John Seed, head of Infrastructure Finance and investment division of Mott Macdonald, a global management engineering and development consultancy, concludes his observations on how to develop infrastructure in Africa.
Typical schools PPP stakeholders
An example of a schools PPP shows just how many different stakeholder groups might require and active involvement in the development of such project (see figure 1). Each of these groups will have different needs and interest in the project. For example:
• Planning Authority will want to know what is being built and how this fits into the environment and community needs.
• The Capital Government budget Holder will want to know how much the school will cost.
• The Council Works Department will want to know that the facility will be built to their required standards.
• Parents will want high quality and safe facilities for their children that will enhance their education experience.
• Communities will want a facility that serves them well but for the minimum cost possible so there in money left for other community needs.
What is stakeholder management then?
Having identified and categorised stakeholders and then chosen suitable stakeholder group representatives, stakeholder management is the planning and enactment of the whole engagement process between the project parties and stakeholders throughout the feasibility, procurement and construction stages of the PPP process. There are many different approaches to this and several good project management tools and protocols that can be used but generally the engagement planning process starts with the development of the detailed programme for each procurement stage. Once developed and agreed between the administration and their advisors (and the private sector partner in later stages), those activities that involve decision making of any kind should be carefully analysed to assess if any or all stakeholder groups should be involved in that decision making process. If key decisions are made without the involvement of key stakeholders then they will feel disenfranchised and it will be difficult to re-engage with them later in the process.
A key difficulty in this is ensuring that the stakeholder representatives:-
• are given sufficient authorisation by their stakeholder groups/organisations to make quick decisions on their behalf
• have sufficient time to attend meetings and review documentation such that these decisions can be made in a timely fashion so as not to delay the procurement process
This is why it is fundamentally important to plan the engagement process very carefully from the outset such that the engagement manager can advise each stakeholder representative of the programme for their involvement, the decisions they will be expected to have an involvement in and how much time they will need to commit during each activity and at each key milestone.
Guidance and Standardisation
PPP as a procurement model has been practiced now around the world for more than 20 years. Consequently there is a large amount of guidance and best practice available produced by governments that have developed large PPP and PFI pipelines of work. Much of this contains recommendations on stakeholder engagement and management.
Should bidders and stakeholders interact?
The simple answer to this question is ‘yes’ but this must be carefully controlled, especially during the tendering process, in order to ensure probity. If high level output specifications are used in the tender documents, as opposed to detailed designs, then bidders can only truly ensure that they are meeting stakeholders needs when developing designs if they are allowed to engage directly with those stakeholder groups. This has proved very successful on past PPP projects especially in ensuring that the stakeholders involved are fully ‘bought-in’ to the Preferred Bidder selection and the design they are proposing. However, the administration and their project management team must ensure that stakeholders involved in this process are fully aware of the specification requirements and do not stray ‘off-line’ in any way during the engagement process as this can lead to bidders receiving conflicting messages to what is stated in the tender requirements.
Summary and conclusions
Well planned and executed stakeholder engagement process will help to ensure that value for money is achieved and fully recognised on projects. It also helps to mitigate against political and reputational risks to which PPPs are prone due to their size and value as well as social importance. There is much international experience of getting this wrong on big PPP projects and the serious consequences that subsequently occur. However, there is also lots of recorded experience of doing this right and hence good guidance is available on processes and techniques that can be easily adopted to suit new PPP projects in Poland. But such stakeholder processes must be adopted from the very outset of new projects and so stakeholder engagement must be one of the very first considerations of any administration embarking down the path to major infrastructure investment.