Value generation and delivery in long-term service concession projects: the role of facility management in value optimisation.

Long-Term Service Concession (LTSC) projects, including Public-Private Partnerships and Alliance Projects have been used since the mid-1990s to procure facilities and services associated with social and economic infrastructure, at state and national levels. A key feature of LTSC projects is that they generally require a group of organisations associated with the construction and ongoing delivery of services to form a Special Purpose Vehicle (SPV) whose role is to provide sufficiently compelling evidence of technical and financial competence as to win the right to run the concession for the client over an extended period. The primary considerations driving such procurement are to achieve value for money, significant innovation, appropriate risk transfer and superior whole oflife outcomes - frequently questions of value for money and whole-life outcomes are raised during the operational phase of a facility. It is apparent that such concessions assume a fundamentally different nature pre-and post-asset delivery once the service delivery phase commences, and that the composition of project players/responsibility for value delivery is at the heart of this change. This paper reports the preliminary findings of a multiple perspective study of key LTSC stakeholders to surface dimensions associated with the role of facility management that enable value maximisation. It concludes that, contrary to expectations based upon theory, the facility management function is often underutilised during asset feasibility and design stages and that this inevitably has a negative effect upon value maximisation during the operational phase of a LTSC. Further, a level of uncertainty can exist as to who will ultimately deliver concession services during the operational phase, and what their eventual scope will encompass.