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Latest posts by Jonathan Kush (see all)

The design-build-finance-operate (DBFO) model, also called the public private partnership (PPP) model, or the Public Finance Initiative (PFI), is one of the procurement methods used predominantly by governments. In this essay, we analyse what it is, its many variations, advantages and disadvantages

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DBFO Construction Management Case Study


Key Learning Outcomes

By the end of the case, students should be able to:
  • Understand what the Design Build Finance and Operate (DBFO) procurement model is.
  • Analyse the main advantages and disadvantages of the DBFO procurement model.
  • Apply theoretical models in construction management to real life projects and situations.

 

What is the Design Build Finance and Operate (DBFO) procurement model and what are its advantages & disadvantages?

1.0 INTRODUCTION


What is the Design Build Finance & Operate (DBFO) procurement model? The design-build-finance-operate (DBFO) model, also called the public private partnership (PPP) model, or the Public Finance Initiative (PFI), is one of the procurement methods used predominantly by governments. In this model, the government is the project owner and it floats a contract inviting private firms to participate in the project. The government may provide part of the funds by using special purpose vehicles, or bonds, funds, and through lotteries. The private party funds either the whole amount or the balance; it designs the project, builds it as per the specifications, and then operates the completed infrastructure for a fixed amount of time. During the time when it operates the infrastructure, the private party earns income from the project, to recoup its investment. After the fixed tenure expires, the project reverts to the government. The UK government uses this model extensively and some examples of PPP projects are the Chunnel Tunnel Link, the London Underground system, many NHS projects to build hospitals, toll roads on the highways, Stoke on Trent schools, Blackburn Hospital, and many others (Abou-bakr, 2013).

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