The significance and co-dependency of 'robustness' in PFI projects : a granting authority perspective

Sundaraj, G

Abstract

The Private Finance Initiative or PFI since its introduction by the UK
Government in 1992 has been widely used in the delivery of public service
provision. Furthermore, PFI has been encompassed under a large umbrella of
collaboration known as Public Private Partnerships (PPP). The acceptance of
PFI as a mode of procurement has obtained mixed reviews to the extent that PFI
as an option is mainly seen as being 'the only show in town'. Nevertheless the
potential of PFI in achieving effectiveness and efficiency in the delivery of public
services has been echoed continuously by the HM Treasury. On the other hand,
academia has been divided in their opinion in showing support towards PFI.
The Granting Authorities are the largest providers of public service provision
and the largest consumer of the PFI procurement method. Recent analysis of the
PFI indicates a decline in the number of deals signed in 2009 at 35 and valued at
£4.2bn (compared to 2008 whereby 34 deals were signed and valued at £6.8bn).
This achievement has been severely curtailed as it was estimated that 60 deals
per year over the next decade was required. Certain parties have indicated that
the 2009 financial crisis has been the main contributor. Subsequently the shift
in policies pertaining to PFI with the recent 2010 general elections leading to a
shift in political masters continues to raise concerns of the relevance of PFI as a
procurement method. Therefore the volatile environment, within which PFI
operates, drives this research in exploring the Robustness of PFI in the project
environment from the perspective of the Granting Authority.
The aim of the research is to determine the significance and co-dependency of
robustness within a PFI project environment. This is explored from the
perspective of the Granting Authority as the procurer of services using the PFI
procurement model. In order to achieve the aim of the research, a
constructivist-interpretivism philosophical stance is adopted. The study
explores operational PFI projects within a real-life setting. Hence the
philosophical perspective emphasises a great deal on the social impact brought
about by the human factor that influences the decision making processes pertaining to PFI. The processes that are of focus are Value for Money, Risk
Transfer Assessment and Affordability.
A qualitative research strategy is used to execute the study. This is implemented
using a case study framework whereby multiple embedded case studies are
used. The case studies are used to capture the implementation of PFI projects by
the different types of Granting Authorities in the UK mainly Local Councils and
Government Agencies (NHS Trust). The significant contributions of the research
are the concept of Quantifying Robustness; the Robustness Model; the
documented Case Studies and the Critical Success Factors (CSFsJ for Robustness
for a PFI project environment. The study concludes firstly, that robustness
represents the permissible threshold within which a PFI project remains
progressive subjected to endogenous and exogenous factors. Secondly
robustness plays a significant role in ensuring the progressive nature of the
project. Thirdly the relationship between Risk Transfer Assessment, Value for
Money and Affordability are integrated and parameter hierarchical with
resilience and robustness ensuring the relationship is constantly at equilibrium.
Finally the CSFs for robustness identified through the study are certainty;
mechanisms; relationships; resilience; reliability; project management and
people. The key recommends of the study are firstly, that the approach of
quantifying robustness be further enhanced using advance qualitative tools.
Secondly the robustness model is further validated using similar qualitative
tools. Thirdly that PFI projects by Central Government be included for
comparison and that the CSFs for robustness includes the factors identified for
this projects as well and finally, human resource capabilities and capacity
building through training.
Overall the research has provided an insight to the importance of robustness
within PFI projects. By understanding its role and the dynamics that are
involved, it is inferred that the performance of PFI will be enhanced.
Furthermore the volatile construction market in the UK as well as globally will
benefit largely from the robustness within PFI projects. Subsequently the
stakeholders within the PFI market and the construction industry at large will
be the largest beneficiaries.

• Thesis Type: Thesis
• Deposit Date: Jul 29, 2021
• Award Date: Jul 1, 2012