The challenge of monitoring PPP projects: Proposal of a conceptual 5-dimension KPI’s model

Abstract

Public-private partnerships (PPPs) have been used worldwide in infrastructure and public service provision as an alternative procurement model to traditional public work contracts. There are several benefits arising from the use of PPPs such as greater efficiency and value for money, but there is a pitfall that has significantly affected its performance: the lack of adequate monitoring by public authorities. This led to excessive renegotiations and problems of information asymmetry. Contract management remains as one of the main challenges in the PPP domain, if not the most relevant. This paper intends to minimize this gap, proposing a framework for key performance indicators (KPIs) categories that should be integrated in these contracts, enabling the grantor to effectively monitor the performance of the projects thus reducing information asymmetry problems. The KPIs category model proposed in this article congregates five groups of KPIs: operational indicators, financial indicators, relational indicators, environmental indicators and social indicators.