Public-Private Partnerships (PPP’s or P3s)

SRS defines a Public-Private Sector Partnership as “a collaborative business arrangement between one or more Public Sector agencies and one or more Private Sector Partners (or Consortia), characterized by shared Risks & Rewards, and by shared Governance & Accountability, for the purpose of enhancing delivery of government services to citizens.” 

it is no secret that governments around the world are increasingly focusing on new ways to finance projects, to build infrastructure and deliver services. Public-Private Partnerships (PPP’s or P3s) leverage the strengths of both sectors. In addition to maximizing efficiencies and innovations of private enterprise, PPP’s can provide much needed capital to finance government programs and projects, thereby freeing public funds for core economic and social programs.

Despite recent criticisms levelled against PPP’s by labour unions and selected interest groups, Public-Private Partnerships are “answering the mail” in many leading administrations around the world (most notably the United Kingdom, Australia and the United States). Against these criticisms we maintain that the recent failure of highly publicized PPP’s lies not in the role, function or benefits of Public-Private Partnerships, but in the planning, execution and management of traditionally structured PPP’s.

 

The unrelenting challenge is how to realize and maintain sustainable, proportionate, mutual benefit for both public and private sector partners in a dynamic, unpredictable, continuously changing business environment. The traditional contract models adopted for implementation and execution of most PPP’s simply do not work.

A New Approach to Public-Private Partnerships (PP-P ®)

The “old” way of doing PPP’s too often seizes up in its execution as the operating environment in which the PPP was conceived undergoes significant change. Whether the changes arise from policy, organizational transformation, shifting political priorities or budgetary constraints, most PPP’s are constitutionally incapable of adapting to radical change. This is not the case with the SRS dynamic PP-P ® model.

 

SRS uses the acronym PP-P ® to refer not only to Public-Private Partnerships, but also to Public-Public Partnerships & Private-Private Partnerships. The same dynamic PP-P ® model in which Risks & Rewards, Governance & Accountability remain dynamically aligned throughout the relationship applies equally to all.

Critical Success Factors in the PP-P ® Model

Each project (whether public infrastructure, Information Technology, etc.) is defined by its own unique objectives, constraints, risks and realization strategies. Successful, sustainable implementation of PP-P ®s depends on how each of the following Critical Success Factors (CSF’s) is executed and managed:

 

1.      Realistic Opportunity Assessment (PPP’s are not always the right solution)

2.      Understanding of Public & Private Sectors

3.      PP-P ® Project Management Maturity

4.      Internal Public Sector Consensus & Alignment

5.      The “Human” Factor

6.      Partner Selection Process (Strategic Sourcing)

7.      Shared View & Timing of Expected Benefits

8.      Dynamic Risk-Reward Model

9.      Dynamic Governance & Accountability

 

Obviously, depending on the nature, scope and scale of the project, not all the above CSF’s will be equally in play in the design, implementation and on-going operation of each PP-P ®. However, one thing can be counted on with absolute certainty: that nothing can be counted on with absolute certainty. Change is the singular predictable constant in project management. And that is why only an SRS dynamic PP-P ® model in which both Risk & Reward, Governance & Accountability, remain continuously aligned with changing conditions and circumstances is the singular path to successful, sustainable PP-P ® implementation.