The Assessment of Public-Private Partnership’s Possibilities to Optimize Investments in Public Infrastructure
Keywords:Public–Private Partnership, PPP, Value for Money, Assessment, Public Investment Projects, Public Sector Comparator.
This paper deals with an issue of how to evaluate the possibilities provided by the public-private partnership (PPP) to optimize investments in public infrastructure. Literature analysis discloses this process being complex in nature, since it includes a variety of factors needed to be assessed as well as many aspects needed to be considered. Value for money (VfM) assessment is acknowledged as as a main decision-supporting tool to assess whether to implement investment project (IP) as the PPP. However, due to its multifaceted and somewhat controversial nature, this process is challenging and demanding, while results can be very different depending on the approach and assumptions applied, which, in turn, also causes critism and conflict over very PPP. To get reliable results, the rational public sector‘s comparator (PSC) model and the financially viable and affordable PPP model have to be constructed as well as it is required rational comparative tools. However, these aspects are analyzed only fragmentary. There is a lack of studies characterized by systemic and integrated approach to VfM assessment, which, in turn, also determines a lack of solutions, which could allow promoters to complexly solve the issues related to satisfaction of the above-mentioned requirements. To fill the gap, the model of evaluating the possibilities provided by the PPP to optimize investments in public infrastructure has been created. It consists of five stages: 1) preparation of the initial IP; 2) selection of IP for assessment of PPP; 3) PPP structuring and feasibility analysis; 4) VfM assessment of actual bids, and; 5) VfM monitoring, which includes ex-ante, actual and ex-post assessment. The model is tested in the hypothetical case study, where its suitability to solve the issues related to assessment of PPP’s possibilities to optimize investment in public infrastructure in the case of both economic-based and social-based PPPs has been demonstrated.