John Seed, head of Infrastructure Finance and investment division of Mott Macdonald, a global management engineering and development consultancy, continues our series of looking at the options for developing infrastructure in Africa.
One of the most important factors that determine the success of a PPP project is whether the project has achieved value for money. However, just as ‘beauty is in the eye of the beholder’; value for money is determined by the satisfaction of the stakeholders with the cost and quality of the finished project.
Many countries undertaking large PPP programmes across different sectors have understood the importance of stakeholder engagement. If a facility or asset on completion does not satisfy the key stakeholders (including the end user groups and staff that must work within the facility) then it is very difficult to justify that a project has achieved value for money. This has led to project failure and significant media criticism of administrations and governments responsible for such projects.
Yet, it is still a common mistake made by the promoters of PPP projects to insufficiently engage the stakeholders throughout the development of the project. Good stakeholder engagement ensures initially that the success measures for a project are well defined and then ensures stakeholder ‘buy-in’ to the development of solutions that achieve those measures. In this article we will explore the issues surrounding stakeholder engagement specifically in school and hospital PPP projects. Years of PPP experience have demonstrated that projects which achieve good stakeholder engagement generally cost less and take less time to procure and are better received by the end users and communities.
Technical hospital PPP requirements
The complexity of requirements for hospital PPP development can be daunting for any administration embarking on such a procurement programme.
In the first place, Feasibility Studies are performed to assess demand for various treatment requirements for a given population which helps to determine the hospital functional requirements. This is then translated into Project Specification for the hospital. These ‘output’ specifications will state the Capital and Service requirements for the new facility.
Capital works
Recent new build PPP hospitals have been constructed to provide a wide range of clinical services for their target communities. These tend to be ‘general’ hospitals rather than specialist hospitals and many of those built are also teaching hospitals. Consequently, new PPP hospitals tend to be large in size and complexity. Table 1 below contains a list of bed numbers by specialist department included in a large PPP teaching hospital in the UK recently.
Facilities Management Services
The 25-30 year operational contract common to PPP procurement normally includes the requirement for the private sector partner not only to maintain the hospital in a good functional condition so that it is ‘available’ at all times but also contains the requirement for the performance of ‘soft FM’ services such as catering, cleaning and security for example. In fact, hospital PPP procurements are renowned for containing the highest number of FM services requirements as demonstrated in Table 2 below which details the FM services required in a recent Australian hospital PPP project.
With these capital and operational requirements in mind, it is important for any administration to consider the broad range of people that these detailed requirements will affect on a day-to-day basis. This exercise is known as stakeholder identification and classification. It is not unusual for stakeholder numbers on large hospitals to number in the thousands or even tens of thousands when end users and staff numbers are counted into this mix. Consequently, as it is impossible to engage with every single person who is or may become such a stakeholder, it is normal following the identification and classification exercise for the administration to seek out stakeholder group representatives. These are key individuals who can represent the views of large groups of stakeholders and have been given the time and authority to get involved in the PPP procurement from initiation and concept development right through to construction completion.
