The anticipated robustness factors in a PFI project environment from the granting authority s perspective

The Private Finance Initiative (PFI) has been a procurement innovation in the UK by which the responsibilities of the public sector to deliver public services are carried out by the private sector. This mode of procurement has been aggressively pursued in the late 90s by the UK Government in the offset of efficiency, effectiveness and economic characteristics embedded through the financial, management, commercial and technological knowhow of the private sector. Nevertheless in the last decade there has been a reduction in PFI projects mainly due to economic and financial constraints. Subsequently the political scenario within the UK has experienced change in leadership within Government that affects policy and regulatory matters. Therefore it is evident that PFIs are exposed to both external and internal shocks that bring about uncertainties mainly during the operational phase. Hence the robustness of PFI projects to withstand uncertainties is of great concern. Interviews comprising of private, public and academia experts were conducted to determine what and how the endogenous and exogenous factors interact. The endogenous factors that provide the environment for optimum performance are found to be dynamic in nature and changes would have a significant impact on the project. Furthermore the ability of PFIs to adapt to changes caused by the exogenous factors builds on the robustness of the initiative. Managing the change through flexible mechanisms is found to be closely associated with robustness. Understanding the dynamic relationships of the endogenous and exogenous factors holds the key to creating a sustainable procurement model. A robustness framework for PFI projects is proposed using the exogenous and endogenous factors and their interactions.