Value-for-Money Drivers in Public-Private Partnerships in Affordable Housing in Indonesia: An Analytic Network Process Perspective

Abstract

This study aimed to identify the factors expected to drive value-for-money (VfM) when using public-private partnerships (PPPs) for affordable housing in Indonesia. Utilising economy, efficiency and effectiveness as the VfM criteria, the study employed the analytic network process to determine the relative importance of 13 factors compiled from the literature review. The factors were then grouped into five clusters: private sector capacity, transparent and competitive procurement, risk and reward allocation, public sector capacity and the nature of the long-term contract. The data were gathered through a survey of 20 experts with hands-on experience in Indonesia’s PPPs. Effectiveness was identified as the most critical VfM criterion, implying that bringing other VfM aspects into public decisions is indefensible if the outcome, providing low-income customers with suitable housing at rents they can afford, is not achieved. The justified scope and size of the project, clear output-based specifications, quality project planning and preparation and long-term service delivery emerged as the most critical factors enhancing VfM, each with a different focus on a specific VfM criterion based on local weights. At the cluster level, risk and reward allocation ranked the highest. This study also acknowledges several limitations and provides directions for future research.