Abstract
Purpose – This paper aims to report findings froma study on factors that made value for money (VFM)
in private finance initiative (PFI) projects vulnerable to variations. It seeks to identify the top influencing
factors, rank them according to the relative strength of influence, and explore their interactivity.
Design/methodology/approach – The study uses a documentary review of full business cases of
five PFI projects, published reports, and scholarly publications to identify the list of factors; and a
questionnaire survey of 44 PFI projects in the UK to establish the ranking of importance.
Findings – The findings reveal that PFI projects are more strongly affected by client-driven internal
factors than external factors. Internal factors, such as design change in the development phase and
requests for new works or services in the operational phase were also likely to act independently, while
external factors, including conditions for approval, movement in construction costs and change in PFI
guidelines, worked interactively.
Practical implications – The research findings add to the knowledge of priority factors that need to
be addressed to enhance the achievement of long-term VFM in PFI projects.
Originality/value – The study is one of the few studies that have investigated VFM of PFI projects
from a whole life cycle and dynamic perspective. It reveals not only a list of main influencing factors of
project VFM, but also interrelationship between these factors.
in private finance initiative (PFI) projects vulnerable to variations. It seeks to identify the top influencing
factors, rank them according to the relative strength of influence, and explore their interactivity.
Design/methodology/approach – The study uses a documentary review of full business cases of
five PFI projects, published reports, and scholarly publications to identify the list of factors; and a
questionnaire survey of 44 PFI projects in the UK to establish the ranking of importance.
Findings – The findings reveal that PFI projects are more strongly affected by client-driven internal
factors than external factors. Internal factors, such as design change in the development phase and
requests for new works or services in the operational phase were also likely to act independently, while
external factors, including conditions for approval, movement in construction costs and change in PFI
guidelines, worked interactively.
Practical implications – The research findings add to the knowledge of priority factors that need to
be addressed to enhance the achievement of long-term VFM in PFI projects.
Originality/value – The study is one of the few studies that have investigated VFM of PFI projects
from a whole life cycle and dynamic perspective. It reveals not only a list of main influencing factors of
project VFM, but also interrelationship between these factors.
| Original language | English |
|---|---|
| Pages (from-to) | 9-28 |
| Journal | Journal of Financial Management of Property and Construction |
| Volume | 17 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 2012 |
Keywords
- Internal and external factors
- Private finance
- Private finance initiative
- Uncertainty management
- Value for money