Improving Value for Money in Italian Project Finance

Abstract

Purpose

The purpose of this paper is to detect how Value for Money (VfM) in Italian Project Finance (PF) investments can be enhanced and challenging criticalities minimized, with a synergistic interaction of macroeconomic, legal and institutional actions.

Design/methodology/approach

Analysis of VfM quantitative key drivers, within a public-private partnership (PPP) framework with specific reference to a recession context, with infrastructural capital rationing implications. Empirical evidence is given by an Italian PF healthcare model, testing the impact of legal and macroeconomic changes.

Findings

Deleverage, ignited by W-shaped recession, disinflates PPP investments, so forcing to innovative and penniless solutions. Unreliable and short-sighted legislation and consequent unfriendly business climate may frighten investors, so decreasing competition and VfM.

Research limitations/implications

VfM sensitivity to macroeconomic and legal/institutional parameters is too wide and capriciously erratic to be comprehensively modeled. Tips for further research include pro-growth tax and budgetary policies, risk minimization issues and other synergistic targets.

Practical implications

Guidance to regulators to fine tune legal and institutional tools, so as to create a stable, business friendly environment. Recessions may be softened by sensitive policymaking, or exacerbated by short-sighted ignorance and lack of strategic focus.

Originality/value

Unprecedented analysis of legal and macroeconomic changes on VfM in Italian PF investments, with original tips for VfM optimization, in a comprehensive PPP framework.

Citation

Moro Visconti, R. (2014), "Improving Value for Money in Italian Project Finance", Managerial Finance, Vol. 40 No. 11, pp. 1058-1077. https://doi.org/10.1108/MF-07-2013-0171