Background
The concept of value for money in public-private partnerships has gained massive attention all over the world in an effort to ensure that there is efficiency and effectiveness when conducting government projects. According to Valverde and Moore (2018), cases where government partners with private institutions to undertake a given project has become common. In the United Arab Emirates, the government has been involved in major construction projects to help in the diversification of the economy. Most of these projects require specialized skills, some of which often require the government to partner with foreign companies.
In such cases, it is often cost effective for the government to work closely with private entities that have specialized in that given field. As Hurk (2017) observes, whenever there is a public-private partnership, it is often advisable to ensure that there is value for money. The investment from the exchequer should yield the desired returns within a specified period. The contemporary debate on this issue has been whether the government gets value for money in public-private partnership projects.
Statement of Purpose
At the heart of the proposed research is the problem of the inability of local government entities in the United Arab Emirates to precisely determine the value for money in public-private partnership projects. There is the fear that these public institutions continue to invest in these PPP projects, some of which do not bring equal value to the investment made (Organisation for Economic Co-operation and Development, 2007). As such, the objective of this research is to conduct a study that explains how to determine the value for money in public-private partnership projects in the United Arab Emirates.
The boundary of the chosen problem lies with public projects conducted by private entities but paid for by the government. Commercial projects conducted by private entities for private institutions are outside the boundary of this investigation. In an effort to ensure that government gets the best value out of its public-private partnership projects, I moved from merely having an interest in the issue to understanding the research problem discussed above, and finally developing the research question below. Of interest to me is the need to develop a research question that would make it possible to collect relevant data from various sources. Based on the current knowledge, I developed the following research question:
How can government entities in the United Arab Emirates determine the value for money in every public-private partnership projects?
Literature Review
Public-private partnership projects have become increasingly common in various parts of the world as governments try to maintain lean workforces and spur economic growth. The strategy helps in increasing governments’ expenses in the economy. In so doing, it is often important to ensure that there is value for money in these investments (Hu & Han, 2018). It is necessary to review what other scholars have found out in this field.
Understanding the Concept of Value for Money in PPP Projects
Public-private partnership, according to Hurk (2017), is one that involves collaboration between a government entity and a private-sector firm that is meant to finance, build, and operate major public projects. Instead of using its own departments to undertake a given project, the government would identify a private firm that has a better capacity of undertaking the task and assign the project to it. The role of the government will be to specify goals to be realized, finance the project, and supervise it to its completion. In these projects, Valverde and Moore (2018) observe that there is an increasing pressure to ensure that there is value for the money that the government injects.
The concept of value for money refers to a situation where public-private partnership projects compares favorably to the traditional public sector models in terms of the quality offered and the overall cost of the infrastructure (Hu & Han, 2018). In essence, this concept focuses on determining whether infrastructural and non-infrastructural projects implemented through public-private partnerships offer a greater value to the government than if they are implemented through traditional processes (Federal Highway Administration, 2012). In an effort to cut costs of operation, a government will always go for an alternative that offer the best value in terms of quality and cost. It is expected that public-private partnerships should offer better value to the government.
How to Realize Value for Money in PPP Projects
The government can only realize value for money if specific conditions are met in these public private partnership projects. One of the conditions is that the private partners should be allowed to be innovative as a way of improving their service delivery (Hu & Han, 2018). Although it is often desirable for these projects to follow a given conventional path, promoting innovation helps in lowering the cost while at the same time improving the quality of services delivered. Another major condition is that risks should be allocated to both the private and public partners (Valverde & Moore, 2018).
There is always a tendency where risks such as an increase in cost only affect the government. When signing the contract, there should be an agreement that in case of these risks, both partners will share the cost in a justifiable manner. Hurk (2017) also recommends that private partners should be selected through competitive processes. Instead of favoring specific firms, the government should ensure that firms that get the tender have the best capacity to deliver on their promise at the lowest cost possible. Another major condition is that the performance of the private partner should be monitored carefully and penalty clauses properly enforced (Hu & Han, 2018). It will be a reminder to the private partners that when they get into contracts with the government, they have an obligation to deliver on their promise.
Research Gap
When I was conducting the preliminary review of literature, the main gap is the lack of instruments that the local government can use to assess the value of money in the local PPP projects. As Brogaard (2019) observes, most government entities still lack the capacity to determine the exact value of completed projects vis-Ă -vis the amount of money spent in it. I also noticed that there is a limited amount of information regarding value for money in public-private partnerships in the United Arab Emirates. Most of these sources were based on the economies of North American and European economies. Problems facing organizations in the UAE require detailed research conducted within the country (Department of Finance, 2019). The study will find ways in which these gaps will be addressed using a qualitative research methodology
Methodology
The previous chapter has provided a preliminary review of literature. In this section, it is important to discuss the proposed methodology that will guide the process of collecting relevant data from the participants. As Rehman and Alharthi (2016) observe, the methodology should provide a step-by-step explanation of what a researcher intends to do to achieve the set objectives and to respond effectively to the research questions.
