As PPPs typically involve a vast array of interconnecting relationships, the Procuring Authority should map and define all relevant stakeholders from very early on in the process. There are a few key groups: the Project Company and its associated private partners (equity investors, lenders, contractors); end-users; businesses and the community; and other government agencies. Additional third parties should also be considered, such as private operators of interfacing projects, independent regulators, utility providers, insurers and advisors.
The relationship between the Procuring Authority and the Project Company is key to the success of a PPP. A collaborative relationship helps the parties ultimately achieve ‘win-win’ solutions, while a breakdown in relationship can amplify disputes and threaten the ongoing viability of the project.
External stakeholders, such as members of the public or end-users of the service, need to be engaged and managed by both the Procuring Authority and the Project Company. These stakeholders can include different members of the public and end-users, such as communities, developers, local businesses, utilities providers and other interest groups. Infrastructure projects have the potential to cause disruption to these groups, and if relationships are not managed properly they may create opposition to the project and cause serious and costly delays, as well as underutilisation of the infrastructure.
Another key group of stakeholders that the Procuring Authority must consider are other government departments. For example, approvals will generally be required from the ministry of finance (or equivalent). Other bodies will be relevant: PPP units, bodies that regulate the provision of services (such as power), planning and environmental regulators, health and safety regulators, etc. The Procuring Authority will need to ensure good relationships are maintained with all relevant government bodies.
Example – different stakeholders
The stakeholders in PPPs can be very diverse, depending on the project and sector.
On the Queen Alia International Airport Expansion project in Jordan, as with all airports, the users of the facilities are members of the public, retailers, and airlines. All of these groups have different views and need to be engaged with in distinct ways.
For more information, see the Queen Alia International Airport Expansion Case Study.
Effective communication is imperative to maintain a positive relationship between the parties to the PPP contract and with third party stakeholders, working towards shared benefits. The Procuring Authority should establish a communication strategy and plan from day one. The Procuring Authority should design and implement a communication strategy to address communication requirements with all relevant project stakeholders. This is important across all stages of a project.
The Procuring Authority should define:
The communication strategy should include an awareness campaign, regular progress updates, mitigation measures for any issues affecting end-users and/or the community, crisis communication procedures, clear protocols for responding to queries from the public and media enquiries and a dedicated website for disseminating key controlled messages.
It is also important that communication within the Procuring Authority team takes place regularly. The senior management team should be aware of the state of the relationship between the contract management personnel and their counterparts, and the messaging at all levels should be consistent.
Example – Communication over a large area
A project in North America involved work on 20 separate sites, which were spread over a large geographical area. Communication between the different teams was vital to avoiding disagreements escalating into disputes.
While verbal communication is useful in avoiding excessive formality, it is important that these exchanges are well documented to avoid confusion. This can be done by recording and sharing key action points agreed upon in informal discussions and sharing and agreeing on the minutes which are taken during formal meetings. Preparing high quality minutes is particularly important to accurately reflect the spirit of the agreements made and help to bind the relevant participants to their commitments. Information management is detailed in Section 3.4 (Information management).
View our list of previous questions and answers or submit a question to our PPP Contract Management team.