Output specifications for PPP projects

What is it about?

For PPP projects, a good set of output specifications is conducive to the achievement of value for money, innovation, risk transfer, whole life asset performance through a clear abatement regime and an effective linkage of performance criteria to the payment mechanism. For existing specifications, it was found that too many and complex KPIs were specified, which were difficult to monitor, measure and implement by the client. Very prescriptive specifications hindered innovations and did not allow appropriate risk allocation. Further, the research study suggests that after the global financial crises, the private sector had less appetite to take the patronage risks in road and rail PPP projects. To mitigate these pitfalls, it is imperative that output specifications need to be aligned with the type of PPP projects they represent; in particular foreseeable changes should be addressed by some pre‐agreed framework to facilitate negotiation.

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