SRQ780

SRQ780
Strategic Construction
Procurement
Week 4
Procurement Methods – Part C
Dr Xin Hu
Level 4 - John Hay Building
Deakin University, Geelong
Tel: +61 3 522 78304
Deakin University CRICOS Provider Code: 00113B
E-mail: xin.hu@deakin.edu.au
Teaching Team
Unit Chair, Lecturer & Tutor – Dr Nilupa Udawatta

 E-mail: nilupa.udawatta@deakin.edu.au
 Discussion Board on CloudDeakin
 By appointment - in person
Lecturer & Tutor - Dr Xin Hu

 E-mail: xin.hu@deakin.edu.au
Tutor - Dr Dominic Doe Ahiaga-Dagbui

 E-mail: dominic.ahiagadagbui@deakin.edu.au
Unit Timeline
Week Commencing Class Topic Delivered by Bb Collaborate Sessions Assignments Due Dates
1 9 March Introduction to the unit and overview of Nilupa
construction procurement
2 16 March Procurement Methods – Part A Xin Session 1 - Thursday, 19
March 2020 at 6.30pm
3 23 March Procurement Methods – Part B Xin
4 30 March Procurement Methods – Part C Xin A1 (Individual) – Strategic
Procurement Report (20%)
5 6 April Contract Payment Options and Tendering Xin Session 2 - Thursday, 9
Process April 2020 at 6.30pm
6 20 April Subcontracting Practices and Construction Nilupa
Contract Risk
7 27 April Guest Lecture Guest Session 3 - Thursday, 30

Lecturer April 2020 at 6.30pm
8 4 May Introduction to Standard Forms of Contract in Nilupa A2 (Individual) – Tender
the Australian Construction Industry and Evaluation Report (30%)
Variations
9 11 May Critical Clauses of Standard Forms of Contract Nilupa Session 4 - Thursday, 14
May 2020 at 6.30pm
10 18 May Alternative Dispute Resolution Methods Xin

11 25 May Innovation in Strategic Construction Nilupa Session 5 - Thursday, 28
Procurement and Review May 2020 at 6.30pm
12 1 June A3 (Group) – Critical Analysis
3
(50%)
Procurement strategy - Elements
– A statement of objectives
– A summary and analysis of project objectives, requirements, characteristics, risks,
client capabilities etc.
– Analysis and recommendation of procurement/delivery routes:
 Traditional route
 Design and construct route
 Management routes
 Collaborative routes such as partnering
 Integrated routes such as PPP
– Analysis and recommendation of contract pricing options:
 Lump-sum contracts
 Measurement contracts
 Reimbursement contracts
– Analysis and recommendation of tendering methods:
 Open tendering
 Selective tendering
 Etc…
– Procurement approaches
– Analysis and recommendation of form of contract and contract administration
4  Forms of contracts
Deakin University CRICOS Provider Code: 00113B  Contract administration arrangement
Types of procurement routes
1. Traditional route
2. Design and construct
3. Managing contractor
4. Construction management
5. Direct managed
6. Early contractor involvement (ECI)
This week’s Outline:
7. Partnering and alliancing
1. Structure
8. Integrated Project Delivery (IPD) 2. Characteristics
9. Public Private Partnership (PPP) 3. Advantages
4. Disadvantages
5. Risks/suitability
5
Integrated
Project Delivery
(IPD)

