Biziorek, S; De Marco, A and Castelblanco, G (2023) Public-private partnership national programs through the portfolio perspective: A system dynamics model of the UK PFI/PF2 programs. In: Tutesigensi, A and Neilson, C J (eds.) Proceedings of 39th Annual ARCOM Conference, 4-6 September 2023, University of Leeds, Leeds, UK.
Abstract
Public-Private Partnerships (PPPs) have been adopted by numerous countries to alleviate fiscal pressures and transfer responsibilities to the private sector. However, the long-term sustainability of this procurement mechanism is uncertain due to social and economic limitations. This study aims to provide valuable insights for PPP decision-makers by analysing the long-term social and financial implications of one of the largest PPP programs globally - the PFI and PF2 programs in the UK, consisting of over 700 projects - from a portfolio perspective using System Dynamics. Our research identifies the key relationships driving the interaction between PPP development, societal concerns, and financial constraints. Causal-loop diagrams are developed to elucidate the causal structures within the system and estimate the long-term financial effects of PPPs on the government and society. The analysis revealed three relevant weaknesses that have led to the eventual closure of the PFI program in the UK, namely, high costs and long-term profitability of private investments in the long-term; the occurrence of recurrent cost and time overruns, and the lack of transparency that raised concerns about the program accountability. This research contributes to enhancing policies to enhance PPP programs.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | dynamic model; influencing factors; PPP program; private finance initiative; stakeholders |
| Index terms: | time overrun, society, causal structure, influencing factor, accountability, private sector, partnership, profitability, program, system dynamics, private finance initiative, transparency, private investment, interaction, estimate |
| Subjects: | structural engineering, software systems, professional development, partnership management, project controls, communities and social development, industry analysis, behavioral psychology, liability law, risk assessment, computing systems, contractual arrangements, financial and cost management, economic analysis |
| Topics: | Business Strategy, Cost Management, Information Management, Engineering Principles, Research Practice, Stakeholder Management, Risk Management, Procurement, Digital Applications, Legal Issues, Time Control |
| Descriptive scope: | 3 PCT |
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