Critical success factors for PPP/PFI projects in the UK construction industry

TLDR

Public–private partnerships are increasingly used in the UK for public facilities, yet the reasons for their success remain unclear. A questionnaire survey assessed the relative importance of 18 potential critical success factors for PPP/PFI construction projects in the UK. The study found that a strong private consortium, appropriate risk allocation, and an available financial market are the most important factors, and that these factors cluster into effective procurement, project implementability, government guarantee, favourable economic conditions, and available financial market, informing future policy and partnership development. Keywords include critical success factors, factor analysis, procurement systems, PFI, PPP, and project management; the analysis employed principal component analysis with varimax rotation (Kaiser normalization), converging in 10 iterations.

Abstract

Abstract Public–private partnerships (PPPs) are increasingly used in the United Kingdom's public facilities and services provision through the Private Finance Initiative (PFI). Despite some casualties, PPP/PFI projects have been undertaken successfully, but the reasons for success are not entirely clear. Questionnaire survey research examined the relative importance of 18 potential critical success factors (CSF) for PPP/PFI construction projects in the UK. The results show that the three most important factors are: ‘a strong and good private consortium’, ‘appropriate risk allocation’ and ‘available financial market’. Factor analysis revealed that appropriate factor groupings for the 18 CSFs are: effective procurement, project implementability, government guarantee, favourable economic conditions and available financial market. These findings should influence policy development towards PPPs and the manner in which partners go about the development of PFI projects. Keywords: Critical success factors (CSF)factor analysisprocurement systemsPFIPPPproject management Notes Extraction method: principal component analysis. Rotation method: varimax with Kaiser normalization. Rotation converged in 10 iterations.