PPPs have been found to reduce construction time and cost overruns for new infrastructure assets, compared to traditional public procurement.
In the United Kingdom, the National Audit Office surveyed the proportion of PPP projects coming in over budget or late, and compared this with previous assessments of the performance of publicly-procured projects. PPPs out-performed public projects, particularly on cost-although the difference was lower in 2008 than in 2003. As also described in the House of Lords' review of the PPP program, improvements in public procurement in the United Kingdom may be narrowing the gap with PPPs [#248, pages 19-20].
In Australia, two studies have broken down the project development process to allow more detailed comparison. PPPs consistently perform better in achieving lower project cost over-runs. Comparing the timing of project delivery, both PPPs and traditionally-procured projects both took longer than expected. These studies support the claim regarding higher accuracy of estimates built into signed PPP contracts relative to traditional procurement. However, they are inconclusive on whether the PPPs projects are necessarily more economical than traditionally procured projects. The studies suggest delays occur at different stages of the process. The complex contracting process means PPPs can experience delay at an earlier stage in the process, but tend to come in on time once contracted. Publicly-procured projects may be contracted more quickly, but this is more than offset, on average, by delays in implementation.
A selection of these studies is summarized in Table 1.3: Comparing PPP and Public Procurement in the United Kingdom and Table 1.4: Comparing PPP and Public Procurement in Australia.
Table 1.3: Comparing PPP and Public Procurement in the United Kingdom
| Source | Comparison | Proportion of Projects Over Budget (%) | Proportion of Projects with Time Over-run (%) | ||
| Public | Public | ||||
| National Audit Office, 2003 | Contract award to final | 22% | 73% | 24% | 70% |
| National Audit Office, 2008 | Contract award to final | 35% | 46% | 31% | 37% |
Table 1.4: Comparing PPP and Public Procurement in Australia
| Source | Comparison | Average Over Budget (% of original cost estimate) | Average Time Overrun (% of original time estimate) | ||
| Public | Public | ||||
| Infrastructure Partnerships Australia, 2007 | Original appr oval to final | 12% | 35% | 13% | 26% |
| Contract to final | 1% | 15% | -3% | 24% | |
| Original announcement to final | 24% | 52% | 17% | 15% | |
| Budget approval to final | 8% | 20% | 12% | 18% | |
| Contract to final | 4% | 18% | 1.4% | 26% | |
Construction companies interviewed by the United Kingdom National Audit Office indicated that the PPPs 'impose a greater discipline' in regard to cost certainty for projects. This is because PPPs usually do not allow for contract price to be adjusted for changes in costs, and private financiers have greater scrutiny over the specifications of the project. That is, private companies' returns on a PPP depend on bringing the project in on time and on budget-creating stronger incentives than under public procurement, where changes to project cost are often at the expense of the contracting authority. In turn, this means private companies make more careful and conservative estimates of costs in the first place, helping reduce the optimism bias described in Section 1.3.2: Poor Planning and Project Selection.