EVALUATING PPP PROJECTS USING A LEAN FRAMEWORK

Abstract

A Public Private Partnership (PPP) describes an arrangement between the public and the private sectors for providing a public asset or service. PPPs are characterized by their long-term nature, complex contractual agreements, and distinct risk allocation formulas, all which distinguish them from traditional procurement routes. Performance evaluation is a prerequisite of performance improvement and is vital to the realization of project success, particularly in PPP projects. In fact, the absence of an effective performance evaluation framework in PPPs serves as a trigger for generating below optimum service quality. Although several performance evaluation frameworks exist, they prove more suitable for traditional projects, which highlights the need to account for the unique features of PPPs. This paper first introduces the various perspectives, from the literature, used to classify project success and evaluate performance. The paper then addresses the aforementioned need by introducing a new framework for evaluating project success, using the lean concepts of transformation, flow, and value. Key Performance Indicators (KPIs) are suggested as part of the framework to serve as performance measures on PPP projects. The introduced lean framework is the first of its kind and fills the gap in PPP research by being one of the few performance evaluation tools customized for PPPs.