In planning a Private Finance Initiative (PFI) business, after the business to implement is selected with the cost benefit analysis or other measures, evaluation and judgment on VMF method is adopted concerning whether the business should be implemented in a conventional method for public work or in the PFI method.
VFM is one of the basic ideas of the PFI method, and is a concept intended to facilitate efficiency in undertaking infrastructure improvement based on the concept of "making the best use of financial funds for citizens." To be specific, when comparing a case in the PFI method with a case in a conventional public works method, if the former is more cost-effective, the PFI method will be adopted.
VFM can be assessed by calculating the life cycle cost during the entire period of a social infrastructure improvement project. This project evaluation analysis method using VFM is regarded as a concept that can be fully utilized for project evaluation in general enterprises.
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