Efficiency analysis of Public Private Partnership

Public Private Partnership (PPP) projects offer realisation and life cycle services for real estate by a fixed charge. For the awarding of PPP contracts the most efficient bid has to be recognized to ensure an efficient application of tax money corresponding to public procurement rules. Efficiency of a PPP bid is not obviously because of the output oriented tender, real estate specific characteristics and long contract periods of the partnerships. The efficiency of a PPP project is expressed by the cost-benefit-ratio. For a calculation of the cost-benefit-ratio of PPP projects a systematic analysis method will be presented. The newly developed method supports public clients (and private companies) by determination of the parameters cost and benefit. In a transparent way the most efficient PPP bid can be identified with this method. The analysis method is based on four levels. On the first level criteria for evaluation of bids are determined, based on user requirements. These criteria are worked out and weighted with help of quality function deployment (QFD) method of Prof. Akao. It ensures that user and client requirements are the important facts for the evaluation of benefit by a PPP project. The weighted criteria become part of the tender documents to support bidding companies by showing the important issues for the user and client and to reach best quality of real estate and related services in sense of the client. After submission of private companyís bids, the method which is presented supports on its second level the identification and objective evaluation of the benefits of a certain bid for the planned PPP project. Therefore evaluation schemes of single quality aspects in three categories building, operation and management are worked out in a catalogue. The objective benefit assessment generates a quality competition for the best real estate and services for the public client. The third level enables the user of the method to analyse the costs of a PPP bid. This cost analysis is based on a further development of German calculation standard for PPP total cost calculation. On the fourth level of the newly developed analysis method the most efficient PPP bid is going to be named due to the best benefit-cost-ratio. Due to the identification of the most efficient bid follows legal security for awarding the contract. Competition for best quality and cost transparency through the new method lead to best value for tax money.