VfM assessment of transport PPPs: Implications for future improvement

Public-Private Partnerships (PPPs) have been adopted to deliver transport infrastructure assets worldwide, attributing to governments’ increasingly limited fiscal budget. However, the key issue about whether PPPs can provide taxpayers with better value for money (VfM) is still under controversy. As an integral component of infrastructure procurement process, VfM assessment acts as an essential stage of governments’ ex-ante evaluation for the use of PPPs. Despite this, relevant empirical research, especially within the context of transport infrastructure, has received limited attention. Against this backdrop, a total of 3 case studies of the Australian transport PPP projects has been undertaken and the SWOT analysis was conducted to examine the current practice in VfM assessment. The empirical evidence indicates that the approach being used by the Australian state governments for assessing VfM fails in addressing a critical perspective in terms of the improved service quality to be generated by private-sector entities. Based on this finding, a novel VfM-oriented decision-making model that is underpinned by the Dynamic Discrete Choice Model (DDCM) has been proposed. This paper contributes to the body of knowledge of PPPs VfM assessment and is significant for improving industry practice in decision making of procurement selection for transport assets.