Decision‐Support Methodology for Planning and Evaluating Public‐Private Partnerships

Abstract

Governments at all levels have increasingly turned to public‐private partnerships (PPP) as a source of alternative financing for needed public facilities, in turn providing private developers with new markets on government land for investment and profit. Government agencies need a structured, objective methodology to plan, evaluate, and implement successful PPP projects. A structured methodology, including quantitative simulation models for financial planning, evaluation, and cost justification, is presented and demonstrated. This decision‐support system methodology will minimize the two primary decision errors in public‐private partnerships—accepting unsound or inferior projects and rejecting sound or superior projects.