Conducting Value-for-Money (VfM) and Public Sector Comparator (PSC) Tests for Public-Private Partnership (PPP) Projects

1. Introduction

Public-Private Partnerships (PPPs) are increasingly used as effective mechanisms to deliver infrastructure and public services. However, for governments to justify PPP procurement, it must be demonstrated that the PPP option provides better value compared to traditional public sector delivery. Two critical analytical tools—Value-for-Money (VfM) Assessment and the Public Sector Comparator (PSC)—support transparent, evidence-based decisions in PPP project preparation, appraisal, and procurement.

This training equips participants with the competencies to carry out rigorous VfM and PSC evaluations, applying global best practices, risk allocation principles, and financial modeling approaches to ensure government resources are optimized and contractual arrangements promote efficiency, innovation, and public benefit.

 

2. Objectives of the Training

The training aims to enable participants to:

• Understand the concepts, purpose, and importance of VfM and PSC in PPP decision-making.
• Develop skills to design, assess, and apply PSC as a benchmark for evaluating PPP options.
• Learn to identify, quantify, and allocate project risks within VfM frameworks.
• Perform quantitative and qualitative VfM assessments across the PPP lifecycle.
• Apply financial modeling techniques (discounting, risk valuation, lifecycle costing) for PPP analysis.
• Strengthen capacity to make informed procurement recommendations and justify PPP selection.
• Interpret VfM results and develop transparent appraisal documentation for approval authorities.

 

3. Targeted Group

This course is designed for:

• Officials from Ministries of Finance, Planning, Works, Transport, Energy, and Infrastructure
• PPP Units and regulatory authorities
• Project appraisal and feasibility study teams
• Economists, financial analysts, and infrastructure planners
• Procurement officers and contract managers
• Development partners, consultants, and auditors
• Legal and technical professionals involved in PPP preparation and evaluation

 

4. Course Duration

8-Day Intensive Training (40 Hours)
Alternative formats:

• 5-days executive programme
• 2-week extended professional certification

 

5. Training Methodology

The training uses highly interactive and practical approaches, including:

• Expert-led presentations
• Group exercises and scenario simulations
• Step-by-step PSC and VfM financial modelling
• Case studies from various sectors (transport, energy, water, ICT, social infrastructure)
• Risk assessment workshops
• Breakout sessions and guided discussions
• Hands-on use of templates, tools, and spreadsheets
• Pre- and post-training assessments

 

6. Course Content

Module 1: Introduction to PPPs and Value-for-Money Concepts

• Overview of PPP frameworks and procurement stages
• Concept and importance of Value-for-Money
• Fiscal responsibility and public interest protection
• International standards and guidelines

 

Module 2: Understanding the Public Sector Comparator (PSC)

• Definition, purpose, and structure of the PSC
• Components: base cost, risk adjustment, competitive neutrality
• Building the reference project
• Limitations of PSC and how to address them

 

Module 3: Risk Identification, Quantification, and Allocation in PPP Projects

• Types of risks: construction, operational, financial, demand, environmental
• Risk allocation principles
• Tools for risk valuation (probability and impact analysis)
• Transferable vs retained risks and how they impact PSC

 

Module 4: Constructing the PSC Model

• Developing lifecycle cost estimates (CAPEX, OPEX, maintenance)
• Incorporating risk adjustments
• Applying competitive neutrality principles
• Creating discounted cash flow (DCF) models
• Sensitivity and scenario analysis

 

Module 5: Conducting VfM Analysis for PPP Projects

• VfM methodologies: quantitative & qualitative
• Comparing PSC results with PPP bids
• Calculating Net Present Costs (NPC) and preferred bidder evaluation
• Key performance indicators for VfM

 

Module 6: VfM Assessment Across the PPP Lifecycle

• Ex-ante VfM assessment (project preparation stage)
• VfM at bid evaluation and contract award
• Ex-post VfM evaluation during implementation
• Contract monitoring and VfM assurance

 

Module 7: Practical Case Studies and Sector Applications

• VfM and PSC examples from transportation, energy, water, and social sectors
• Reviewing sample PPP feasibility studies
• Lessons learned from successful and failed PPPs
• International benchmarks (UK, Australia, South Africa, Canada)

 

Module 8: Hands-On Simulation and Presentation of Results

• Developing a simplified PSC from scratch
• Running a complete VfM test using sample datasets
• Group presentations on procurement recommendations
• Validation of results and peer review

 

7. Expected Outcomes

By the end of the training, participants will be able to:

• Understand and apply key concepts underlying VfM and PSC in PPPs.
• Construct accurate PSC models and interpret results for decision-making.
• Conduct robust quantitative and qualitative VfM assessments.
• Carry out risk identification, allocation, and valuation exercises.
• Compare PPP bids against PSC benchmarks and justify procurement choices.
• Document and communicate VfM findings effectively to stakeholders.
• Support transparent, accountable, and fiscally responsible PPP governance.

 

8. Certificate of Completion

Participants who complete the training requirements will receive:

Certificate of Completion in

“Conducting Value-for-Money (VfM) and Public Sector Comparator (PSC) Tests for Public-Private Partnership Projects”

Issued by: FOTADE Training, Research and Resource Development Centre

This certificate signifies professional competency in PPP appraisal, VfM evaluation, and PSC modelling.