The significance and co-dependency of 'robustness' in PFI projects: A granting authority perspective

The Private Finance Initiative or PFI since its introduction by the UK Government in 1992 has been widely used in the delivery of public service provision. Furthermore, PFI has been encompassed under a large umbrella of collaboration known as Public Private Partnerships (PPP). The acceptance of PFI as a mode of procurement has obtained mixed reviews to the extent that PFI as an option is mainly seen as being 'the only show in town'. Nevertheless the potential of PFI in achieving effectiveness and efficiency in the delivery of public services has been echoed continuously by the HM Treasury. On the other hand, academia has been divided in their opinion in showing support towards PFI.The Granting Authorities are the largest providers of public service provision and the largest consumer of the PFI procurement method. Recent analysis of the PFI indicates a decline in the number of deals signed in 2009 at 35 and valued at £4.2bn (compared to 2008 whereby 34 deals were signed and valued at £6.8bn). This achievement has been severely curtailed as it was estimated that 60 deals per year over the next decade was required. Certain parties have indicated that the 2009 financial crisis has been the main contributor. Subsequently the shift in policies pertaining to PFI with the recent 2010 general elections leading to a shift in political masters continues to raise concerns of the relevance of PFI as a procurement method. Therefore the volatile environment, within which PFI operates, drives this research in exploring the Robustness of PFI in the project environment from the perspective of the Granting Authority.The aim of the research is to determine the significance and co-dependency of robustness within a PFI project environment. This is explored from the perspective of the Granting Authority as the procurer of services using the PFI procurement model. In order to achieve the aim of the research, a constructivist-interpretivism philosophical stance is adopted. The study explores operational PFI projects within a real-life setting. Hence the philosophical perspective emphasises a great deal on the social impact brought about by the human factor that influences the decision making processes pertaining to PFI. The processes that are of focus are Value for Money, Risk Transfer Assessment and Affordability.A qualitative research strategy is used to execute the study. This is implemented using a case study framework whereby multiple embedded case studies are used. The case studies are used to capture the implementation of PFI projects by the different types of Granting Authorities in the UK mainly Local Councils and Government Agencies (NHS Trust). The significant contributions of the research are the concept of Quantifying Robustness; the Robustness Model; the documented Case Studies and the Critical Success Factors (CSFsJ for Robustness for a PFI project environment. The study concludes firstly, that robustness represents the permissible threshold within which a PFI project remains progressive subjected to endogenous and exogenous factors. Secondly robustness plays a significant role in ensuring the progressive nature of the project. Thirdly the relationship between Risk Transfer Assessment, Value for Money and Affordability are integrated and parameter hierarchical with resilience and robustness ensuring the relationship is constantly at equilibrium. Finally the CSFs for robustness identified through the study are certainty; mechanisms; relationships; resilience; reliability; project management and people. The key recommends of the study are firstly, that the approach of quantifying robustness be further enhanced using advance qualitative tools. Secondly the robustness model is further validated using similar qualitative tools. Thirdly that PFI projects by Central Government be included for comparison and that the CSFs for robustness includes the factors identified for this projects as well and finally, human resource capabilities and capacity building through training.Overall the research has provided an insight to the importa ce of robustness within PFI projects. By understanding its role and the dynamics that are involved, it is inferred that the performance of PFI will be enhanced. Furthermore the volatile construction market in the UK as well as globally will benefit largely from the robustness within PFI projects. Subsequently the stakeholders within the PFI market and the construction industry at large will be the largest beneficiaries.