Appendix

PPP

In 1998 the UK Government proposed to renovate and modernise sections of the

London Underground network by means of PPP agreements. (BankWatch). Under the
PPP, operations will be managed by the public sector and maintenance modernising
the infrastructure was done by the private sector. (House of Commons, 2002)

This occurs during the bidding process, as organisations submits bids involving prices
lower than the average cost. Such bidders are betting on the renegotiation process to
restore its financial viability. The public authority can behave opportunistically, by
taking advantage of the fact that the private partner's large investments and sunk the
project. [Marques, Berg, 2010].

In the and the Royal London Hospitals PPP project, the hospital staff, different
shareholders, contractors, sub contractors and their project managers and it always
assumed that they will share important information in order to meet the projects
objectives. However, because of self interest, they will not always be willing to share
vital information with other contractors at all times. (Ceric, 2012, p.522-525)

HM Treasury agreed that some risks that were transferred to the private partners did
not offer value for money, (HM Treasury, 2012, p.61).

This is true for PPP because in the contract, risks are either borne by the public
partner or transfered to the private partner

Metronet

Metronet guaranteed subcontracts for capital works to its shareholders. This

arrangement, known as a tied supply chain, aimed to guarantee the availability of
resources at a firm price. (National Audit Office, 2009, p. 12).

Connect Plus

The M25 is the orbital motorway around London and attracts up to 200,000 vehicles
per day (Operis, 2013,). The work was completed in time for the London 2012
Games.

Capital Hospitals

Barts Health NHS Trust is the largest hospital group in the UKs National Health
Service, with government revenue of 1.25bn and 14,000 staff providing healthcare to
2.5 million people to the east of London. At the heart of the Trust are two historic
hospitals, St Bartholomews (Barts) and the Royal London. The UK government
decided to upgraded capabilities to provide 21st century healthcare and developing
buildings that would adapt to future needs.

The project is worth 1.1billon and by implementing the project as a PPP project the
UK Government expects to reduce the costs of procuring and operating the hospitals
over their lifetime, as a result of both increased efficiency in facilities management
and the transfer of construction and design risk to the private sector. (Europa,
2006)

Barts Health NHS Trust is the largest hospital group in the UKs National Health
Service, at the heart of the Trust are

Orange Book risk management framework

This core steps is similar to the Orange Book risk management framework, which was
produced in 2001 by the UK Treasury, as a resource for developing and implementing
risk management processes in government organisations and the steps also includes
identifying, assessing, addressing, reviewing and reporting risks (Orange book, 2004,
p.7).