TOWARDS SUSTAINABLE PRIVATE FINANCE INITIATIVE (PFI) PROJECT DELIVERY: STRATEGIES FOR MITIGATING INCOMPLETE CONTRACT IMPLICATIONS
DOI:
https://doi.org/10.21837/pm.v24i44.2254Keywords:
incomplete contract, Private Finance Initiative, strategy, concession contractAbstract
Incomplete contract (IC) is defined as a contract that fails to clearly spell out ex-ante the parties’ requirements, duties and obligations for every realised contingency and it has gaps, missing provisions, and ambiguities in its terms. Past studies have found that PFI contracts in Malaysia are incomplete and consequently caused positive and negative implications. Addressing these implications is crucial to achieving not only project efficiency but also long-term sustainability in PFI project delivery. The methodology adopted combines an intensive review of literature on IC and PFI, and two (2) rounds of Modified Delphi. A total of 55 strategies were identified for the 12 clauses deemed incomplete in PFI contracts. Some of the strategies are to ensure that both public and private representatives involved are technically knowledgeable, to develop a complete database on the service level and standard for the purpose of determining the KPI, and to provide a clear statement of needs. By mitigating the implications of incomplete contracts, these strategies contribute towards more transparent governance, efficient resource utilisation, and sustainable outcomes in future PFI projects. The findings of this research can serve as a reference for key PFI stakeholders, policy makers and contract drafters in their future endeavour in developing and managing PFI contracts that support sustainable project delivery.
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