a lack of use
of services, or cause political debates
that might delay the project (Cheung,
2009; Li et al., 2005).
A transparent bidding process was
ranked as the fourth most significant
critical success factor for the success
of PPP projects and, when regressed
against the value for money viability,
showed a very significant influence as
well. For a PPP project to succeed, it is
critical to have a transparent bid process until the final close. It is very common for a PPP project to undergo a
multistage bidding process in which
the rights of some bidders become
infringed, which undermines efforts to
award the project to the best bidder.
Furthermore, the chance for the successful delivery of the project depends
significantly on the bid winner. The bid
winner should be the one that delivers
the best value for money for the project.
All bidders must be involved in rigorous negotiations and must be given the
information required for revising their
bid proposals to unlock further value.
The government must show more commitment by ensuring transparency for
the full duration of the bid process, not
only in the initial submittals. Public
and private parties must show equal
commitment to the objectives of the
PPP project in order for the project
to be viable (Li, 2003). Also, government support through favorable policies and minimum revenue guarantees
may reduce the cost of risk and help
secure financing from the private sector on good terms, leading to value for
money creation (Boussabaine, 2013).
Also, the influence of macroeconomic
risks, such as unstable inflation and the
exchange rates of the country, can be
minimized through better risk allocation and investment protection guarantees, leading to value for money creation
for both parties.
This study implies some limitations
that future researchers should consider
further factors and empirical data. It is
very difficult to generalize the results to
PPP procurement value for money creation based on one sample and limited
geographical data. It is recommended
that future studies determine additional success factors. Future research
should seek to investigate the interrelationships among the value for money
determinants, risk allocation, and critical success factors. This will show if risk
allocation has a significant contribution
to value for money viability as suggested
by the literature.
This study set out to explore relation-
ships between critical success factors
and value for money viability constructs.
The key contribution of this article is
the tracking of the critical success fac-
tors that contribute to a positive value
for money viability analysis. The critical
success factor classification presented
in this study complements studies that
previously investigated PPP projects. It
was envisaged that several critical suc-
cess factors contribute to the value for
money viability analysis. The article
examined the correlation between criti-
cal success factors and the key value for
money viability analysis constructs. The
results show that most critical success
factors are correlated with the value of
money viability constructs at a p , 0.05
significant level or above. Given that sev-
eral critical success factors are reported
in the literature, this research was able to
determine the principal critical success
factors that are key in value for money
viability analysis. This study found that
government guarantees, macroeconomic
conditions, shared authority between the
public and private sectors, social sup-
port, and transparent procurement pro-
cess all provide a great opportunity for
achieving better value for money from
PPP projects. Further empirical study
should confirm if this is the case. This
study provides a foundation for further
research to investigate the complexity of
interaction among all the variables that
are part of the PPP project. This inves-
tigation has several limitations, among
them the fact that the research applies
mainly to the UAE and UK contexts. Also,
the analysis is based on data from sur-
veys rather than empirical analysis.
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