Public Private Partnership Projects: Benefits And Challenges
PPP Cooperation for Faster Project Execution
In the present situation the public-private partnership becomes the major way to develop the infrastructure. The private sectors always looking for some budget friendly profitable method which is very much acceptable for the PPP arrangement (Osei-Kyei & Chan, 2015). This is suitable because it focus on the financial targets and on the economic goals of the project. In this case the selected project is an Indian PPP procurement which is focusing on the infrastructure development by developing better highway roads in India (Zou, Kumaraswamy, Chung & Wong, 2014). In this case a qualitative analysis is used for answer the questions of the research. The key findings of the project suggested more developed strategies for the sustainable project.
The main demands for the projects are divided into some phases for this project. This phases are the project identification, project development, project procurement and the project management (Cooper et al., 2014). In the phase of the project identification strategic planning and the pre-feasibility study of the project is done. In the phase of the project development the plans are reviewed and the feasibility study is fully done. The project procurement phase includes the preparation of the procurement. Lastly in the project management phase finalization of the contract and the contract is monitored and managed. In this case the project provided the strategic values by successfully developing the infrastructure using the arrangement of the public-private relationship.A main reason behind various type of project failure is the lack of participation in the project of the stakeholders (Sage, Dainty & Brookes, 2014). In this project open informed deliberation and actively decision making has been done with the stakeholders of the project. Also, in this particular project the government has implemented a bidding process with the document of model bidding. Though the bidding process undergoes with high transactions costs this is actually helping to meet the expectations of the project stakeholders by streamline the procurements of the project of the infrastructure (Gupta, Trivedi & Kansal, 2013). With that in this process transparency of the bidding process is maintained which helped retain and maintain the trust of the stakeholders. Thus the basic expectations of the stakeholders from the project is satisfied.
In this PPP project procurement main impact of the social assessment and the environment assessment is the tools that are commonly used in the case of the full study of the feasibility. This appraise the extent for which the infrastructure development will hold an adverse effect on the environment of its surroundings (Mu?ller et al., 2013). Due to this environment can be heavily affected. The infrastructure development process of the highways has a vast impact on the environment assets which are the land, water resources, materials, energy and ecology. For a developing a new highway land is a must needed asset (Constantinides & Barrett, 2014). Usage of the land can heavily impact the environment and the degree of the affect depends on the location of the environment. When a land is used for the infrastructure development deforestation occurs in most of the cases as this highways are built outside areas of the cities. Water resources also got impacted by the infrastructure development as various type of construction material can affect the normal flow of the water. In this case mitigations of the impacts due to the infrastructure development is fully not possible. Still the leadership of the project addressed many of these impacts in a very good way. In this case the project leaders have used the top-down approach to address the side effects of the project (Haldea, 2013). In the first step of the top-down approach risk of the environmental impact is determined. In the next stage the consistency of the risks is determined with the activities of the project. Then the risks are evaluated and prioritized according to the degree of those risks.
In the planning stage of the selected project a pre-feasibility of the study has been done. In this pre-feasibility study of the project, social and environmental analysis has been done and with that financial viability has been also done. Due to the project of the sustainable development two very common environmental impacts were overlooked in the stage of the project planning (Elkington, 2013).The overlooked environmental impacts were the water quality issue and the land usage issue. The main concern of the water quality impact for this sustainable projects is the ground water pollution and the toxics released in the water due to the construction materials of the highways. In the case of the land usage the main concern was the deforestation which will increase the rate of the greenhouse gases (Henrique & Richardson, 2013).
In this project of the highway development using the public-private partnership some improvements can be presented in the project execution stage. This improvements can be achieved by introducing a high performance team in which all the members of the project can work efficiently (Tenera & Luís Carneiro, 2014). The whole process of the project can be divided into some smaller sections and this smaller sections can be executed by a specific group of members. Thus this method can increase the efficiency of the project execution. Also, assessing the risks related with the sustainable development project will bring improvement in the project execution.
