- Title
- Risk management in PPPs: emerging issues in the provision of social infrastructure
- Creator
- Firmenich, Jennifer; Jefferies, Marcus
- Relation
- New Forms of Procurement: PPP and Relational Contracting in the 21st Century p. 71-94
- Relation
- Spon Research
- Relation
- https://www.routledge.com/New-Forms-of-Procurement-PPP-and-Relational-Contracting-in-the-21st-Century/Jefferies-Rowlinson/p/book/9781138796126
- Publisher
- Routledge
- Resource Type
- book chapter
- Date
- 2016
- Description
- Life-cycle orientation is a driver of economical, ecological and social sustainability in three main ways. First, the optimization of life-cycle cost instead of investment cost usually leads to cost savings in the long run and thus economical sustainability. Second, the economical sustainability is linked to ecological sustainability via the likes of energy costs. For example, the level of current and future energy costs justifies higher initial investments for energy and thus cost saving. Third, the social sustainability of the infrastructure's users is influenced by the design of the operation, maintenance and replacement processes over the infrastructure's life time. Life-cycle orientation is a key element of Public-Private Partnership (PPP) projects. PPP procurement is usually an alternative to traditional procurement. In theory, PPP is pursued if the Public Sector Comparator indicates that PPP generates efficiency gains leading to cost savings over the life-cycle in comparison with traditional procurement. In practice, PPP is often used by the public client as a mean to finance the initial investment. In this case, the initial investment will be provided by the private consortium using loans and private equity. The funding is provided either by users or by the public authorities with an availability payment during the contractual operation period. Therefore risk management of such life-cycle-oriented projects is an essential success factor to achieve the intended life-cycle optimization and/or alternative financing. The findings of this chapter provide a thorough theoretical grounding for the specific case study findings discussed by Jefferies and McGeorge in Chapter 9.
- Subject
- public works; construction projects; public-private sector; risk management; social infrastructure
- Identifier
- http://hdl.handle.net/1959.13/1334384
- Identifier
- uon:27275
- Identifier
- ISBN:9781138796126
- Language
- eng
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