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Authors
Abstract(s)
In this dissertation the concept of flexibility as it applies to Public Private Partnership (PPP),
aiming at describing the costs and benefits of introducing flexibility is reviewed. Fundamental
advantages and disadvantages of task bundling, risk allocation and project valuation of an
ordinary project approach are compared with financial, legal and physical flexibility by
highlighting the level of complexity and resulting cost effects. Moreover, certain theoretical
observations are matched with results form expert interviews in order to predict the practical
viability of flexibility in PPP. For this purpose literature focusing on the concepts that help to
explain the main terms of PPP is reviewed. Particularly, agency problems under the
consideration of incomplete contracting, the value for money (VFM) and the difficulty of
long-term project maturities or rather risk estimation are examined. In addition, it will be
analysed how and to what extent flexibility is used by interviewing responsibles from the
respective national PPP units in Germany, Portugal and the UK. In conclusion, it is evident
that flexibility is currently not being used in an extensive form in PPP projects. Suchlike
forms of flexibility would be able to reduce the renegotiations and its resulting costs.
However, they would increase certain project’s complexity. It is not possible to completely
avoid project revisions. Instead the focus has to be on a processes improvement of certain
unavoidable renegotiations.