4. Question 4-How effective and costly has it been to monitor the private sector providers' performance and quality of service in Private Finance projects in comparison with traditional procurement?
4.1 It should be recognised that for all private finance projects, the private sector partner is obliged to commit to high levels of scrutiny and to produce regular performance reports on a monthly basis as required by the senior lenders and the public sector. This covers service availability, end-user satisfaction, financial performance and any deductions. Such extensive information and objective analysis of the performance of traditionally procured projects is not available.
4.2 The performance monitoring is intensive and carries and administration cost. The more detailed the requirements the more expensive it is to provide them. Most organisations are becoming streamlined so they will achieve economies of scale for the reporting process.
4.3 The information collected does allow measurements to be taken on performance levels and for problems to be identified and mitigated before they become material.
4.4 The translation of identified problems into remedial actions is one of the particular strengths of private finance projects. Because of the holistic nature of the service requirements procured, public sector clients will have a single point of contact, increasing the effectiveness of privately procured projects, with whom all performance issues can be raised and dealt with. With projects procured using the traditional route, the composite elements that make up the "whole" of the project are often separate contracts, with no single partner taking overall responsibility for the long-term performance.