Risk Management and Governance for PFI Project ... - Title Page - MIT
Risk Management and Governance for PFI Project ... - Title Page - MIT
Risk Management and Governance for PFI Project ... - Title Page - MIT
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[Example of utilizing the lesson]<br />
■Yao Municipal Hospital: public <strong>and</strong> private sectors shared the dem<strong>and</strong> risk<br />
The Yao Municipal Hospital adopted a scheme that shared the variable dem<strong>and</strong> risk between the<br />
city <strong>and</strong> a private operator, whose service fee was composed of a "fixed payment" (fixed amount to<br />
be paid over the project period) <strong>and</strong> a “dem<strong>and</strong> fluctuation payment" (variable amount taking into<br />
account the number of actual dem<strong>and</strong>) (see Figure 11). This scheme allowed <strong>for</strong> a stabilization of<br />
the financial condition of the private sector because even if the number of patients decreased, the<br />
minimum fixed costs could be paid, which corresponded to the labor costs that were occurring at all<br />
times. Also, it created an incentive <strong>for</strong> the private operator to improve the operations due to the<br />
variable payment reflecting the dem<strong>and</strong> fluctuation.<br />
Figure 11: The Method of Variable Service Fee<br />
Source: Government of Japan, Cabinet Office. Guideline <strong>for</strong> the introduction of <strong>PFI</strong> project.<br />
http://www8.cao.go.jp/pfi/tebiki/jirei/jirei16_01.html<br />
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