Integrated Project Delivery (IPD)
Change is now ….
Technological evolution coupled with owners’ on-going demand

for more effective processes that resulted in better, faster, less
costly and less adversarial construction projects are driving
significant and rapid change in the construction industry;
7
Integrated Project Delivery (IPD) is a project delivery approach

that integrates people, systems, business structures and practices
into a process that collaboratively harnesses the talents and
insights of all participants to optimize project results, increase
value to the owner, reduce waste and maximize efficiency
through all phases of design, fabrication and construction;
8
Deakin University CRICOS Provider Code: 00113B Source: American Institute of Architects (2007)
IPD leverages early contributions of knowledge and expertise

through utilization of new technologies, allowing all team
members to better realize their highest potentials while
expanding the value they provide throughout the project
lifecycle;
At the core of an integrated project is collaborative, integrated

and productive team composed of key project participants;
9
In most traditional project delivery methods, participant success

and project success are not related. Indeed, it is quite possible for
one or more project participants to “succeed” notwithstanding
overall project failure;
IPD represents a change in the construction industry by requiring

close collaboration among all major participants, and aligning
participant success to project success;
10
IPD
Teams An integrated team entity composed key project

stakeholders, assembled early in the process, open,
collaborative;
Process Concurrent and multi-level; early contributions of
knowledge and expertise; information openly shared;
stakeholder trust and respect;
Risk Collectively managed, appropriately shared;
Compensation/reward Team success tied to project success; value-based;
Communications/technology Digitally based, virtual; Building Information

Modelling (3, 4 and 5 dimensional)
Agreements Encourage, foster, promote and support multi-lateral

open sharing and collaboration; risk sharing;
11
Principles of IPD
 Mutual respect and trust;

 Mutual benefit and reward;
 Collaborative innovation and decision making;
 Early involvement of key participants;
 Early goal definition;
 Intensified planning;
 Open communication;
 Appropriate technology;
 Organization and leadership;
12
IPD - Advantages
 Collaboration and efficiency improvement;

 Increased transparency;
 Early and open sharing of project knowledge and experience;
 Better understanding about project owner’s requirements;
 Improve project team’s ability to control cost and manage the
budget;
 Improve project time, quality and financial performance (e.g.,
contribution of different project parties at the early stage);
 Strong pre-construction planning, and identify and address
design issues (improved buildability and reduce rework);
 Better risk identification and management;
13
IPD – Challenges
 Early investment required;

 Trust is not automatic (a lot of time/resources are needed
to develop and maintain good relationships between key
project parties);
 Not familiar with IPD (e.g., training/education may be
needed);
 Complexity of IPD system;
14
Public Private
Partnership (PPP)

Public Private Partnership (PPP)
Public infrastructure and the involvement of the private sector
 Public infrastructure: Facilities that are necessary for the functioning of the
economy and society;
 Economic infrastructure: infrastructure considered essential for day-to-
day economic activity (e.g., roads, bridges, tunnels, water facilities, …);
 Social infrastructure: infrastructure where the community can access
social services (e.g., schools, hospitals, libraries, prisons, …);
 Government plays a crucial role in the provision of public infrastructure:

 by direct provision, or
 by the facilitation of private-sector provision;
16
What is PPP?
 Long-term relationships involving the private sector in the provision of

public services that in many cases had previously been entirely the
responsibility of the public sector (Broadbent and Laughlin, 2004);
 A long-term contract between a private party and a government entity,

for providing a public asset or service, in which the private party bears
significant risk and management responsibility, and remuneration is
linked to performance (World Bank, 2014);
Broadbent, J., & Laughlin, R. (2004). PPPs: Nature, development and unanswered questions. Australian Accounting
Review, 14(33), 4-10.
World Bank (2014). Public-Private Partnerships Reference Guide: Version 2.0, https://ppp.worldbank.org/public-
private-partnership/library/public-private-partnerships-reference-guide-version-20
17
Why PPP?
 Financial and fiscal constraints,

and the growing demand for
economic and social infrastructure
(The 2020 infrastructure priority
list:
https://www.infrastructureaustrali
a.gov.au/sites/default/files/2020-
02/current_priority_list_%20febru
ary_2020.pdf);
 Introducing private sector
technology and innovation in
providing better public services
through improved operational
efficiency;
18
Main models of PPP
 Build-operate-transfer (BOT) - the private sector builds a facility,

operates it over the period of the contract, and transfers the property
element to the public sector at the completion of the contract;
 Build-own-operate (BOO) - similar to BOT, but the facility is not
transferred to the public sector at the end of the contract period, i.e.
the private sector owns the facility, e.g. power sector;
 Build-own-operate-transfer (BOOT) - a BOO scheme except that the
ownership is transferred to the public sector at the end of the contract;
19
20
https://infrastructure.org.au/chart-group/public-private-partnerships-by-jurisdiction/
Case in Australia: New Schools Public Private Partnership (PPP) Project
 In 2015, the state government of Victoria entered in to a Public Private

