Comparative performance of healthcare and transport PFI projects: Empirical study on the influence of key factors

Private Finance Initiative (PFI) has been used on many projects in the UK in the delivery of public services. Cost, time and risk performance in public projects was anticipated to be improved by the superior skills of the private sector. So far, there are limited empirical studies on the life cycle performance of PFI projects, especially performance comparison between different sectors. This study investigated and compared variations in costs, time, and client requirements tracking it through the strategic business case stage to the operational phase in healthcare and transport sectors. It explored the influence of sector-specific factors, project size and maturity of the PFI on these variations. It used documentary analysis of full business cases of five PFI projects and a questionnaire survey of 44 PFI projects in the UK. The findings reveal that there are still considerable cost and time overruns and requirement changes in PFI projects in both sectors over the development of the project and its early use. The health sector was better than the transport sector for time overruns but was worse on costs. Smaller-value projects outperformed larger projects on cost variations but underperformed on time.

► The study compared performance by project size, sector specifics and PFI maturity.
► The health sector was better than the transport sector on time but worse on cost.
► The relationship between variations and project size or sector specifics is trivial.
► But PFI maturity has a significant impact on performance.
► The findings cast light on the fundamentals of the PPP procurement dynamics.