11.1.4  Value for money

One of the key objectives of PPP project is to ensure that government gets value for money. This requires:

•  a competitive environment for PPP projects;

•  application of rigorous financial appraisal techniques including a proper appreciation of the consequences of risk;

•  optimal allocation of risk between the parties;

•  fair, realistic and comprehensive comparisons between publicly and privately financed options; and

•  consideration of qualitative factors which cannot be explicitly valued, but which may impact on government's cost of delivery of core services, for example:

the identity, credit standing and proven reputation of the bidder;

any differences in service delivery which cannot be quantified and adjusted for;

the likely sustainability of service delivery; and

design amenity, particularly for important major public buildings (e.g.  Spencer Street Station).

There may be additional benefits in selecting a PPP delivery option relating to the cost to government of delivering the project's core services.