Do Public-Private Partnerships Deliver Value for Money in Infrastructure Projects? A Critical Literature Review

Abstract

A growing number of governments are using Public-Private Partnerships (PPPs) to deliver infrastructure projects as the needs for infrastructure often outpace the public sector's financing capabilities. Questions have been raised as to the effectiveness of PPPs in delivering value for money for infrastructure that would guarantee high performance. This study sought to interrogate existing literature on whether PPPs deliver value for money in infrastructure projects. The study was guided by three objectives, namely: to establish the criteria for evaluating Value for Money (VfM) in PPP implemented infrastructure projects; to assess to what extent PPP implemented infrastructure projects have delivered value for money; and to identify the key determinants for providing value for money among PPP-implemented infrastructure projects. The study approach adopted was review of existing literature with view of collaborating empirical evidence as well as identifying divergent results. The findings of the study were mixed with some of the studies reviewed revealing significant value for money achieved through PPP among infrastructure projects, others casting doubt as to the effectiveness of PPP arrangements thus opting to take a cautious middle ground and yet others were outright critical of PPP models of procurement and provided a litany of failed PPPs project examples. The study concludes the question as to whether PPPs provide value for money in infrastructure projects still remains debateable and can only be well understood in the context of case-by-case because of differential contextual and environmental factors. The study recommends that for PPPs to deliver value for money in infrastructure projects, proper regulatory frameworks and enabling environments should be put in place. Further, the assessment of value for money for PPPs projects should move beyond financial considerations to other important aspects of project management such as values sustainability.