Over time, the host nations have learned that their highway PPP programs must preserve the public's interest and attract private participation. To some, these may be conflicting objectives. Balancing the two for PPP projects, however, essentially requires that the state and its citizens achieve the following:
♦ Receive a reasonable price
♦ Obtain a marginal value or benefit
Likewise, private participants require the following:
♦ Reasonable risk and reward profiles
♦ Manageable transaction costs
Previous sections of this report have highlighted various practices the nations visited use to facilitate these outcomes. For instance, public sector project and business case analysis methods help identify drivers of life-cycle value as well as appropriate risk-allocation strategies. Emphasis on project outputs enables public decisionmak- ers to pinpoint customer needs and target KPIs to satisfy those requirements. Competitive procurement processes (1) employ phased approaches to filter potential respon- dents down to a select few or (2) fix project requirements and bid parameters to improve transparency and accountability while driving down transaction costs. And the public sector's recognition that latent financial gains are possible in these sorts of arrangements precludes excessive private sector profits and promotes public confidence in government. Measures such as these prompt the private sector to focus its strengths on finding creative and effective solutions for complex projects.