Abstract
This paper presents a new public–private partnership (PPP) financial evaluation tool, PPP-VALUE (Public–Private Partnership Value-for-Money Analysis to Learn and Understand Evaluation). The tool is intended to help states learn how to assess quantitatively whether a PPP is appropriate for specific projects and to understand the relative impacts of the key drivers of value for money. The tool is focused on decisions about infrastructure delivery options to achieve the best value for the public. PPP-VALUE helps states learn how to assess the procuring agency's costs for providing a project through the PPP procurement model and to compare that result with conventional procurement costs. The tool guides state officials in their efforts to understand better the impacts of project risk, revenue, and financing on public agency costs and helps them better understand the key financial variables in making a procurement decision. This paper demonstrates the use of PPP-VALUE with a simplified hypothetical project to help readers understand the basic concepts of value-for-money analysis and to appreciate the complexity of more detailed financial modeling needed to conduct a full-fledged analysis.
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