The Value Proposition of Projects analysis has been criticized for an exclusive focus on quantitative analysis, which at time faces the following difficulties:
1. Inaccuracy/inadequacy of data
2. Incomplete identification of key risks
3. Lack of consensus on discount rates
4. Time inconsistency (post-analysis, inordinate delays in actual bidding)
5. Analysis may be very expensive
6. No robust public sector alternative/comparator
7. Difficulty in establishing an accurate PSC ex ante, where the public entity's expenditure is based upon distributed assets unlike ring-fenced costs as in cases where projects are developed under PPP framework.
To overcome these shortcomings it is imperative that the analysis is done with due regard to the following considerations:
1. A balanced approach should be adopted in the assessment of value through a comparison of traditional procurement and PPP procurement.
2. The tendency for appraisers to be overly optimistic in estimating key parameters for PPP projects should be explicitly countered through empirical evidence of this "optimism bias" from past projects.
3. The quantitative comparison should be considered just one aspect of appraisal, to be used only in conjunction with a qualitative analysis that looks at a project's potential distributional effects and the track record of similar projects.
The focus should be on making good use of databases in estimating project costs.