Advantages

Disadvantages (and issues that may need managing)

•  Full integration of design, construction, financing, operational, maintenance and refurbishment responsibilities

•  Greater transfer of risk (including price risk) to the private sector at each phase

•  Opportunity to develop innovative solutions

•  Transfer of lifecycle cost risk encourages efficient design and quality construction and finishes - therefore certainty of maintenance standards as agreed and cost certainty as approved for a long term e.g. 25 years

•  Overall design and fit-for-purpose risk lies with the private sector party

•  Potential for lower cost of asset development and service provision

•  Less demand on departmental resources long term

•  Payments commence following successful commissioning

•  Performance standards are in place

•  Success relies on well-defined functional and service specifications

•  Where there are multiple concept designs being developed simultaneously during the bid phase, this can require significant stakeholder resources

•  Changes to design may require contract negotiations

•  The ability to make a variation needs to be addressed in the contract

•  Potential for higher departmental tendering costs (this higher cost should be considered against savings in asset development and service provision through PPP delivery)

•  Requires departmental skills (or consultants) for financial and technical assessment, tendering and management

•  Need to educate stakeholders who are likely to be unfamiliar with this procurement method to ensure that other project success factors are not compromised