Obtaining value for money on rail project extensions


A number of major new rail transport systems are presently being delivered under Public Private Partnerships (PPP) contracts. In each case, it was likely from the outset that the system would be extended during the life of the PPP contract. However, PPP contracts can be inflexible, relative to other contractual delivery models, when it comes to making changes to a project. This lack of flexibility can leave government vulnerable to private sector profiteering on the commercial terms of significant extensions. This paper considers how governments can manage this vulnerability when contracting under a PPP contract. It also considers whether alternative contractual models might provide government with better value for money over the longer term.

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