Developing Key Performance Indicators for Public-Private Partnership Projects: Questionnaire Survey and Analysis

Abstract

Public-private partnerships (PPPs) are increasing in popularity. Major challenges in the development of PPPs have resulted from the global financial crisis. However, with respect to their monetary value, PPPs are still an attractive option for public sector projects. Performance management and measurement, in which Key Performance Indicators (KPIs) are the core elements, viewed as effective methods to help PPPs deliver value for money. This article describes in greater detail a KPI conceptual model composed of 5 performance packages and 48 indicators developed by the authors in previous studies. A structured questionnaire survey explored PPP stakeholders perceptions of 48 project performance indicators (PIs) to identify actual KPIs for performance management and measurement in PPPs. Although the survey results show that all PIs are important, performance packages contribute differently to the overall project performance. A confirmatory factor analysis (CFA) was used to test whether the proposed conceptual model fit the observed set of collected data in a predictable way, and to further consolidate the KPIs. The improved KPI model uses 41 PIs, which indicate that performance improvement within PPP projects is strongly influenced by reasonable procurement, design and planning in the public sector, effective process control in the private sector, and the ultimate satisfaction of both the public and private sectors. These 41 KPIs can be used to identify strengths and weaknesses of PPP projects and improve effective performance management and measurement in PPPs.