Partnership contract with Learning Communities Victoria (LCV) to finance,
design, construct and maintain 15 school facilities in some Victoria’s key growth
areas (including a 25 year operating term);
 The project has a capital value of $291 million;
More information: https://www.dtf.vic.gov.au/sites/default/files/2018-01/Project-Summary_New-Schools-PPP-Project.pdf

21
Globally, ….
$2.7 trillion in 2020
22 Infrastructure investment trend

Deakin University CRICOS Provider Code: 00113B Source: https://outlook.gihub.org/
For instance, in Europe (1990-2018):

 Number of PPP projects: 1841
 Total value of PPP projects: 383.2 EUR bn
23
Distribution of PPP projects in Europe
Source: https://data.eib.org/epec/country/all
 PPP refers to complex

Government collaborations;
Equity investors
Equity
Special Purpose Vehicle
 Generally, three key parties
Debt involved:
Lenders
 1. The public sector client;
Contractor
Operation and maintenance
(O&M) contractor
 2. The private sector
provider of the required
Subcontractors Subcontractors service;
 3. Funders/lenders and
investors;
A form of PPP organizational structure
24
PPP key features:
 The public sector client instigates the project to advance its primary
strategy;
 The public sector client may be a central government department, a
state/regional/local government, a public agency, etc.
 The public sector client engages a private sector provider to deliver
services over a long time, such as 20-35 years (long-term arrangement);
 The public partner may contribute to the capital investment;
25
PPP key features:
 The private sector provider is responsible for construction, financing, operation,

and maintenance (whole-of-life approach);
 The private sector service provider comprises several private sector
organisations that collaborate to provide the service via the Special Purpose
Vehicle (SPV);
 The SPV is a legal entity created by the collaborating private sector organisations
that:
 procures design, construction and operating expertise from the
construction industry;
 secures finance from funders/lenders and investors; and
 distributes risks inherited from the client;
 The private sector bears many risks:
 Financing risks;
 Demand risks (continuity and certainty);
26
 Technological risk;
 …
PPP key features:
 Funders/lenders and investors influence the private sector service

provider to ensure they will earn the required return on their investments;
 PPP establishes an enduring and stable relationship among participants,
rather than simple, one-off transaction between the public and private
sectors;
 Service focus – Emphasis is placed on the service or capability that the
public sector requires rather than the assets used to provide them;
 The client's functional requirements for the proposed development should
be clearly defined (output-based specification);
 Public interest – this should be well considered by government as part of
the overall investment evaluation;
27
 Payment for services: The essence of the PPP approach is that

government is buying services with an agreed quality, quantity, cost and
timeframe.
1. Where there is a user-pays arrangement (e.g., in economic

infrastructure), the payment to the private party depends on users’
receiving of a service (for which they then pay). The revenue generated
usually becomes the main source of security for debt repayment;
2. Alternatively, the government provides the private party with the

payments that are contingent on their performance. If a service is not
provided on time or is not of agreed quality or quantity, service
payments to the private sector party may be reduced;
28
Public Private Partnership
(PPP)
Key phases in the delivery of PPP

