Value for Money in Infrastructure Procurement: The costs and benefits of environmental and social safeguards in India

By Oshani Perera, Laura Turley, Tilmann Liebert, Mariana Hug Silva, Pattie Gonsalves, Aman Gupta, Sumeet Manchanda, Sam Nelson on January 23, 2014

This report debates the extent to which public-private partnerships (PPPs) are delivering value for money (VFM) in India.

While VfM is traditionally interpreted to mean the lowest-priced alternative at the time of commissioning, in the context of sustainable development it is understood as value for money across the asset life cycle. This approach embodies the principles of "total cost of ownership" and "whole-life value"—accounting for the costs of planning, designing, building, operating and maintaining an asset. It can therefore be used to account for the medium- and long-term efficiency gains and cost reductions enabled by sustainable infrastructure.

Our findings indicate that despite the best-in-class laws, policies, formal processes and institutional frameworks, PPPs in India might not be delivering VfM across asset life cycles. We make policy recommendations on how to improve the existing safeguards, on how to move beyond the existing safeguards, and on leveraging existing infrastructure development funds so as to lower the cost of capital for sustainable infrastructure.

Report details

Public Procurement
Focus area
IISD, 2014