Ex-post evaluation tool for PPP projects

By Jose Oliveros

Public Private Partnership (PPP) is a way to deliver public infrastructure using private funding and managing risk for public purposes. PPP’s are a model of procurement for infrastructure projects around the world, such as toll roads, hospital, schools, power plants, social housing, and prisons.

Currently, PPPs have been criticised in the media, social media and academia. Their main criticism is about the non-achievement of real public welfare (Heald, 2003). The arguments are related to: 1) the amount of profit that is conferred to the private entity; 2) the long term implications for the public sector in term of service payments; 3) the quality of the service which can be driven by cost reduction goals; among other.

There is a need for more accountability, more transparency and more involvement of society in public interest issues

From a taxpayer point of view, the impact of PPP projects, like any kind of public investment, should be assessed and analysed, especially if a private company is making profit with it. One relevant instrument to protect the taxpayers’ interest is an ex-post evaluation. This evaluation should state the impacts on the stakeholders that the PPPs could have produced in their life-cycles; negatives and positives. The problem is that a PPP ex-post evaluation is difficult to perform due to three main reasons: projects are large and complex; different perceptions of the impacts and, the time horizon for the evaluation can be up to 20 years. An assessment to state the real contribution to society of social Infrastructure PPP projects is complex but extremely relevant from the taxpayer’s view.

The problem to be addressed by this research is the lack of a method to assess the impact of the delivery and the outcome of a social infrastructure PPP project on stakeholders. The arguments that support the problem are (1) the real concern about the performance of PPPs and their impact in public welfare; (2) the nonexistence of a PPP ex-post evaluation method that can support taxpayers’ interests, and (3) the existing gap in knowledge regarding the use of project success to develop an Impact evaluation.

The research question is: How to assess the impact of a social infrastructure public-private partnership project on the stakeholders?

The outcome of the research is an ex-post evaluation tool that is designed using the existing literature and insights from experts in the field. The research method is called Design Science, which uses an iteration process to develop and test any design ‘artefact’ such as a tool, software or any designed product. The developed tool will be applied in two case studies; both are social housing projects that were developed using PPPs in Australia and Chile. From a public interest perspective, the research aims to create better accountability and improve public expenditure by providing an alternative method to assess past projects. Moreover, the research contributes to the current discussion about the worth of PPPs, and if they should exist or not.