Risk and Value in Privately Financed Health Care Projects
Publication: Journal of Construction Engineering and Management
Volume 139, Issue 8
Abstract
An empirical study is presented to investigate the risk factors affecting the value for money that can be obtained from using the public-private partnership delivery system to develop social facility projects. Based on a model describing the main risks affecting a project, a linear regression analysis is conducted on a data set of privately financed health care projects in the United Kingdom to explore the main factors that might have significant relationships with the annual unitary charge payment. The results reveal that the economic and political environment, the hospital capacity, the construction duration, and the concession period are significant factors of the price paid by the granting authority. The study confirms that the unitary charge is not only affected by investment, operations, and financial life-cycle costs, but also by risk factors and the level of risk allocated to the private sponsors. The proposed methodology might help both public and private parties in improving a private finance initiative project’s compensation design, in order to achieve a higher value in privately financed infrastructures. The given model might also support the process of better determining the amount of annual payment based on select drivers and appropriately transferred risk factors.
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Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 139 • Issue 8 • August 2013
Pages: 918 - 926
Copyright
© 2013 American Society of Civil Engineers.
History
Received: Jun 12, 2012
Accepted: Nov 28, 2012
Published online: Dec 1, 2012
Discussion open until: May 1, 2013
Published in print: Aug 1, 2013
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