Value for money on PPP expansions
A number of major transport projects are presently being
delivered under Public Private Partnership (PPP) contracts. In each
case, it was likely from the outset that the new transport system
would be extended during the life of the PPP contract.
However, PPP contracts can be inflexible, relative to other
contractual delivery models, when it comes to making changes to a
project. This lack of flexibility can leave government vulnerable
to private sector profiteering on the commercial terms of
significant extensions.
This paper considers how governments can manage this
vulnerability when contracting under a PPP contract. It also
considers whether alternative contractual models might provide
government with better value for money over the longer term.