The Research Paradigm
In this study, I intend to a combination of ontology and epistemology to have a comprehensive understanding of the issue under investigation. Ontology will help in determining if there is value for money in public-private partnership projects done within the country. On the other hand, epistemology will help in understanding how the government and other relevant stakeholders will know that the value for money exists in such projects. The approach will help me to broaden the scope of the investigation and to understand the relevance of the concept being developed in the study. The goal is to have an objective analysis of the issue and to develop policy recommendations that can help the government to maximize on its investments in these projects.
Sampling and Sample Size
Primary data needed for this study should come from individuals who are currently working in local government entities and have been involved in public-private partnership projects. Relevant information can also be obtained from business executives of firms that have partnered with the government to undertake specific projects. Give the fact that this study has to be completed within a specific period it will be necessary to select a small reasonable size.
The selected individuals should be easily accessible and capable of providing informed knowledge about the issue of interest. Judgmental sampling will be used to identify participants in the study. This non-probability approach of selecting participants requires one to be objective in selecting specific individuals instead of using random methods (Rehman & Alharthi, 2016). It saves time and ensures that the chosen individuals meet specific inclusion criteria. Using judgmental method, I will select 20 participants to take part in the collection of primary data.
Data Collection Process
Once the participants have been identified, the next step is to collect data from them. I will make a formal request to the management of the selected institution (Road & Transport Authority in Dubai) to allow their employees to take part in the investigation. Once the permission is granted, I will contact the selected participants by phone and explain to them the reason why they were chosen to take part in the study. I will then select specific dates, based on the schedule of each participant, for a meeting with the respondents. I intend to conduct a face-to-face interview with the respondents.
According to Kivunja and Kuyini (2017), this method of collecting data is the most effective in terms of getting reliable data within a specific period. It eliminates cases where respondents fail to fill forms within the right time. It is also possible to easily know when a specific respondent will fail to be part of the data collection process. Such a participant can be replaced immediately with another one that meets the inclusion criteria. Makombe (2017) warns that face-to-face interviews are time consuming, and as such, only 20 participants were selected. The interviews will involve the use of open-ended questions to enable participants to provide a detailed explanation to each question.
Data Analysis
The study will focus on a case study of Road & Transport Authority in Dubai. I will identify specific cases relating to public-private partnership projects. Once data has been collected from the selected sample of respondents, the next stage is to conduct an analysis (Kivunja & Kuyini, 2017). I chose qualitative research methods as the most appropriate design to conduct the investigation. To understand the value for money in public-private partnership projects, it will be necessary for me to allow respondents to provide a detailed explanation of their understanding of the issue based on their experiences.
Instead of using structured questions, it will be advisable to allow respondents to answer the questions in their own words. The design was selected in line with the research paradigm chosen above. It will not only facilitate answering the question of why understanding the value for money in public-private partnership projects is important but also how government agencies can determine this value.
Methods
This study seeks to investigate the value for money in public-private partnerships. The characteristics of the research question and objectives above show that they require an explanatory answer instead of statistical analysis. The study seeks to determine how this value is determined and whether government entities understand the concept. These characteristics of the study mean that one cannot conduct a statistical analysis. Instead, one is required to conduct a qualitative study that will provide a detailed explanation of the how and why of the phenomenon.
The qualitative research will make it possible to explain how government entities currently determine the value for money on these projects, why they use the approaches identified, weaknesses and strengths of these approaches, and what can be done to ensure that the weaknesses are addressed through the proposed strategies. The proposed qualitative method will enable participants to provide a detailed explanation on specific issues of interest in this study.
Validity and Reliability
The concept of value for money in public-private partnership projects is gaining momentum all over the world. In the United Arab Emirates, the government is taking a new approach undertaking major projects. Instead of conducting some of these projects internally, the government is currently considering the need to outsource as a way of keeping a lean workforce, lowering the cost of the projects, improving on the quality, and boosting business in the local economy. This study is critical because it helps in explaining how these projects can be done in cost effective ways that guarantee the government value for money invested. The report can be relied upon by government institutions when making important decisions when awarding tenders. As such, it is important to ensure that the validity and reliability of the study is not questionable.
I will ensure that there is validity of the data by using triangulation. Instead of collecting data from one specific source, I intend to collect data from different sources. The strategy is meant to ensure that when one source is biased in any given way when addressing an issue, other sources will help to identify and to address it. Makombe (2017) argues that triangulation helps in ensuring that the information collected focuses on various angles of the issue under investigation. A comprehensive review of literature and a detailed analysis of primary data collected from the participants will help in providing trustworthy information. I will ensure that personal bias does not influence the entire process of collecting, analyzing, and presenting data. I will remain objective in the entire process of conducting this study.
