| Summary: | The evaluation of a large infrastructure project is a critical activity for bidders and governments under traditional procurement or through Public Private Partnership. When a project requires huge capital investment, public-private partnership (PPP) is often sought as an alternative in cases of shortage of public funds. Nevertheless, the complexity of the PPP arrangement has constituted a dilemma for government authorities to balance the interests between the public and the private parties (stakeholders). High capital burdens in terms of PPP bidding cost, construction cost, and operation and maintenance cost are part of the major challenges for private sponsors to get involved in PPP projects. Meanwhile, PPP scheme projects, believed to deliver better value for money, have been criticised by many as the product of highest influence level from either political patronage or corporate political power. There is an apparent need for a tool to help the government agency evaluate the delivery of value for money on PPP projects while still sustaining the interests of private parties. The aim of this research is to assist government agencies in evaluating bids and making decision efficiently for PPP seaport development projects through the use of an integrated project evaluation tool (IPET). A computer (MS excel program) based tool was developed to evaluate the project financial viability and negotiate the risk sharing mechanism of PPP Seaport Project at five different project stages. The stakeholders’ expectations, financial indicators, financial risks, and mitigation measures are considered and developed into the following modules: (1) Financial viability module; (2) Financial risk analysis module; and (3) Financial risk mitigation module. A triangulation strategy was justified with caution due to the possibility of error. A qualitative method (i.e. literature review and interview to explore stakeholders’ expectation and preferred indicators of PPP financial models) was undertaken prior to performing a quantitative technique (i.e. questionnaire survey to narrow down the preliminary findings). Then, the proposed tool was validated by comparing the results with secondary data and interviewing experts regarding their opinion on its applicability. The findings from the statistical analysis indicate that an efficient negotiation is possible if: (1) PPP financial models were used at the pre-proposal stage to examine the project’s ability in generating enough cash flow; (2) All stakeholders know the most important expectations and the most preferred financial indicators of other stakeholders; and (3) IRR, NPV, Revenue, Operating Cost, and Principal Payback are not considered as the only financial indicators for evaluating PPP projects. By knowing the mutual agreement among stakeholders, any conflicting expectations can also be identified early and it may be possible to accommodate such expectations in the negotiation process. The IPET has been confirmed that it has several implications: (1) possibility to facilitate an efficient negotiation and effective evaluation process; (2) applicability in evaluating PPP seaport projects; and (3) potentially to be extended to other sectors. However, the IPET is designed to be used with financial model, hence it will require an actual PPP financial model.
|
|---|
