Two of the Promoters of the projects evaluated, specifically referred to histories of public-sector cost overruns as a major additional reason for going down the PPP route. The evaluated projects avoided such problems, but this was not because they were PPPs. Rather:
• The Promoter specified its requirements for the project and kept to this specification. In almost all cases of cost overruns and delays which were not caused by exogenous factors, the reason was changes in the technical specifications or work scope after the contracts have been awarded.
• The Provider subcontracted construction to a construction company, often a shareholder in the Provider, on the basis of a fixed-price turnkey contract.
These benefits can be realised in conventional public procurement if the public sector applies the same discipline on specifications and uses fixed-price turnkey contracts. However it is often difficult to replicate the external discipline imposed by the PPP due-diligence process, i.e. from lenders such as the EIB, or to have the in-house skills needed to administer this type of process.
There may also be economies of scale from the PPP route if it enables projects to be undertaken in larger units-e.g. a group of buildings rather than each building being procured individually, or a road procured as one complete project rather than split into sections.