projects:
1. Project development;
2. Express of interest (EOI);
3. Request for Proposal (RFP);
4. Negotiation and completion;
5. Contract management;
29
Deakin University CRICOS Provider Code: 00113B Source: National Public Private Partnership Guidelines – Overview
Key phases in the delivery of PPP projects:
1. Project development:
Ensure readiness for seeking formal market interest (e.g., assemble
resources, develop project plan and timetable, etc.);
2. Express of interest (EOI):
Develop the EOI document; Evaluate EOI responses, and shortlist bidders;
3. Request for Proposal (RFP):
The release of the RFP, and evaluation of RFP responses to select a preferred
bidder;
4. Negotiation and completion:
Establish the contract negotiation team and framework; Contract is
awarded to the successful private party; Reaching financial close;
5. Contract management:
Construction stage; Service delivery stage; Contract expiry or termination
stage;
30
Deakin University CRICOS Provider Code: 00113B Source: National Public Private Partnership Guidelines – Overview
 Value for money:
Value for money is a key principle of PPP projects, and includes both a quantitative
and qualitative assessment of the benefits of the private sector proposals;
 The quantitative assessment is assisted by the use of the Public Sector

Comparator (PSC). The PSC is a whole-of-life net present cost model that
reflects government retaining ownership and responsibility for
construction/redevelopment and ongoing management of the project;
 The PSC is the benchmark in the assessment of value for money during the
tender process and the evaluation and comparison of RFP responses. The RFP
responses will be assessed against the PSC to determine whether they offer
value for money (whether private sector delivery offers better value for money
than traditional procurement);
31
 PSC components:
 Raw PSC – the capital and operating costs associated with delivering the
output specification over a defined period;
 Competitive neutrality adjustment – remove advantages that accrue to a
government business which are not equally available to a bidder;
 Transferred risks – risks that are likely to be transferred to the private sector
under the PPP arrangement;
 Retained risks – risks that government will bear by itself under the PPP
arrangement;
 The qualitative assessment looks at all other factors including certainty of

delivery, quality, efficiency of design, etc.
32
 Source of funding from the private sector to meet the funding

Major gap of the public sector client, and less financing pressure of
advantages: government;
 Cost-effective delivery of public services through purchasing
from the private sector;
33
Source: Reimaging Public Private Partnerships (PWC)
Major
advantages:
 Full integration of design, construction, financing, operation, and
maintenance responsibility;
 Risk transfer to the private sector (this encourages efficient design
and quality construction, and incentivizes the private sector to
deliver projects on time and within budget);
 Facilitate innovative approaches from the private sector;
 Access to skills, experience and technology - developing local
private sector capabilities through joint ventures with large
international firms;
34
Major
disadvantages:
 Higher financial cost of the private sector (compared with government);
 Possibility of revenue generated by the project is well below than that of
predicted (e.g., Cross City Tunnel);
 Risk transfer may be not real (government may need buy back to
improve service level if the private sector cannot provide adequate
service levels, e.g., Metropolitan Women’s Correctional Centre in VIC);
 Insufficiently flexibility (changes should be agreed by different project
parties);
 Stakeholder education/training required (some project parties are likely
to be unfamiliar with this procurement system);
35
Major
disadvantages:
 Complex structure and arrangement (huge administrative work,

complex project management over the life of the project);
 The possibility of limited number of private entities (PPP is usually used
for complex projects);
 Project risks can be difficult to predict (long-term, complexity nature);
36
Risk allocation:
Main risk Government SPV Contactor O&M
contractor
Design & construction risks √
Operation & maintenance risks √
Site access; legal challenge to √
planning approval
Loss or damage to facility during √
design and construction stage
Loss or damage to facility during √
operation and maintenance stage
Default/Insolvency of contractors √
Default/Insolvency of SPV √
37
Policies and guidelines for PPPs in Australia:

