Development of a conceptual life cycle performance measurement system for build–operate–transfer (BOT) projects

Abstract

PurposeThe purpose of this paper is to develop a new conceptual life cycle performance measurement system (PMS) based on stage level key performance indicators (KPIs) to measure the performance of build–operate–transfer (BOT) projects.Design/methodology/approachThis study uses a literature review to reveal the deficiencies of existing PMSs for public–private partnership (PPP) projects. Based on these deficiencies, four recommendations were proposed for developing a PMS. The validation of these recommendations was performed via focus group discussion sessions conducted with 12 experts. Then, a conceptual framework was developed based on the validated recommendations and the additional recommendations emerged during focus group discussions. Finally, the recommendations proposed by the focus group were tested by a questionnaire survey, the findings of the Friedman test and descriptive analysis validated these recommendations.FindingsFindings of the focus group discussion, Friedman test and descriptive analysis indicated that the PMS should have four crucial features to develop an efficient, effective and comprehensible PMS for the BOT project. Firstly, non-financial and financial KPIs should be integrated. Secondly, the PMS should be developed as a process-based system with stage level KPIs. The performance of the BOT projects should be monitored and reviewed continuously, however the most important KPIs should be used for continuous performance measurement to increase the applicability of the system and allocate the resources more efficiently.Research limitations/implicationsThis survey was conducted on experts who have experience with BOT projects located in Turkey, therefore, judgments of experts might be affected by external factors specific to Turkey such as geopolitical situations, investment environment. However, due to the nature of BOT projects, the experience of experts can also be utilized at the international level.Originality/valueThis is the first time a PMS has been developed to measure the performance of a BOT project. In addition, this system has unique features when compared with the PMS proposed in the literature. Especially, the stage level KPIs and continuous performance measurement with the most important KPIs throughout each stage has never been used. This research provides both public sector and private entities with an insight into effectively measure, control and manage their BOT infrastructure projects' performances throughout their life cycles.