Benefits of PPP

The benefits of project implementation through the PFI approach:

1. Alleviate the Government's burden to provide high capital cost to implement development projects and allows long-term optimisation of public finances based on cash flow performance.
2. Deliver public services which focus on continuous maintenance of public asset, optimal risk distribution, minimal Government subsidies and essential projects.
3. Selection of reputable company with good finances and expertise to ensure minimal risk to the Government.
4. The Government determines the desired output specifications while the private sector imports innovation/efficiency into the construction of the public asset/facility that can be utilised optimally by the Government/public.
5. Effective risk distribution in project implementation whereby the company must ensure the successul execution of each phase (design, construct, operation & maintenance) as it is related to service delivery performance.
6. Variation of order/variation of price is not allowed.
7. Private sector is allowed to choose refinancing option during the operational phase, subject to Government approval. In turn, the Government and the company shall share the revenue generated from refinancing gain. In PFI projects, this revenue shall be utilised to reduce availability payments to the concession company or others, subject to the Government’s policy decision.