Value for money test in infrastructure procurement

This paper describes the application of value for money (VFM) test in public project and infrastructure to evaluate whether PPP route should be chosen. The role VFM test played in the determination of procurement method is illustrated, and then the main approach to VFM test is proposed, which is the comparison between PSC and PPP. In order to measure if PPP is more VFM than traditional procurement, a benchmark should be set up. This benchmark is known as the public sector comparator (PSC). So the composition and calculation of PSC is introduced in this paper, and the matters need to be paid attention when using PSC is analyzed.