Determining whether a project is suited for delivery by PPP is an important, but not daunting, task. A representa- tive for the U.K. Highways Agency indicated that a PPP arrangement is a tool that can provide value for money, but this strategy is unlikely to do so if a project is too grand, too complex, or improperly prepared. "Getting it right is not difficult or a matter of luck," the representative said, but it requires the public sector to define its require- ments clearly and to prepare a project for the market. Accordingly, this section explains how the different nations go about getting it right.
A common attribute among the nations is the importance of long-term transportation and highway plans in their overall capital programming process. Each country has a general master transportation plan, and PPP candidate projects are typically identified from the requirements listed in the master plan. Another common perspective is that projects with reasonable to significant scale and complexity are often viewed as possible PPP arrangements. While scale can offset the substantial transaction costs involved in these projects, both attributes are likely to introduce meaningful risks throughout a project's life cycle. Long-term risk assumption by the private partner is seen as a driver of innovative project concepts and solutions.
Generally Portugal and Spain use similar techniques for analyzing and selecting projects for delivery by PPP, and the United Kingdom and Australia employ comparable methods. Essentially, the principal difference between the pairs of nations is the justification rationale. In Portugal and Spain, a feasibility analysis is conducted during the project programming process. If the majority of a project's market risks can be transferred to the private sector, the project is likely to proceed as a PPP. Alternatively, the United Kingdom and Australia employ a more methodical approach in which a public sector comparator (PSC) is developed and a value-for-money (VfM) analysis is conducted. Generally, a PPP approach is taken only if VfM is expected by following the PPP strategy.