Project management and the private finance initiative

Figure 4.13: Critical success factors for PFI
Critical success factors
Well drafted output specification
Robust business case
Commitment of senior management in awarding authorities
Consultation with end-users
Alignment of public and private sector interests
Resources available to awarding authorities
Private sector project management skills
Quality of advice to awarding authorities
Public sector project management skills
Transparency of procurement process
Early involvement of financiers
Performance measurement and incentives
Respondents were asked about the factors for success in PFI projects.
Figure 4.13 shows the weighted score for each factor 19 . Two factors
were judged to be the most important. The first was a well-drafted
output specification. Some 23% of respondents ranked this as
their most important success factor and collectively over half
(57%) selected it as one of their three most important success
factors. A robust business case was also seen to be the most
important factor by 22% of respondents (43% selected it as one
of their three most important factors). Other factors that scored
well were the commitment of senior management in awarding
authorities (26% had this as one of their three important factors),
consultation with end-users (36%) and the alignment of public
and private sector interests (27%). Transparency of the
procurement process, early involvement by financiers,
performance measurement and competition all scored poorly.
The questionnaire went on to examine the skills required by
project management surveyors working in the PFI sector
(Figure 4.14). For 39% of PFI-active respondents a good
understanding of the client was considered to be the most
important skill requirement by a successful project manager.
An appreciation for the risks involved was also considered to
be important by a further 28% of PFI-active respondents.
Interestingly, technical knowledge was seen to be the most
important factor for only 7% of respondents.
Cost of capital
Competition
0 50 100 150 200 250 300 350 400 450
Weighted score
Figure 4.14: Most important skills for successful PFI project
management
Understanding the client
Risk appreciation
Process skills
Political skills
Technical knowledge
19 This was calculated by assigning three points to the factor ranked the most important by a respondent, two points for the second placed factor and
one point for the third placed factor. The remainder all received a score of zero. These scores were then totalled for all respondents to produce the weighted score.
25 chapter four Survey of RICS Project Management Faculty Members Project management and the private finance initiative
0 5 10 15 20 25 30 35 40 45
% of PFI active respondents
The importance of skills varied between different groups
(Figure 4.15). Risk appreciation is considered to be the most
important skill by 39% of those who have worked for a facilities
management provider and by 35% of those who have worked
for an investor. This is higher than amongst awarding authority
employees (27%), SPV employees (26%) and private practice
consultants (26%). For those employed by investors a very low
proportion (21%) consider a good understanding of the client to
be the most important skill. This compares to between 34% and
38% for all other groups. However, employees of investors did
rank political skills higher than other groups. Some 19% said this
was the most important skill compared, for example, to just 5%
of those employed by awarding authorities.