3.9.1  Quantitative VfM Assessment

The quantitative VfM assessment is a crucial step in determining whether a project should be procured as a PPP or not. Therefore, it must be measured on a project-by-project basis and each project would provide a different potential for delivering Value for Money. Quantitative VFM Analysis will assist the PPP Project Team in completing the following critical tasks:

  Establish the PSC for delivering the project through traditional procurement (the BCM);

  Adjust the BCM model for the risks that would be transferred to the private sector under PPP procurement, and determine whether a PPP option is preferable over the traditional method because potential benefits of PPP prevail over the traditional costs; and,

  Evaluate the procurement options accordingly, and, utilise a combination of which option offers the greatest Value for Money and appears the most appropriate one to be implemented on the project.

Quantitative VfM assessment will cover the development of three different models for comparison:

  Base Case Model (BCM);

  Risk-adjusted BCM; and,

  Risk-adjusted PPP Model (to be compared with the risk-adjusted BCM)