Value for money (VFM), which means doing more with less, is the core idea of government applying the model of public-private partnerships (PPP), and a technical means for government to evaluate whether to replace traditional procurement mode with PPP to provide infrastructures and public services. The Circular of the Ministry of Finance on Issues concerning the Promotion and Application of the Public-Private Partnership Model (Cai Jin  No.76) requires to "actively use VFM evaluation philosophy and method for reference"; the Circular of the Ministry of Finance on Issuing the Operational Guidance for Public-Private Partnership Model (for Trial Implementation) (Cai Jin  No.113) stressed that in the course of project demonstration, government shall make the VFM evaluation for the PPP model. It is an important link of China's capability construction for PPP to strengthen the learning and use for reference of foreign VFM philosophies, evaluation methods and practices.
The China Public Private Partnerships Center has compiled this book for the purpose of helping domestic PPP practitioners learn about the meaning of VFM and setting up a VFM philosophy. This book comprises four chapters. The first chapter briefly describes the meaning of VFM, driving factors, evaluation framework, application, limitations and so on; the second chapter describes the qualitative VFM evaluations of some countries and regions; the third chapter describes methods of quantitative VFM evaluation of relevant countries and regions, mainly including how to set a public sector comparator and a shadow price; and, the fourth chapter describes key elements influencing the quantitative VFM evaluation, such as discount rate, risk allocation and quantification, and competitive neutral adjustment.
This book may be used for reference by the government agencies, private partners, financial institutions, consulting agencies, research institutions and so on engaged in the PPP work. This book, as an exploratory research, is not the operation guidance for the VFM evaluation.
Owing to limited time and professionalism, there are unavoidable omissions and deficiencies herein. Thanks for your understanding and hope your comments.
This book was published and distributed by the China Commerce and Trade Press.