Time comparison
In terms of time performance for the full project period (i.e. original announcement to actual final) there is very little difference in performance between PPPs and Traditional projects as evidence by:
O Based on averages Traditional projects are 2% closer to the estimate than are PPPs over the full project period.
O Based on median results PPPs are 5.3% closer to the estimate than Traditional projects over the full project period. Both PPPs and Traditional projects have similar inter-quartile ranges in their results, refer Figure 6.
O Normalised results show that 7.1% more PPP projects finish on time than Traditional projects refer Table 10, based on the number of projects.
| Conclusion 6: | Over the period from initial announcement of a project to when it is finally commissioned PPPs and Traditional projects are delivered with the same confidence in the likely overall time performance. |
Albeit that the overall time performance is similar, the spectrum of time performance over the project initiation and delivery periods for PPPs and Traditional projects are quite different in time performance. It is likely that this difference is related to the different processes adopted for either procurement methodology.
This point is evident from the statistical, percentile and number of projects late results and the trends of the timing information are consistent regardless of the analysis undertaken. These trends are graphically illustrated in Figure 8.
Figure 8: Time performance over project initiation and delivery (source: Duffield 2008)
It is concluded that:
| Conclusion 7: | During the period prior to project execution, PPP projects are frequently delayed (average 14.8%). However, once PPP projects reach financial close there was only, on average, a further 2.6% delay to these projects. This indicates that PPP contracts are well developed prior to release to market and changes after financial close are minimal. |
| Conclusion 8: | Predictions of the duration to reach commissioning are optimistic for Traditional projects with estimates of duration being on average 18.1% early at budget and 19.4% early at contract execution when compared to the actual final outcome. An average delay of 25.9% occurs during the construction phase of Traditional contracts. These delays may be due to: the initial optimism and/or required changes after contract signing to achieve Government's requirements, and/or due to uncertain contractual terms or risk allocation. |
The factor correlation analysis, refer Table 11, has identified a number of issues that are worth mentioning and may warranted further investigation in the future, namely:
• The value of a project is significant in respect to the overall cost performance (i.e. the larger a project the particularly true for Traditional projects where there is a strong correlation between the size of a project and its susceptibility to budget over-runs.
• The duration of a project influences a projects performance:
o PPP having a relatively short procurement period (less than six months) are frequently delayed and the short duration offers little opportunity to recover lost time, however the loss of time does not translate into cost over-runs;
o Similar short duration Traditional projects frequently run over budget when delays occur.
• There are different project outcomes depending on the particular jurisdiction. This is evident in respect to time and cost for PPP projects and in the cost performance of Traditional projects.
• PPP projects are improving in their time performance. Traditional projects are also improving on time performance but to a lesser extent than PPPs.