I will ensure that tools used in collecting and analyzing data are reliable. In this qualitative study, I will ensure that all the tools used are capable of yielding reliable results. A questionnaire will be developed to make sure that the process of collecting primary data is standardized. It means that all participants will be asked same questions and offered a similar pattern of providing answers. The process makes it easy for me to conduct analysis of the findings.
Analysis and Results
At this stage of the research project, I am yet to collect primary data that will be analyzed to help in answering the research question. However, the preliminary review of the literature conducted above helps in shedding light about what to expect when conducting the analysis of primary data. Makombe (2017) explains that literature review may not be a guarantee of what will be found through primary data analysis, but it helps in pointing at the right direction based on the findings made by other scholars. As such, the preliminary investigation of the existing bodies of knowledge can help in determining what to expect from this research.
One of the main expected results in this study is that the local government agencies rarely focus on the issue of value for money when engaging in public-private partnerships. It may be true that such projects are often taken through competitive tendering processes to ensure that the government selects a private entity that has the capacity to conduct them at the least cost possible and within the expected standards. However, the value for money rarely goes beyond the tendering process (Valverde & Moore, 2018).
Once a contractor is selected, the goal shifts immediately to monitoring whether the project will be completed within the stipulated time and at the predetermined cost. The government rarely takes a further step to investigate why the firm that won the bid made specific quotation and whether their stated cost of the project accurately reflects what will be done. The problem with such a situation is that the government may end up paying more for a project that would have cost less if it was done by the government agency. The fact that a given firm won the tender does not guarantee that the cost they stipulated is the most competitive in the market. It may be possible that all of them overpriced the project, but the one that was given the tender had better incentives for the government (Wang, Chen, & Wu, 2019).
In such a case where the government is forced to pay more for the project, the value for money will be lost. Kozin, Pyrchenkova, & Radchenko (2019) also explain that cases have been witnessed where a contractor makes an upward adjustment of the cost of the project when it is already in progress. In such cases, the promised value for the project will be lost even if the adjustment is justifiable. The government is often forced to pay the inflated cost just to ensure that the project does not stall once it is started.
I expect to find cases where there are collusions between unscrupulous government officials and greedy business person during the tendering process. According to O’Shea, Palcic and Reeves (2020), sometimes it is common to find incidences where the tendering process fails to follow the clearly set guidelines of selecting the firm with the best capacity to undertake a given project but charges the lowest price. Corruption is one of the main issues that often compromise the value for money in money in public-private partnerships. Corrupt government officials would deliberately allow for the inflation of the cost of the project to ensure that they get a share from the project.
They would allow the private entities getting the tender to adjust the cost to ensure that they can steal from the government but in an indirect way that may not result into prosecution. The firm awarded the tender would be expected to pay specific government officials involved in the fraud an agreed upon sum of money before, during, and after completing the project.
The expected findings will have a significant contribution to both the academic as well as the practical business world. To the academicians, this report will provide a rich source of information based on local data. During the review of literature, the main knowledge gap identified was limited literature that focuses on the issue of interest based on local data. Most of the publications were based on western economies. This study will help in bridging the gap by providing information based on data collected from local sources. The study will provide a basis upon which local scholars can further their studies on related fields.
The findings will also be of great significance to the practical business world. According to Willems, Verhoest, Voets, Coppens, Dooren, and Hurk (2017), the government in the United Arab Emirates has been spending billions of dollars on mega projects meant to help in the diversification of the economy. Such huge expenditures are expected to continue for the next several decades to help promote tourism, trade, and manufacturing as major pillars of the economy.
The government can significantly lower the cost of these major projects by focusing on the value for money. Instead of only basing the decision to award tenders on the lowest bidders, the government should go a step further and question why specific quotations were made. Putting the contractor to task to explain the cost at every stage and the value at that stage is critical. It will eliminate unnecessary inflation of project costs. As such, the government will be able to sponsor more projects. The business community will also benefit from the findings of the study. They will learn how to price their projects. They will understand the need to ensure that the cost at every stage is justified. It is normal and expected for them to make profits as commercial entities. However, the profit should be reasonable. They should not overprice these government projects to ensure that their operations remain sustainable.
Ethical Issues
When conducting research, it is often advisable to observe various ethical issues. In this study, I will observe various ethical considerations. One of the issues that will be of primary interest is the protection of the participants. According to Rehman and Alharthi (2016), it is common to find cases where individuals are victimized because of their opinion which may be in conflict with that of the majority or those in power. Some people often decline taking part in a study when they feel that their views may result in them being victimized (Kivunja & Kuyini, 2017). In this study, I will ensure that the identity of all the participants remain anonymous. Instead of using their real names, participants will be assigned specific codes (P1, P2, P3, P4, and so on) to ensure that their identity is protected.
