P3 Toolkit: Benefit-Cost Analysis for Public-Private Partnership Project Delivery

Federal Highway Administration2017PDFBriefUnited States. Federal Highway Administration. Office of Innovative Program DeliveryDeCorla-Souza, Patrick T.United States. Federal Highway Administration. Office of Innovative Program DeliveryUnited StatesPublic private partnershipsInfrastructureGovernment agenciesValue for Money (VfM) analysis is frequently used to evaluate Public\u2013Private Partnership (P3) highway concession proposals. VfM considers the financial impacts of choosing a P3 delivery model over a more conventional approach. The analysis is undertaken from the perspective of the procuring agency and does not quantitatively estimate nonfinancial public benefits. For example, the public benefit from accelerated project delivery is one of the key reasons why State and local governments in the United States pursue P3s. The current VfM approach, however, is not yet able to account quantitatively for benefits to travelers and others from delivering a project earlier than would have been possible under conventional procurement. Few attempts have been made to quantify and monetize benefits from accelerated project delivery or other improvements in service quality under a P3. Benefit\u2013Cost Analysis (BCA) could complement VfM analysis to address these issues and contribute to transparency and accountability in the P3 procurement process.109