Perceptions of positive and negative factors influencing the attractiveness of PPP/PFI procurement for construction projects in the UK

TLDR

PPP/PFI procurement is claimed to deliver broad net benefits to both public and private sectors, yet project decisions rely on appropriate evaluation criteria. This study reports findings on UK perceptions of factors that make PPP/PFI attractive or unattractive, aiming to inform early business‑case decisions. A postal survey, informed by a literature review of relevant factors, collected primary data that was analyzed descriptively and via rotated factor analysis. Respondents viewed PPP/PFI as attractive for better technology, economic gains, public benefit, regulatory avoidance, and transaction‑cost savings, but unattractive due to participant inexperience, over‑commercialisation, and high cost/time.

Abstract

Purpose The paper aims to report the findings of research into perceptions of what makes the Private Finance Initiative (PFI) attractive or unattractive as a procurement system for projects in the UK. Design/methodology/approach The research uses a postal survey questionnaire technique for primary data collection. Literature review is used to identify relevant factors, which are then incorporated into the design of the survey instrument. Survey response data is subjected to descriptive statistical analysis and subsequently to rotated factor analysis. Findings Public/private partnerships (PPP)/PFI project procurement is perceived as most attractive in terms of positive factors relating to better project technology and economy, greater public benefit, public sector avoidance of regulatory and financial constraints, and public sector saving in transaction costs. Negative aspects, relating to factors such as the inexperience of the participants, the over‐commercialisation of projects, and high participation cost and time, make PPP/PFI procurement less attractive. Originality/value The procurement of public facilities and services under arrangements involving partnerships between the public and private sectors is claimed to provide a wide variety of net benefits to the public sector and to the private sector participants. In the project development process, the parties have to make decisions based on suitable evaluation criteria. At the early stage of preparing a business case, a clear and common understanding of the positive and negative factors surrounding PPP/PFI procurement will provide a more informed basis for decision making.