Provide a Model for Determining the Competitive Price Range in Public Private Partnership Water and Wastewater Projects in Iran (Case Study of Wastewater Collection and Treatment Plant Sirjan City)

Abstract

In order to choose the method of project implementation in the form of partnership or conventional method, various factors in the formation of the concept of value for money creation in each project are evaluated to be the basis for decision making. Many countries use Public Sector Comparators (PSC) to reach this decision. In this research, the correct calculation of PSC and simulation of risks to achieve a negotiable price range in water and wastewater projects in Iran has been done. The data collection tool in this study was to review various articles to identify the types of risks and distribute questionnaires and interviews with experts in the water and wastewater industry in order to determine the main and effective risks and then, the occurrence and severity of the effects of each risk. The price range was determined using the Monte Carlo simulation. After determining the main risks on PSC, using Monte Carlo method and risk distribution functions, the minimum and maximum amount of each risk and the total risk were determined for 70%, 80% and 90% confidence coefficients. According to the obtained model, to determine the price range, the price presented in the case study should be 500% to 550% in the minimum case and 750% to 850% increase in the maximum case for different reliability coefficients. As a result of this study, inflation risks, exchange rate fluctuations, regional political instability, public and private sector corruption have had the greatest impact on the PSC and price range determination.

Keywords

• public private partnership
• public sector comparator
• risk simulation
• value for money (vfm)