Selection of Performance Objectives and Key Performance Indicators in PPP Projects: A Review

Public-Private Partnerships (PPP), now applied widely in the global construction market, are more complex than conventional public procurements in economic, social, political, legal, and administrative aspects. Therefore, in order to ensure good performance and subsequent success of project, PPPs require a well-formulated performance management system that takes into consideration the perspectives of all stakeholders involved. A general agreement on how to measure success is necessary, which may be achieved by the definition of Performance Objectives (POs) of the project. Further statistical evidence, often labelled Key Performance Indicators (KPIs), may be employed to ensure that the actual progress is at par with the targeted. Determination of appropriate POs and KPIs is important for successful performance management. Numerous studies have been conducted worldwide to identify a desirable set of POs and KPIs in PPPs. This paper compiles the information gathered from such studies, to arrive at a collective understanding of the considerations while selecting POs and KPIs. Studies imply that the conventional notion of sticking to the “iron triangle” criteria, which considers time, cost, scope and thereby quality to be the basic criteria for project success, has shifted to a broader perspective. It now includes several other factors such as user satisfaction, benefits to stakeholders, innovation and development, relationship among stakeholders, environmental impact etc. It was also noted that although all stakeholders approved of the importance of most indicators, there were significant differences in the perception of different stakeholders regarding safety, contract management and concession period.