Selasa, 02 Oktober 2012

Challenges in Implementing the Public Sector Comparator For Bid Evaluation of PPP Infrastructure Project Investment


The public private partnership (PPP) is indisputable and international experience has indicated that cooperation between the public and private sectors can be a powerful incentive to achieve value for money in infrastructure project development. However, the appropriate risk allocation between the public and private sectors is the key requirement for the achievement of value for money. Public Sector Comparator (PSC) is used for demonstrating potential value for money of the proposed PPP project. PSC enables a financial comparison including costs/gains and risks, and can be an alternative evaluation method which includes risk transfer aspect to facilitate risk negotiation properly. On the other hand, there are challenges in the development of PSC due to controversy regarding manipulation issue, reality of risk transfer in practice, and public sector ability to perform risk management methodology. An extensive literature review was conducted to elaborate some urgency of used PSC and its controversy in practice. It includes some lessons learned in the development of PSC such as the need for structuring risk management application, focusing on priority risk, improving the accuracy of risk-return analysis, realizing the allocation of risk, and enhancing risk management capability.

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