8 In some past PPP transactions, the process of preparing a Comparator has been separated from the rest of the PPP procurement. In this case, London Underground has ensured that there has been close co-ordination between its own engineers, technical advisers, and financial and modelling experts. This co-ordination should serve as an example of best practice for future PPP transactions elsewhere in the public sector.
9 As in this case, departments should in future ensure that value for money decisions are not based on one-dimensional comparisons of single figures.
10 Understanding the differences between the private sector and public sector approaches to the same output specification lies at the heart of assessing value for money. In choosing the PPP option, departments must always ensure that they understand how the private sector is delivering value for money, and why, in their judgement, it would not be possible for the public sector to achieve the same value for money. We understand that London Underground intends to undertake such an analysis in this case.
11 Financial modelling is an inherently uncertain technique, as London Underground has clearly recognised in this case. We consider that there may be benefits for future PPP transactions, in terms of time, cost and clarity, in modelling the Public Sector Comparator on a limited basis, with fewer variables and less complexity.
12 The success of a Public Private Partnership requires a genuine alignment of interests between contracting parties to ensure that partnership is more than just a statement of intent. Achieving this alignment means that all parties to and stakeholders in a deal need to be engaged throughout the process.