Getting consent from the participants and any other relevant institution is another critical factor that one should consider when conducting a study. Given that the participants desired in this study should be working in government institutions or private entities that have worked closely with government in the recent past, it will be necessary to contact these institutions and get relevant authorization before contacting participants. As such, a formal letter will be delivered to the management of the selected institution explaining the relevance of the study and the reason why the institution was chosen. Participants will only be contacted when the relevant approval has been obtained from the management. I will then explain to the chosen individuals the importance of the study and the need for them to be part of it.
Participation in the primary data collection will be voluntary. I will explain to the participants that they can withdraw from the study at any time without any consequences. Kivunja and Kuyini (2017) advise that it is often unadvisable to coerce participants to take part in a given research. The school has strict policies regarding plagiarism and related academic fraud. I will ensure that the report is an original work that does not involve lifting off works that have already been done by other scholars. All forms of plagiarism will be avoided to ensure that the report adheres to the rule set by the school. It is equally important to ensure that the document is prepared and delivered within the timeline set by the school.
Dissemination and Policy Relevance
The primary goal of this study is to influence policies that govern public-private partnership projects in the United Arab Emirates and other regional countries. The report will explain the relevance of defining value for money in every project that a government takes alongside private entities. As Hu and Han (2018) explain, the project should earn profit to the private entity, lower cost for the government, and facilitate speedy completion of a project in a way that meets the desired standards.
The study will address the existing gaps identified during the review of literature. As explained above, limited literature exist that talk about value for money in the local public-private partnerships. Most of the existing documents were developed based on the economies of European and North American nations. This report will be valuable because it will focus specifically on the local economy. It will involve collecting data from individuals who have local experience on issues under investigation.
The document will propose policies which are relevant to the local governments of Dubai, Abu Dhabi, and other emirates in the country. The government has been sponsoring major projects in various sectors of the economy to spur growth. Real estate, roads infrastructure, and telecommunication are some of the major sectors of the economy where the government is heavily involving private players. This document will help explain how each project should be of value to the government.
Once the report is finalized, it will be necessary to ensure that it is disseminated in a way that will reach the targeted audience. Once the document is approved, I will ensure that it is available through various online platforms, especially in the local academic journal databases. This approach of dissemination will ensure that the document is accessible to both the policy-makers and academicians who may want to use it to inform their actions.
References
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Department of Finance. (2019). Public private partnership (PPP) policy. Dubai, United Arab Emirates: Government of Dubai.
Federal Highway Administration. (2012). Value for money assessment for public-private partnerships: A primer. New York, NY: US Department of Transportation.
Hu, X., & Han, J. (2018). Highway project value of money assessment under PPP mode and its application. Journal of Advanced Transportation, 4(1), 1-11.
Hurk, M. (2017). Beyond the financial logic: Realizing valuable outcomes in public–private partnerships in Flanders and Ontario. Politics and Space 35(5), 784-808.
Kivunja, C., & Kuyini, A. B. (2017). Understanding and applying research paradigms in educational contexts. International Journal of Higher Education, 6(5), 26-39.
Kozin, M., Pyrchenkova, G., & Radchenko, E. (2019). The role of public-private partnership in ensuring the economic security of the state. E3S Web of Conferences, 135(1), 1-8.
Makombe, G. (2017). An expose of the relationship between paradigm, method and design in research. The Qualitative Report, 22(12), 3363-3382.
O’Shea, C., Palcic, D., & Reeves, E. (2020). Comparing PPP with traditional procurement: The case of schools procurement in Ireland. Annals of Public and Cooperative Economics, 37(1), 1-35.
Organisation for Economic Co-operation and Development. (2007). Public private partnership: Value for money and the public private partnership procurement process. Paris, France: OECD.
Rehman, A. A., & Alharthi, K. (2016). An introduction to research paradigms. International Journal of Educational Investigations, 3(8), 51-59.
Valverde, M., & Moore, A. (2018). The performance of transparency in public–private infrastructure project governance: The politics of documentary practices. Urban Studies Journal Limited, 5(2), 1-16.
Wang, N., Chen, X., & Wu, G. (2019). Public private partnerships, a value for money solution for clean coal district heating operations. Sustainability, 11(2386), 1-18.
Willems, T., Verhoest, K., Voets, J., Coppens, T., Dooren, W., & Hurk, M. (2017). Ten lessons from ten Years PPP experience in Belgium. Australian Journal of Public Administration, 76(3), 316–329.