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

Abstract

This study aims to identify the factors expected to drive value for money (VfM) when using public-private partnerships (PPPs) for affordable housing in Indonesia. It utilises economy, efficiency, and effectiveness as the VfM criteria and employs the analytic network process to determine the relative importance of 13 factors compiled from the literature review. These are 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 with Indonesia’s PPPs. Effectiveness is identified as the most critical VfM criterion, implying that bringing other VfM aspects into public decisions is indefensible if the outcome—providing low-income people 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 emerge 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 ranks the highest. This study acknowledges several limitations and provides directions for future research.