Keys to Partnership

This chapter identifies the key critical pillars for a successful PPP project implementation in order to assist all stakeholders in the process. It also analyses the potential application models of PPP in respect to ingredients, tools and the roles of ICT. The chapter is based on results from a comprehensive analysis of even cases of successful PPP projects that have been implemented in different countries over the years. As a result several keys for an effective risk management have been identified. This can explain why some PPP projects are successful whereas others are not. It is concluded these key pillars must be dearly considered if PPP project is to succeed.

Risk Management Planning, Sustainability Risks Management, and Risk Stakeholders

Concepts in risk management in PPP projects have continuously evolved over the years. Introduction of new concepts, risk management planning, sustainability risk management and risk stakeholders, create a greater understanding of the acceptable workings of PPP projects. This chapter aims to investigate and compare these concepts in academic literatures and to the practices of PPP project implementations as exemplified in numerous PPP projects. This chapter reviews and analyzes information on these concepts. Extant literatures are reviewed and their take on the concepts are compared with the results obtained from the case studies. The chapter found both similarities and differences and also suggests some interesting researches on several key areas that should be emphasized for a better take in having an effective risk management strategy.

Quests for Public-Private Partnership

This chapter critically reviews seminal literature on PPPs, in order to identify core congruent issues, motif, basics and environment as necessity to answer the quests for quality service delivery so rampant world over. It draws out a number of key themes to better understand why the quest for PPP has turned out to be the ‘driving tone' for all governments, even though successive reports/news prints, have uncovered many challenges in their implementation. Acknowledging that there is no one clear definition, strategy or template for the effective partnering, findings from extant literature highlight principles and critical success factors (CSFs) deemed integral to augmenting PPP performance and success. So, whilst governments invariably conducts their businesses with a smaller ration of strategic partnerships than commonly believed, and accepting private partners dominance has predominantly remained, it is advocated that there is an exigent need to disentangle the PPP initiative through some form of proper risk analysis in the project phases. The case for this is presented through a relationship schema that maps the fabric, reliance and drivers for PPP success.

Risk in a Partnership

Each partner has an enormous obligation in the management of risks in any PPP arrangement. The partner must ensure that concerted efforts are exerted that risks are specifically specified in their natures and where they fall. The partners thus have to comprehensively get to the knowledge of the nature and kind of the risk and where they hit most. Literature review is used to identify all forms of risks in a PPP arrangement, and their effects, and their probable solutions. These are then explored through deeper systematic reviews of case studies of implemented PPP projects and those on-going ones implemented and being implemented in various countries. Risk issues in PPP relate to typology, perspectives of parties and criteria. The findings show that effective identification and comprehension of risk in PPP will increase the likelihood that intended purpose is achieved in PPP especially when the boundaries for risk taking is well established.

Establishing Boundaries for Risk Taking

In this chapter, a model for risk taking tool directed towards and tailored specifically for establishing risk boundaries. The goal of the chapter is to cover the particular threats pertinent to the risk context and provide an interface between the broader philosophy of risk raking frameworks and the risk attitude perception, thus aiding in the successful and secure risk taking. The model incorporates a wide range of factors concerning risk returns and risk responses, assembled into a checklist to ensure properly manageable risks are taken by the parties. It is concluded that this is the starting point for a systematic risk management in PPPs.

Risk Sharing in a Partnership

Risk sharing is an activity which integrates recognition of risk, awareness of a party's capability, risk assessment, and developing strategies to accept and own the risk using managerial resources. Some traditional risk sharing philosophy is focused on taking risk of a lesser costs to the risk taker. Proper risk sharing, on the other hand, focuses on taking and acceptable risk within the capacity of the party to manage. Objective of proper risk sharing is to reduce the possibility the risk taker would not perform the part of the bargain. It may refer to numerous types of measures a partner would undertake to ensure the risk taken does not prevent the partner from performing part of the bargain. The chapter describes the different steps in risk sharing process which methods are used in the different steps, and provides some examples for risk acceptance and risk sharing that can be pursued by a partner.

Risks and Projects Phases

This chapter provides the rational for the importance of developing an effective and efficient replica for risks in PPP arrangement in order to optimize measures to handle them. Various attempts have been made to dig up all the risks in the project phases as an alternative service delivery improvement but to date there has been a lack of proper analogies of risks in the PPP project phases. This is also a lack of clear codification for risk of the project phases in the literature to provide useful benchmark mechanisms to improve a particular phase and to share risk optimally. The aim of this chapter is to develop a conceptual replica to comprehend risks in the project phases, and to determine means to advance risk-free PPP project phase. The different case studies will be examined in an effort to simplify the tasks of creating a risk-free PPP projects. In unearthing the melodrama in handling risks in PPP project phases, it is concluded that there is a lack of proper risk sharing formula that make most PPP projects to fail and a lack of emphasis in designing a less risk prone PPP projects.

Paradox of Service Delivery

This chapter reviews the literature on the paradox of services as a cause for the necessity of PPP. First, the chapter discusses why governments pursue PPPs form the perspectives of both the private and public and how this has brought about the urge for PPPs throughout the world. Second, the chapter reviews the principles of PPP from a current development and management perspectives. Three core elements are crucial for PPP to thrive, and these are finance, skills of the private sector and risk sharing are reviewed. This chapter analyses papers, case-studies and reports concerning the challenge of service delivery provision in the current and concludes that, from a practical perspectives, it is proper that governments ought to rethink their mode of service delivery provision, and that PPP seems to be the right answer in the scenario.

Risk Management Framework

This chapter examines the adoption of a formal risk management strategy framework in a PPP arrangement. The chapter shows the relevance of risk management as an PPP project management tool. The chapter also reveals how the use of risk management is dependent on relational skills, knowledge of the PPP project activities and experience. Risk management can therefore be seen as both a context-dependent devices and as a technique abstracted from the context. The paper discusses how managing risk can be dealt with in risk's complexity, addressing the expectation of multiple PPP actors and external stakeholders. It is concluded that a good risk management framework must be derived from the risk fundamentals through a clear processes and above all be monitored on a regular basis. This requires proper planning to ensure sustainability of the framework with an inclusion of the varied stakeholders.