 National PPP policy and guidelines (Department of Infrastructure, Transport, Regional Development
and Communications, https://www.infrastructure.gov.au/infrastructure/ngpd/index.aspx);
 NSW Public Private Partnerships Guidelines (NSW Treasury,
https://www.treasury.nsw.gov.au/projects-initiatives/public-private-partnerships/policy-guidelines-
and-publications)
 Partnerships Victoria (Department of Treasury and Finance, https://www.dtf.vic.gov.au/public-
private-partnerships/policy-guidelines-and-templates);
 Guidelines for public private partnerships (ACT Treasury,
https://apps.treasury.act.gov.au/__data/assets/pdf_file/0010/869941/Guidelines-for-PPPs-Second-
Edition.pdf);
 Public Private Partnership Specific Guidance (Western Australian Government,
https://www.wa.gov.au/government/document-collections/public-private-partnership-specific-
guidance);
 Queensland PPP Supporting Guidelines (QLD Government, https://s3.treasury.qld.gov.au/files/paf-
supporting-guidelines.pdf);
38
Case Study: City Link
 CityLink is a 22-kilometre automated tollway

divided into two sections:
 The Southern and Western Links;
 It integrates connections to the Tullamarine
Freeway, the West Gate Freeway and the
Monash Freeway;
 Private Sector Project with concession period 34
years;
 Estimated Budget: $1.8 billion;
 Final Cost at Completion: $2.0 billion;
 Estimated Construction duration: Approx. 2 years;
 Actual Construction duration: Approx. 4 years;
39
City Link
40 City Link project location

Source: Mega projects in transport and development: Background in Australian case studies (Muhammad, Low, & Glover, 2006)
City Link
 Transurban CityLink –
the private developer;
 TOJV – design and
construction, but work
directly only on the
southern link;
 BHE – subcontractor for
the construction of the
western links;
 TLO – ongoing operation
and maintenance;
City Link project structure

Source: Mega projects in transport and development: Background in Australian case studies (Muhammad, Low, & Glover, 2006)
41
City Link
42 Benefits of City Link

Deakin University CRICOS Provider Code: 00113B Source: The economic impact of Melbourne City Link (The Allen Consulting Group Pty Ltd, 1996)
Procurement Option
Analysis (OPA)

Procurement option analysis
Having learned a wide range of procurement systems, how

to analyse them when there is a need of choosing a suitable
procurement system for a given construction project?
 Selecting a procurement option that is inappropriate for a

project has the potential to increase project risk and negatively
impact the achievement of a value-for-money outcome;
 A thorough procurement optional analysis will substantially
reduce risks;
44
As the procurement selection is a decision-making process,

it is necessary to understand the process of decision-making
and choice in general;
45
Decision-making is more than a

result. It is a dynamic and
iterative process that can include
several steps.
Standard Decision-making Process
46
Deakin University CRICOS Provider Code: 00113B Source: Introduction to Building Procurement (Brian Greenhalgh & Graham Squires)
Implications of the general decision-making process for the

selection of procurement system:
 A framework that enables the organizations to move through

the decision-making process in an orderly and efficient
manner;
 The framework should provide logical steps to help identify
procurement problem, set procurement objectives, consider
constraints (e.g., knowledge, experience, resources), identify
procurement options, and make choice;
 The framework should help consider the use of the selected
procurement in practice, and suggest remedial action if any;
47
There is currently no established framework for doing this. However, the

following four steps can be followed:
Step 1: Identifying the characteristics and culture of the client and that of
their organization (e.g., needs and requirements, constraints, risk
preference, project objectives, project features);
Step 2: Understanding available procurement systems, and their details
(e.g., key features, advantages/disadvantages, risk issues, suitability, and
implementation process);
Step 3: The development of a range of procurement selection criteria
specific to the project;
Step 4: An evaluation of different procurement systems against those
criteria (a weighted selection model);
48
Step 1: Identifying the characteristics and culture of the

client and that of their organization;
 Needs and requirements;
 Constraints;
 Risk preference;
 Project objectives;
 Project features;
WEEK 1
49
Step 2: Understanding available

procurement systems, and their
details
 Key features;
 Advantages/disadvantages;
 Risk issues;
 Suitability;
 Implementation;
50
WEEK 2, 3 and 4
Step 2: Understanding
available
procurement systems,
and their details
WEEK 2, 3 and 4
A summary about different procurement systems;

