Question

Discuss the motivationsfor engaging in PPPs? Why stakeholder consultation remain controversial issue in PPP models?

Answer 1

Let us understand the meaning of PPP model.

PPP stands for Public-Private Partnership, it is a cooperative arrangement between two or more public and private sectors, mainly of a long-term nature. Here government and business that work together to accomplish a project to private services.

Motivation for PPPs:

· Improving risk analysis, transfer and management: This comes under project preparation, design and construction. Here risks are identifies, quantified and managed to some extend by analyzing technically.

· Increasing visibility up front of expected long term costs: Investment is made after analyzing the cost of project for whole life. It may include incentives to lower the long term cost of services delivery. It will motivates to overcome the prevailing incentives for short term thinking and encourages better quality of decision making.

· Better assurance of on time , on budget delivery: compare to conventional form of procurement PPPs once committed it has better track record of on time, on budget asset delivery.

· Improve asset maintenance over the long term: project operation mainly deal with capital and revenue expenditure. PPPs have stability in long term operating costs when the private partner is required to bear the risk of costs.

· Harnessing innovation: Instead of giving importance to government here it will motivates to give importance to private sector. It will focusing on outputs and allowing more scope for the private sector to decide how to deliver their outputs.

The following are other points which you can go through for more points:

· Optimising the design and construction for better whole-life management

· Reducing interface risks by promoting more effective contract integration and project management

· Improving the consistency of service delivery

· Improving budget certainty

· Enabling additional investment and improving affordability

· Matching long-term benefits to long-term funding

· Making the users pay for the economic benefits they receive at the point of use

· Benefiting from properly incentivised third-party project scrutiny

· Private finance as a driver for project performance

Other motivations reasons for engaging in PPP:

· Sharing risks

· Reduces public money tied up in capital investment

· Greater efficiency of construction services

· Improve operational environment

· Offers benefits to local economic development

· Enhances government integrated solution capacity

· Provide tax exemptions and reductions

· Gaining profits

· Achieving improved value for money

Stakeholder consultation remain controversial issue in PPP models

· There is issue of early consultation with all stakeholders by the government agency; reason is they are not maintaining register of all commitments made to stakeholders before bidding.

· Issue of not disclosing the history behind PPP project to the private companies, its better to keep transference in commitment from government to private company.

· Lack of information spreading to the public, here communicate clearly about project to general community on correct time.

· Difficulty in identifying stakeholders and their interest throughout the PPP life cycle, must be honest each other while communicating.

· They will not develop more Key Performance Indicators related to stakeholder management.

· There are no monitor relationships of stakeholders during operations.

· Issue created because of no regular stakeholder meetings and on site engagement meetings during operations.

· Interest of general public is not well addressed.

· There is beg issue of change of government over a time period will effect on private sector, so early improvement of the financial institutions must to known.