Abstract
Private financing of road projects in developing countries has considerably declined in recent years. Currency crisis have led several projects to fail and increase risk levels of potential projects. For attracting private investments in risky projects, governments have offered incentives and support measures. Government must assure themselves and convince the general public that support measures given are not excessive. This could be possible by using a transparent, open and quantitative method for evaluating/assessing the risks. This paper reviews methods and techniques used for assessing the risk in private finance projects. A value-for-money (VFM) methodology used in the UK is presented. It was identified that the main shortcoming of the VFM method is surprisingly the lack of transparency towards the general public. This paper indicates some considerations before taking into account the application of the VFM method in developing countries, and proposes a VFM risk assessment methodological approach for developing countries.
