Value for Money (in the PPP context)

The benefits relative to the costs of procuring a project using a PPP compared to other procurement options. Commonly referred by its abbreviation Value for Money (VfM). In a PPP context, Value for Money can be tested at two different points in the project cycle:
·         during appraisal and structuring, a VfM test can determine whether the PPP alternative is a supportable procurement mechanism that is likely to provide best value to the public authority or better than the traditional procurement mechanism
9062,Value testing,,An exercise whose objective is to test the costs of the soft services being provided within the PPP contract against their market price at a certain point of time. This is to adjust the amount of the service payments to reflect the market price.
The most common methods for value testing are benchmarking and market testing.
9063,Viability Gap Funding (VGF),,A scheme wherein the projects with low financial viability are given grants (or other financial support from the government) up to a stipulated percentage of the project cost


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