There are some project leadership lessons which is learned from the project of the sustainable development. This lesson helps to improve the project in various aspects. One of these lesson helps to create better behaviour and relationship in the project team. This better relationship can be created by reducing the communication gap between the project team members (Packendorff, Crevani & Lindgren, 2014). The second assessed leadership lesson is letting the project team members visualising their own imagination. The instructions of the project leader is not always helpful for the project team members and for the project itself. Letting the project team members visualising their own ideas can present new ideas for the project which can be more efficient compared to the initial idea. Another lesson from the sustainability development project is that effective meetings must be implemented with one-to-one session. This meetings can help to clear doubts of members of the project and thus it can improve the efficiency of the project. In this cases the leader decides how the project will be executed so meeting with the project team member is very much important.
The main challenges faced by this public-private partnership project to move it from the project status to operational status is the land acquisition. The problem in land acquisition occurred due to the lack of coordination in the in the public sector. For this there is problem in clearance and getting permits. As this sustainable development project of the highway building is having problem in land acquisition this project is facing problems like time overruns and cost overruns (Rajan, Gopinath & Behera, 2013). For this reason the organizations facing losses and thus the sustainable development is affected. Also, in this public-private partnership projects sustainable design is implemented. This type of design can save the operating costs but it introduces the challenge of resources maintenance.
The time overrun and the cost overrun of the project can be managed and overcome by following some strategies. This strategies discussed in the following sections.
- Customized agile project management: The agile method is a type of project management which is one of the best in this case. The agile project management can easily adapt changes occurred in a project thus major changes issues can be mitigated easily (Moran, 2015).
- Proper R&D:A proper research and development team of the project can easily identify the changes required for the project in the future (Berchicci, 2013). Thus it can save the project from being overrun by time and cost.
- Resource Optimization:Resource utilization can be optimized to overcome the resource management challenge (Ghoddousi, Eshtehardian, Jooybanpour & Javanmardi, 2013).
The project challenges of the sustainable development of the Indian highways can be improved by proper initiating of the project planning (Tasevska, Damij & Damij, 2014). With that other opportunities which can improve the project challenges are the close monitoring, focusing on the project outcome, performance measurement, full utilization of the construction team, training and development of the project team members and full focus on the delivery, quality and the cost of the project.
In this project of the sustainable development the main stakeholders of the projects are divided in two parts which are the internal stakeholders and external stakeholders (Abidin, 2015). The internal stakeholders are the project unit, government, legal staffs of the government and the consultants who are involved with this project for proving strategic ideas and information to the project. The external stakeholders for this projects are the investors of the project, the users who will be suing the service and the affected groups due to the project. In all of the projects active participation of the project stakeholders is required for successful competition of the project. This is also same for the public-private partnership projects. In this case to maintain the relationship with the project stakeholders in the highest condition a stakeholder management system is introduced. This type of system can help to bring the project stakeholders together. By bringing the project stakeholders together this system helps to send consistent and clear information to the project stakeholders as this system acts as a communication medium (Hall, O’Brien & Woudsma, 2013). A strategic and coherent approach is taken for the mechanism of the communication so that the stakeholders can be engaged and informed about the successful project implementation and development.In this case of the project the main stakeholders represent the governmental group as government is actively integrated in this project. The government is dynamically integrated into this project because as this project based on the public service, all the cost of the project is run by the government (Eskerod & Jepsen, 2016). For running the project the government is using the earned taxes from the citizens. Thus government is included in this project. The project unit is executing the whole project so they automatically becomes an important stakeholders for the project. The project consultants and the government staffs are directly tackling various issues related with the project so they are an important stakeholders for the project. The investors of this project expecting good outcome from the project for the revenue generation also with that the users of the project is an important stakeholders. Some groups of the peoples may affect due to the land acquisition or the environmental impact of the project. As they are also indirectly involved with this project they becomes external stakeholders of the project.
The main attribute shown of this public-project partnership is the additional benefits of the public-private partnerships. As an additional benefit this public-project partnership is that it provides more private capital to the project, advanced technology access, better risk management techniques and better practices for the management purpose (Calabrò & Della Spina, 2014).
