Relationship management in public private partnership infrastructure projects

Abstract

Public Private Partnership (PPP) procurement has developed in many countries, as an

effective way for governments to allay their financial burden and/or improve the

efficiencies of public services. However, PPP has also experienced many ups and

downs in its applications. As a collaborative venture between public and private

sectors, the quality of the relationship between them has been shown to be a key

contributor to the success of a PPP project. However, no study has, as yet,

conceptualized and tested an integrative framework for modeling and addressing the

relational aspect in PPP projects. This study aims to fill this gap. Moreover, the

revamping of PPP in the above direction, would align with what is found to be a much

larger trend, in moving from traditional management to relationship approaches in

project management in general and on built infrastructure projects in particular. The

general purpose of this study is to make an original contribution to relationship

research in PPP, by addressing the importance of this intangible side of PPP, through

developing a strategic relationship management framework for parties engaged in PPP

projects.

Having examined relational research in joint ventures, alliancing and

inter-organisational collaboration, it is found that game theory, transaction cost

analysis and relational contracting have a direct bearing on inter-organisational

relationships in infrastructure projects. Consequently, they are adopted as the

theoretical foundations for this research. This study first investigates the ‘hard side’ of

PPP relationships, analyzing their variables based on semi-structured interviews with

PPP experts. Further, the ‘soft side’ of PPP relationships, is found to be influenced

mainly by inter-organisational trust and commitment. This is also investigated in this

research by intensive literature review of inter-organisational relationships. A

relational variables and indicators model for PPP projects is then developed.

Quantitative research data was collected from two questionnaire surveys, targeting

international experiences. The first survey was aimed to examine the intensifying

and/or moderating effects of various relational variables. The second survey was

designed to identify the Critical Success Factors of relationship management in PPP

context. Qualitative research data was consolidated from a case study and follow-up

structured interviews. Findings from surveys, case study and interviews were then

triangulated to develop a strategic framework for better relationship management for

infrastructure PPP projects.

The findings from this research make a specific contribution to relationship

management research; while the ‘hard’ and ‘soft’ sides provide lenses for both PPP

parties to examine their relationship with their respective partners. The proposed

strategic framework consists of a Relationship Management Scheme and Guidelines

to be implemented in different PPP phases, through addressing the sustainability of

the relationship. It provides an initial scheme or base approach for project parties to

manage the relationships proactively rather than reactively. Besides, this research also

helps to identify relevant relational components that can be incorporated or directly

used in criteria for pre-tender selection. Such screening and special attention to these

critical components can also help to develop more sustainable relationships and attain

better value for money through PPP procurement in practice.