Establishing key elements for sustainable PFI projects: A critical literature review
The concept of value for money (VFM) is the fundamental reason for most PFI projects to be attractive in many developed and developing countries. The concept encourages governments to deliver Mega projects by using PFI procurement method. The aims of this paper are to investigate the notion of VFM for PFI projects by different countries (i.e. UK, Australia and Japan) and to discover the detailed components of Public Sector Comparator ( PSC ) protocol to evaluate VFM. Based on the consideration of these models, the paper proposes a framework of VFM assessment for PFI projects in Malaysia. The proposed framework outlines six processes to be considered: key assessment criteria (affordability, risk sharing and competition) of VFM assessment; VFM assessment approach by using PSC; VFM appraisal by application of three tests (financial, qualitative and cost benefit analysis); VFM drivers; benefits; and barriers that could affect the VFM assessment process. Hence, achieving VFM can be described in terms of three core components; economic, efficiency and effectiveness of PFI projects. The framework developed in this paper will help to gain a better understanding of VFM in PFI projects and to establish PSC guideline in the evaluation of VFM.