Public private partnerships: improving governance and performance amidst emerging economic realities

Citation

Kumaraswamy, M. and Ling, F.Y.Y. (2010), "Public private partnerships: improving governance and performance amidst emerging economic realities", Journal of Financial Management of Property and Construction, Vol. 15 No. 3. https://doi.org/10.1108/jfmpc.2010.37615caa.001

Public private partnerships: improving governance and performance amidst emerging economic realities

Article Type: Guest editorial From: Journal of Financial Management of Property and Construction, Volume 15, Issue 3

We thank the editors of this long-established and prestigious journal for inviting us to undertake a special issue on public private partnership (PPP). Indeed, we appreciate the dual purpose of this exercise in also serving as a vehicle for disseminating facets of the fast developing “new” knowledge on PPP on behalf of the recently established CIB Task Group TG72 on PPP.

While PPP was the agreed theme, the focus on “Improving Governance and Performance amidst emerging Economic realities” was collectively decided upon at the CIB TG72 meeting in Loughborough, UK in September 2009. This followed discussions on the emerging key issue of “governance” in addition to continuing imperatives for performance which may of course be evaluated differently, in the context of upheavals in the financial and economic landscape in the previous couple of years.

To set the scene, it is pertinent to summarise extracts from the special “Call for Papers” in November 2009: the global economic landscape is still blurred, with governments and financiers still struggling to regroup and re-organise following recent upheavals. The concept of PPP has broadened and its applications have diversified. Many jurisdictions, including different countries within the European Union, are evolving diverse governance structures and thrusts, depending on their perceived socio-economic-legal-political-technological-environmental priorities and capacities. It is time to take stock and compare these trends.

Performance demands and issues will of course remain fundamental to justifying any PPP approach, and improved governance will thus be expected to boost performance against relevant criteria. Of course, performance measures would be multi-faceted, again depending on national/regional scenarios. Governance approaches should thus cater to these priorities as well as the emerging economic realities.

Important issues and lessons learned in the above domains were solicited for development and dissemination in this special issue. As may be expected in any learned journal, all submitted papers did not make it through the refereeing and review process. However, we trust that those authors who did not make it this time, gained something worthwhile from the feedback. We thank the reviewers for giving constructive feedback by putting in substantial effort and time.

Focusing on the five papers that are in this special issue, we thank the authors for their hard work and for meeting our tough timetables. Interestingly, but not surprisingly, given the common theme, the papers complement each other in different ways, e.g. in being studied from different regional bases, hence contexts and perspectives; and in focusing on different aspects of the spotlighted PPP issues.

“A review of Australian PPP governance structures” by the David I. Wilson, Nick Pelham and Colin F. Duffield “partnership” from Australia probes specific governance requirements of PPPs and conceptualises a framework for the structure, resources, communication, reporting and monitoring systems, that as noted, must also align with organisational vision and strategies. Governance principles and needs for PPPs are found to be similar to those in general best governance practice, but differ in some aspects due to PPP characteristics. Three PPP governance models are proposed.

In the “Impact of governance on project delivery of complex NHS PFI/PPP schemes”, M. Patel and H. Robinson study the impact of governance on project delivery in complex PFI/PPP projects of the National Health Service in the UK. Governance is confirmed to be critical in delivering projects as planned. The findings are expected to help public client organisations appreciate imperatives for adequate governance controls against time and cost over-runs, and in ensuring viability and affordability, in such large complex PPP schemes.

Athena Roumboutsos (based in Greece) and Nicola Chiara (based in the USA), adopt a partnership-based strategic partnering approach between the key parties involved. They develop “A strategic partnering framework analysis methodology for public private partnerships”, as indicated in their paper title, based on some current business strategic analysis tools. A module of the methodology is demonstrated in the context of the credit crunch. Findings point to interesting market changes and trends.

In the paper “Social infrastructure partnerships: a firm rock in a storm?”, Tony Gilmour, Ilan Wiesel, Simon Pinnegar and Martin Loosemore answer their own question, by presenting findings from an international literature review and semi-structured interviews with social housing PPP participants in England, the USA and Australia. Distinguishing “social” from other forms of infrastructure PPPs is found to be unhelpful in public housing renewal projects. In case problems arise, commitments to social goals of such projects could lead to contract negotiation rather than default, hence the importance of the detailed contract terms.

Katrin Fischer, Katja Leidel, Alexander Riemann and Hans Wilhelm Alfen propose an “An integrated risk management system (IRMS) for PPP projects”. They report on a study conducted from Germany, using a questionnaire and expert interviews on the current state of PPP risk management. They present a process model for risk management for each stakeholder, in order to develop an IRMS for PPP. They expect this to enable greater transparency, improved data sourcing and distribution of information, and better decision making.

The above papers provide a cross-section of insights into less chartered territories, and could well inspire further explorations of these emerging issues, while sowing seeds for more widespread research in these fertile areas.

Mohan Kumaraswamy, Florence Y.Y. LingGuest Editors