Preface Acknowledgements PART I - PFI/PPP and VFM rationale 1. The rationale behind the private financing of public projects Introduction What is PFI/PPP? The rise of PFI/PPP in the UK construction economy Economical rationale for PFI The benefits of public-private partnerships Future PFI/PPP directions PFI/PPP as a driver for whole life cycle costing The challenge of cost planning PFI/PPP projects 2. Whole life cycle value exchange Introduction Value overview WLC value exchange Stakeholders' perspectives on value exchange Convergence of stakeholders' value Further development 3. Whole life cycle value creation Introduction Defining whole life cycle value creation Maximising WLC value PART II - Procuring building assets under the PFI/PPP model 4. Procuring projects under the PFI/PPP system Introduction Procurement options The PFI/PPP procurement process Contract structure Contract governance 5. Financing PFI/PPP projects Introduction PFI/PP capital project enviroment Organisational structure of project finance Sources of project finance Financing strategies Payment mechanisms in PFI/PPP projects PART III - The process of cost planning of PFI/PPP projects 6. Fundamentals of PFI/PPP projects cost planning Introduction Time value of money concepts Capital budgeting principles Measuring the risk in time value of money decisions Economic evaluation of projects Using cost indices in PFI/PPP projects Project cash flow 7. The process of cost planning in PFI/PPP projects Introduction The costing process Collecting the relevant cost information Defining and developing cost assumptions Contingency planning Managing the costing process 8. Financial, economic and commercial appraisal at the pre-ITN stage Introduction Costing the PFI/PPP brief Establishing the economic feasibility of PFI/PPP projects Evaluating alternative solutions Quantifying risks and benefits Measures for selecting the best PFI/PPP deal PART IV - Cost variations in PFI/PPP projects 9. Cost planning at the pre-financial close stage Introduction The PFI/PPP cost planning process Estimating operating cost budget Estimating repairs and maintenance cost budget 10. Cost variation control at pre-financial close and construction stages Introduction Setting control benchmarks e mechanisms Control mechanisms Construction inspection Schedule control Quality control Controlling costs Commissioning Dealing with cost scope, service and cost variations The variation process 11. Monitoring and responding to cost variations at the operation stage Introduction Setting cost control benchmarks for operation and maintenance Project performance Condition surveys for maintenance Controlling maintenance and repair cost Controlling operational costs PART V - Risk in costing PFI/PPP projects 12. Risk in cost planning of PFI/PPP projects Introduction The life cycle of risk management in PFI/PPP projects Methods for risk assessment Uncertainty in costing PFI/PPP projects Impact of risk on PFI/PPP project costs Risk of capital cost variation Dealing with operational cost risk Dealing with repair and maintenance cost risk Pricing the risk 13. Cost risk allocation in PFI/PPP projects Introduction Principles of risk allocation The process of risk allocation Risk classification Allocation of design and construction risks Allocation of commissioning and operational risks Allocation of project finance risk Allocation of availability and performance risks Allocation of variability of revenue risk Allocation of residual value risks Allocation of termination risks Allocation of tecnology/obsolescence risks Limitation of liability Dispute resolution mechanisms Bibliography Index