quality threshold requested of the private sector providers through a PPP, such as higher service levels or more modernized facilities. Although the development of the PSC and SBM are significant components of the quantitative VfM assessment, the results of these tools are usually considered in conjunction with additional qualitative considerations, such as the competitiveness in the market and the private sector's appetite for risk transfer. Together, the quantitative and qualitative assessments typically inform the overall VfM analysis and decision-making process Strengths and Weaknesses of Value for Money Approach When developing P3 and VfM framework policies, it is important to consider the advantages and disadvantages VfM brings to the process of taking projects from planning through to commercial/financial close. Some strengths and weaknesses of VfM that should be considered are detailed below: Strengths Can provide objective analysis, if performed systematically. Provide the public sector sponsor a better understanding of the costs and risks of a project. Enhance public support for P3, if the analysis is released publicly, which fosters transparency and explains the value of the procurement approach. Weaknesses Based on the complexity of the analysis and assumptions, the analysis can be perceived as suspect. (Fear the analysis was “gamed” or showing a bias.) Ensuring all aspects of the project are properly evaluated is a challenge. The analysis is not immune to the appearance or actual influence of politics. Capacity to Improve Public-Private Partnership Policy A rigorous VfM analysis process has the capacity to significantly improve a government’s ability to assess whether a P3 actually benefits the public. When correctly applied, a VfM analysis can improve understanding of the overall project costs, add transparency to P3 procurement, reduce the risk of using P3s solely as a “fallback” through which to make unwise or unaffordable procurements, and improve the actual benefit received per dollar of taxpayer money spent on transportation infrastructure. Especially with respect to projects where delivery relies naturally on public funding (such as social sector projects), applying VfM criteria makes sense from a taxpayer perspective. In this context, P3s are seen as a procurement option where VfM, i.e. delivery of services at lower costs or higher quality, should be the overriding basis upon which to apply or not to apply private finance and management in the delivery of public assets and services. On the other hand, short-term fiscal limitations can give political decision makers a strong incentive to develop P3 projects for financing reasons. There have been many examples of poorly structured P3 and privately financed projects that were used to circumvent fiscal limitations while assuming high fiscal Value for Money State of the Practice 4 The Framework specifically focuses on life-cycle costing, full consideration of project risks and optimal risk allocation between the public sector authority and private sector party. The Framework requires a clear approach to VfM assessment. The public interest is protected by both a formal qualitative public interest test (PIT) and the retention of core public services with the public sector. The PIT is conducted before proceeding to the market and is updated frequently at three points: prior to the call (request) for bids, after finalizing the evaluation of bids, and prior to signing contract documents. The PIT is performed to assess whether the delivery of the P3 project is in the public interest and entails an assessment of the impact of the project on eight public interest elements6: Elements Effectiveness Accountability and transparency Considerations Is the project effective in meeting government objectives? Do the partnership arrangements ensure that the community can be wellinformed about the obligations of government and the private sector partner, and that there will be sufficient auditing oversight? Affected individuals and communities Have all stakeholders been able to contribute effectively at the planning stages, and affected parties’ rights protected through fair appeals processes and other conflict resolution mechanisms? Equity Are there adequate arrangements to ensure that disadvantaged groups can effectively use the infrastructure or access the related service? Consumer Rights Does the project provide sufficient safeguards for consumers, particularly those for whom government has a high level of duty of care, and/or those who are most vulnerable? Public Access Are there safeguards that ensure ongoing public access to essential infrastructure? Security Does the project provide assurance that community health and safety will be secured? Privacy Does the project provide adequate protection of users’ rights to privacy? Queensland The State of Queensland's VfM framework provides a comprehensive set of procedures to evaluate a range of project delivery options and identifies the best VfM outcome for the government and the community. The Queensland framework applies to all infrastructure projects that have been identified under the “Project Assurance Framework” as a potential P3 where the expected life-cycle project cost will exceed 6 Partnerships Victoria Requirements Annexure 7 (2010), available at: http://www.partnerships.vic.gov.au/CA25708500035EB6/0/A987456B94096C71CA25755C0015F1C6?OpenDocum ent Value for Money State of the Practice 12