Utilization of Dynamic Simulation for Design and Optimization of PPP/PFI projects

The Public Sector Comparator has a unique position in the process of public procurement of PPP/PFI projects (Public Private Partnerships/Private Finance Initiative). The Public Sector Comparator is an evaluation tool, which provides the public sector with complex information about the progress of total costs, incomes and risks during the life cycle of a PPP/PFI project. PSC is formed during the phase preceding competition of tenders. Its value serves as a measure for the public sector to compare against the bids offering investment solutions by means of PPP/PFI projects, and also to choose the most suitable project partner from the private sector. Present methods of calculation of the Public Sector Comparator are based on the formulation of an economic model of a PPP/PFI project with a simplification of the objective reality. This fact leads to problems linked to the interpretation of achieved results. Another difficulty of present methods is the rather static means of calculating the Public Sector Comparator. This situation offers the basis for a solution in an economic model of PPP/PFI project, and results in once-and-for-all decisions in a predetermined time frame. However, it is necessary to record the dynamics of a surveyed process. This paper presents a modified method for the calculation of the Public Sector Comparator which uses dynamic simulations during the initial assessment and pre-market stages of PPP/PFI project.