PPP provides strong incentives to deliver the asset on time and to budget. |
Respondents were asked for their views on the impact of PPP on construction timescales and budget. The most frequently repeated comment was that PPP projects are more likely to be completed on time and within budget, because of the powerful incentive of withholding payments until completion of the asset.
Several respondents commented that the total time for procurement and construction was longer for PPP projects.
Several respondents said that they thought the bid price for PPP projects tended to be higher than for non-PPP projects, but that this reflected the risks transferred. Some commented that the total outturn price of PPP projects was lower or the same as non-PPP projects (taking into account budget overruns on traditionally procured projects).
It was noted that the pressure to meet the agreed timetable in PPP projects led to reduced flexibility to changes during the construction period.