Project Finance and Procurement

PROJECT FINANCE AND
PROCUREMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. PPP Procurement Arrangements........................................................................................1
2. PPP Project Contract Procurement vs. Traditional Procurement.......................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Project Procurement is a comprehensive process which is followed with a sole purpose to
acquire goods and services from the external environment (Atmo and et.al., 2017). Since a
project is usually undertaken for a longer period of time, it is important to note that higher the
complexity of a specific project, the more procurement it would need from third-party vendors as
well as partners. This report aims to provide a critical examination of benefits and demerits of
PPP procurement arrangements has been taken into account. Additionally, those mechanisms
have also been highlighted that must be implemented in order to mitigate such disadvantages.
Apart from this, a difference between PPP project contract procurement and traditional
procurement has been undertaken. For this purpose, a case-based study has been analysed which
talks about the sovereign risk associated with social infrastructure PPP, specifically in relation to
Irish Schools.
MAIN BODY
1. PPP Procurement Arrangements
A Public-Private Partnership is one which includes acquisition of goods and services with
an intention to deliver high quality projects or services that were traditionally executed by the
public sector only. This type of partnership may have different forms and notions associated with
it, however, it helped in the communication of value addition through the exploitation of private
sector competencies.
The main rationale behind the adoption of this arrangement by the Department of
Education and Skills (DoES) was to overcome the shortcomings of traditional procurement
methods which resulted in delay in delivery time, inefficiencies and budget overruns.
 Advantages:
One of the main advantages of PPP Procurement arrangement is that one is able to
achieve cost efficiency (Blanc-Brude and Makovsek, 2013). As the government does not need to
look for more than one outside vendor here, the number of vendors associated and their fees
thereof are waived into one single entity. Through this private enterprise's competencies in
Financial Planning, Designing, Construction and Cost Controlling, the state is able to relish the
advantages of service bundling. Thus, enhancing their overall returns to the respective
shareholders. In the context of the given case scenario, economic progress was greatly
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