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Value for Money Integration in the Renegotiation of Public Private Partnership Road Projects by Ajibola Oladipo Fatokun

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Value for Money Integration in the Renegotiation of Public Private Partnership Road Projects by Ajibola Oladipo Fatokun Value for Money Integration in the Renegotiation of Public Private Partnership Road Projects By Ajibola Oladipo Fatokun A thesis submitted in partial fulfilment for the requirements for the degree of Doctor of Philosophy at the University of Central Lancashire October 2018 i STUDENT DECLARATION I declare that while registered as a candidate for the research degree, I have not been a registered candidate or enrolled student for another award of the University or other academic or professional institution I declare that no material contained in the thesis has been used in any other submission for an academic award and is solely my own work Signature of Candidate: ____________________________________________________ Type of Award: ________________________ PhD _______________________ School: ______________________ Engineering ____________________ ii ABSTRACT The governments of various countries have continued to adopt Public Private Partnership (PPP) for infrastructure projects delivery due to its many advantages over the traditional procurement method. However, concerns have been raised by stakeholders about the viability of PPP to deliver Value for Money (VfM), especially for the client. These discussions have generated debates and arguments in policy and advisory documents within the last decade mainly in the renegotiation of PPP water and transport projects and their VfM implications. Poor or non-achievement of VfM in PPP contracts renegotiation has led to this study in PPP road projects with the overall aim of integrating VfM considerations into the renegotiation process of PPP road projects. Mixed methodology research approach is used to achieve the objectives set for the study. Interviews and questionnaires of professionals involved in Design-Build-Finance-Operate (DBFO) road projects in the UK are used in the study. The qualitative and quantitative analysis of the data collected revealed that technical, contractual and additional works are the categories of factors leading to renegotiations and have an impact on the achievement of VfM. These findings show that renegotiation does not necessarily have to erode the VfM benefits of PPP road projects for the client and lead to user’s dissatisfaction regarding quality, fees, and charges. The research shows that the very critical factors leading to the renegotiation of road concessions are changes to works standards, specifications, the scope of works, and additional works. The findings also indicate that design and planning measures such as clear and concise contract documents, a definition of detailed criteria for VfM and performance indicators, and accurate estimation of contract requirements amongst others are critical measures to ensure the achievement of VfM at the renegotiation of PFI (DBFO) road projects. Also, VfM can further be achieved for the renegotiations that are predominantly motivated by technical and contractual factors. This study developed a VfM renegotiation framework for the UK PFI (DBFO) road projects. The five constituents of the VfM renegotiation framework are identification and establishment of measures and mechanisms, the factors leading to renegotiation and their level of criticalities, impacts of the renegotiation on VfM criteria, the identification of renegotiation outcomes and their natures and the application of remedial actions (if necessary). The concept of the framework is premised on the importance of defining and agreeing on appropriate measures and VfM contractual mechanisms by both public and private stakeholders at the contract inception to guide future renegotiation. An assessment of the factors, impacts, and outcomes of the renegotiation is necessary during the stages of implementation of the PPP road projects to develop an understanding of the implications of the renegotiation on VfM. iii The knowledge of the impacts of renegotiations during implementation will inform the responsible stakeholder's decision on the appropriate actions required to address any observed deviations from the project performance indicators or value for money criteria defined at the inception of the contract. The public and private partners can achieve their respective VfM objectives while also achieving user’s satisfaction through the adoption of the proposed VfM renegotiation framework. There is, however, a need for the public and private partners who will be the primary beneficiary of the framework to be proactively involved in the use of the framework from contract inception to handing over of the project residual value to the client. The formulation of measures for renegotiation at the outset of the contract as indicated in the framework is essential to achieving VfM at renegotiation. Also, the client should ensure that flexibility is built into the agreement regarding the contract mechanisms for payment from the beginning, to allow either party to introduce proposals that can enhance the achievement of VfM at renegotiation or change negotiation. iv ACKNOWLEDGEMENTS I acknowledge and thank the God of all glory, the giver of all wisdom, knowledge and understanding. My great philosopher, helper, protector and provider throughout my academic pursuits to this blessed day. I appreciate and awesomely thank my Director of Studies, Prof. Akintola Akintoye who started the supervisory responsibilities and saw it through to substantial completion before leaving UCLan. Your initiative as the Head of School of Built and Natural Environment brought other colleagues and me at Yaba College of Technology to UCLan. You are indeed a star, a leader par excellence and an astute scholar. Please accept my thanks for your devotion and commitments. I am also grateful to Dr Champika Liyanage for working diligently and offering to complete the lead supervisory role. Your painstaking and thorough efforts have contributed to the quality of this thesis. I also thank Dr Godfaurd John for reading the thesis and making valuable comments. I am, indeed, very grateful to the Tertiary Education Trust Fund of the Federal Ministry of Education, the Federal Republic of Nigeria. All the staff at TET-Fund office Abuja deserve commendation and appreciation. Your timely intervention rescued the research project from failure. I also thank the management of Yaba College of Technology for the grant of study leave with pay (without sponsorship). I also thank all the interviews respondents for the time given. Many thanks to the management of UCLan for the grant of tuition fee discount in 2012. I am also grateful to the Dean and tutors at every stage of progression: Prof. Rob Wallace, Prof. Ian Sherrington, Dr Chris Lowe, Dr Andrew Smith, Dr Stanley Njuangang and Dr Renuka Thakore. Big thanks to my parents Pa Kolawole and Ma Christiana Fatokun, my grandmother Florence Olalemi for your efforts and sacrifices during my early career. Your prayers and moral support have contributed to the success recorded to date. I thank God for sparing your lives to reap the fruits of your labour and to witness this day. I also thank my siblings and extended family. I thank my friends and colleagues, Arc. Akintayo Adeoti, Dr Ayo Fapohunda, Dr Ezekiel Mofoluwaso Awe, Mr Oludare Balogun, Mr Uduak Inyang-Udoh, Mr Fasasi Aderibigbe, Mr Odunnukan O.E., Mr Atere Oladapo, Mr. Adewale Ogunsanwo, Mrs Olubanke Olusanya-Sole, Mr Segun Salisu, Mr Wale Sajowa, Mr Ajilore and others. You are all wonderful. Last but not the least, I thank and appreciate my lovely wife, Oluwaseyi Fatokun, for her love, understanding, trust and constant words of encouragement. You came into my life during the programme to complete my joy. You are a star and jewel of inestimable value. I love you. v TABLE OF CONTENTS STUDENT DECLARATION ....................................................................................................... ii ABSTRACT ................................................................................................................................. iii ACKNOWLEDGEMENTS ........................................................................................................... v TABLE OF CONTENTS .............................................................................................................. vi LIST OF FIGURES ....................................................................................................................... x LIST OF TABLES ........................................................................................................................ xi LIST OF ABREVIATIONS ...................................................................................................... xiii CHAPTER 1 INTRODUCTION ................................................................................................... 1 Background of the Research ......................................................................................... 1 Statement of the Problem .............................................................................................. 3 Research Questions ....................................................................................................... 5 Research Aim and Objectives ....................................................................................... 5 Research Programme Flow ........................................................................................... 6 Scope of the Research ................................................................................................... 7 Contribution to Knowledge and Originality ................................................................
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