In this case most of the stakeholder performed actively to complete the project. The most active stakeholder for this project is the government as the all the cost of the project is run by the government. After government the most important stakeholder is the project team as the responsibility of competition of the project is lies on the project team. Following this two project stakeholders other stakeholders are the project investors, government staffs and the project consultants and their involvement in this project is moderate. The least active stakeholders are the users of the project and the group of the peoples who were affected for this project (Roeder, 2013).
The main potential tensions between the stakeholders is the conflict between them regarding various types of issues. This type of conflict occurs because the aim of the every stakeholders is to get benefitted from the project (Eskerod & Huemann, 2013). Thus to fulfil their aims different types of stakeholders have different type of priorities. For this reason conflict between them arises.The trade-off is the process of the project management where all the stakeholders discusses and decides the best approach to meet the goals of the project. To achieve the optimal strade-off between the tensions time is taken for reviewing the objectives of the project (Wu, Jia, Johansson & Shi, 2013)
The needs of the stakeholder’s is fulfilled in this case. The basic needs of the government stakeholder is to get proper update about the project such as estimated project completion date, land usage etc. The needs of the other stakeholders form the project was the profit (Mehta et al., 2013). In this case the all of the other stakeholders are having profit from the project excluding the government staffs and the affected groups of peoples.The competing interest between the private and public stakeholders resolved by proper monitoring of the stakeholder relationship and by managing the relationship.
The interests of the stakeholders can be improved by mapping the stakeholders properly (García-Nieto et al., 2015). With that the influence is another key point. The reaction of the stakeholders for different type of projects are different. So, the triggers about the projects need to be identified to improve the stakeholder interest.
In this type of public-private partnership the main funding is the government funding. This type of government funding focus on a specific stage of the lifecycle of the whole project. Also, there can be single and multiple programs for funding (Cunningham, Baines & Charlesworth, 2014). The funding model used in this case is the operating phase funding model where the cost support is given by the government (Kumar, Jindal & Velaga, 2018). In this case operating cost support is provided.
In this case the selected case study achieved the financial sustainability in the PPP project.Explanation: In the case of the PPP projects the submitted bid proposals by the private entity are evaluated regarding various type of aspects which relates with the financial sustainability and technical feasibility (Ismail, 2013). In the selected case study the bid is awarded to the private entity having the most score on the above mentioned two factors. Thus it achieved the financial sustainability.
Trade-off is not a big issue in this case study project as all the cost operation is done by the government in this case (Okun, 2015). For small type of trade-offs method of combining financial and public interests are used in this case study.
To improve the project finance management best practices need to be implemented in this project. The best practices are using analytics to monitor the project, standardizing the data and the processes to ensure single source of truth and delivering real-time information using social tools and mobile devices (Weber, Alfen & Staub-Bisang, 2016). Cloud based system can be used for to monitor the system remotely, data can be standardized by using the normalization matrix and by assessing the data entry points. The process standardization is achieved by using a centralized platform with a consistent format. Lastly, to get the real-time data stream imperfections can be handled and the stored data and the streamed data can be integrated to get the real time data from the projects.
|
Description |
Total Cost |
|
Private partnership cost |
500 mil USD |
|
Acquisition Cost |
1500 mil USD |
|
Staff salaries of the project |
500 mil USD |
|
Equipment Cost |
400 mil USD |
|
Road material cost |
900 mil USD |
|
Maintenance Cost |
3000 mil USD |
The Importance of Government Factors in Project Execution
From the selected case study of the public private partnership project it is founded that this type of public private firm cooperated project can help to execute a project faster because many times the Government firm faces various type of technical and other problems. This type of problems can be solved by the private firm easily. According to my opinion this thigs are actually true because in many times Government needs help in a particular type of project. This help can be provided by a private company. Also with that the private firm may need permissions from the government while executing a project. This type of processes can make the project longer which will increase the project cost. Thus, this type of collaborative projects can help in the sustainable development faster as less time is required because the government is initially involved with the project. This learning will help me in my professional development as a project manager because I assessed and realized that how the presence of the government factor is important for a project execution. This project also helped me to learn how to address the needs of the stakeholders. I also learned how the financial sustainability can be achieved using the PPP projects. As a whole I think this case study of the Indian Highway projects helped me to develop myself as a project manager when executing a public private partnership project.
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Financial Sustainability through PPP Projects
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