51
Source: Introduction to Building Procurement (Brian Greenhalgh & Graham Squires, 2011)
Step 3
Step 3: The development of

a range of procurement
selection criteria specific to
the project:
 Client objectives;
 Project characteristics;
 External environment;
Step 4
52 Construction procurement selection process

Deakin University CRICOS Provider Code: 00113B Source: Formulating procurement selection criteria through case-based reasoning approach
(Luu, Ng, & Chen, 2005)
Step 3 Example: Procurement selection criteria
53 Source: Introduction to Building Procurement (Brian Greenhalgh & Graham Squires, 2011)

Step 3
Step 4: An evaluation of different
procurement systems against those
criteria (A weighted selection
model);
 Step 4.1: A weighting is allocated

to each selection criterion, which
represents their importance to
the client (priority). For instance,
the weighting can range from 1 –
5 (5-point Likert Scale);
Importance Weighting
Very important 5
Important 4
Neutral 3 Step 4
Low important 2
54 Not at all important 1 Construction procurement selection process
Source: Formulating procurement selection criteria through case-based reasoning approach
(Luu, Ng, & Chen, 2005)
Step 4.1 Example: A weighting is allocated to each selection criterion;
55
Step 3
Step 4: An evaluation of different
procurement systems against those
criteria (A weighted selection
model);
 Step 4.2: For each procurement

option, a score will be given to
each criterion to represent their
utility (Ability to meet project
requirements). For instance, the
score can range from 1 – 10 (10-
point Likert Scale);
 Step 4.3: For each procurement

system, calculating the weighted Step 4
sum of scores, comparing and
56
making decisions; Construction procurement selection process
Source: Formulating procurement selection criteria through case-based reasoning approach
Deakin University CRICOS Provider Code: 00113B (Luu, Ng, & Chen, 2005)
Scores of the criterion “Timing”

Step 4.2 Example: Score of each criterion; in each procurement system;
57
Step 4.3 Example: Weighted Sum
Deakin University CRICOS Provider Code: 00113B 143 = 4×4+1×8+2×8+4×8+3×10+3×5+2×5
Useful References
 Australian Government, 2008, National Public Private Partnership Guidelines Overview,

https://infrastructure.gov.au/infrastructure/ngpd/files/Overview-Dec-2008-FA.pdf, accessed on 11 December 2017
 Baldry, D 1998, ‘The evolution of risk management in public sector capital projects’, International Journal of Project Management,
vol. 16, no. 1, pp. 35–41.
 Broadbent, J & Laughlin, R 2004, ‘PPPs: Nature, development and unanswered questions’, Australian Accounting Review, vol. 14,
no. 2, pp. 4–10.
 Deloitte, 2006, Closing the Infrastructure Gap: The Role of Public-Private Partnerships, accessed on 11 December 2017
https://www2.deloitte.com/content/dam/Deloitte/ie/Documents/Finance/Corporate%20Finance/2006_closing_infrastructure_g
ap_deloitte_ireland.pdf
 DFA, 2005, Department of Finance and Administration, Public Private Partnerships: Guideline: Commonwealth Policy Principles
for the Use of Private Financing: Introductory Guide, Australian Department of Finance and Administration (DFA), Canberra,
Australia.
 DTF, 2012, Project governance, www.dtf.vic.gov.au/files, accessed on 11 December 2017
 Hayford, O. 2006, ‘Successfully allocating risk and negotiating a PPP contract’, Proceedings from the 6th Annual National Public
Private Partnerships Summit: Which Way Now for Australia's PPP Market?, 16–17 May, Rydges Jamison, Sydney.
 Hodge, G 2004, The risky business of public-private partnerships, Australian Journal of Public Administration, vol. 63, no. 4, pp.
37-49.
 Hood, C. 1991, 'A public management for all seasons?', Public Administration, vol. 69, no. 1, pp. 3-19.
 Peters, B. G. 1998, 'With a little help from our friends: Public-private partnerships as institutions and instruments‟, in J. Pierre
(ed.)﴿ Partnerships in Urban Governance: European and American Experience, pp. 11–33, Macmillan Press, Houndmills,
Basingstoke, Hampshire.
 PPIAF, 2014, Public-Private Partnerships reference guide Version 2.0. International Bank for Reconstruction and Development, The
World Bank, Asian Development Bank, and Inter-American Development Bank, https://ppiaf.org/ppp-resources
 Regan, M., Smith, J., and Love, PED. 2011, Impact of the Capital Market Collapse on Public-Private Partnership Infrastructure
Projects, Journal of Construction Engineering and Management, 137(1).
 Skitmore, M., & Marsden, D. (1988). Which procurement system? Towards a universal procurement selection technique.
Construction Management and Economics, 6(1), 71-89.
 Tiong, R. L. K. 1990, ‘BOT projects: Risks and securities’, Construction Management and Economics, vol. 8, no. 3, pp. 315–328.
58
Any question?
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Unit Chair, Lecturer & Tutor – Dr Nilupa Udawatta

Lecturer & Tutor - Dr Xin Hu

Tutor - Dr Dominic Doe Ahiaga-Dagbui

7 27 April Guest Lecture Guest Session 3 - Thursday, 30

10 18 May Alternative Dispute Resolution Methods Xin

Deakin University CRICOS Provider Code: 00113B

Technological evolution coupled with owners’ on-going demand

Integrated Project Delivery (IPD) is a project delivery approach

IPD leverages early contributions of knowledge and expertise

At the core of an integrated project is collaborative, integrated

In most traditional project delivery methods, participant success

IPD represents a change in the construction industry by requiring

Teams An integrated team entity composed key project

Communications/technology Digitally based, virtual; Building Information

Agreements Encourage, foster, promote and support multi-lateral

 Mutual respect and trust;

 Collaboration and efficiency improvement;

 Early investment required;

Deakin University CRICOS Provider Code: 00113B

Public infrastructure and the involvement of the private sector

 Government plays a crucial role in the provision of public infrastructure:

 Long-term relationships involving the private sector in the provision of

 A long-term contract between a private party and a government entity,

 Financial and fiscal constraints,

Main models of PPP

 Build-operate-transfer (BOT) - the private sector builds a facility,

Case in Australia: New Schools Public Private Partnership (PPP) Project

 In 2015, the state government of Victoria entered in to a Public Private

More information: https://www.dtf.vic.gov.au/sites/default/files/2018-01/Project-Summary_New-Schools-PPP-Project.pdf

$2.7 trillion in 2020

22 Infrastructure investment trend

For instance, in Europe (1990-2018):

 PPP refers to complex

PPP key features:

PPP key features:

 The private sector provider is responsible for construction, financing, operation,

PPP key features:

 Funders/lenders and investors influence the private sector service

 Payment for services: The essence of the PPP approach is that

1. Where there is a user-pays arrangement (e.g., in economic

2. Alternatively, the government provides the private party with the

Key phases in the delivery of PPP

Key phases in the delivery of PPP projects:

 Value for money:

 The quantitative assessment is assisted by the use of the Public Sector

 The qualitative assessment looks at all other factors including certainty of

 Source of funding from the private sector to meet the funding

 Complex structure and arrangement (huge administrative work,

Policies and guidelines for PPPs in Australia:

 CityLink is a 22-kilometre automated tollway

40 City Link project location

City Link project structure

42 Benefits of City Link

Deakin University CRICOS Provider Code: 00113B

Having learned a wide range of procurement systems, how

 Selecting a procurement option that is inappropriate for a

As the procurement selection is a decision-making process,

Decision-making is more than a

Standard Decision-making Process

Implications of the general decision-making process for the

 A framework that enables the organizations to move through

There is currently no established framework for doing this. However, the