Making public private partnerships effective for infrastructure projects: role of governance and knowledge transfer
2013-01-02T11:15:10Z (GMT) by
Governments worldwide are experiencing significant challenges as public resources are insufficient to meet the increasing demand to rehabilitate or build new economic and social infrastructure necessary to facilitate and sustain economic growth. As a result, there has been a growing and intense debate about the respective roles of the public and private sectors in the delivery of infrastructure for transport, health, education and other sectors. Many countries in Europe have recognised the importance of the private sector in the delivery of traditional public services with UK as the market leader accounting for a significant proportion of European PPP projects. There is growing evidence that the use of PPP is spreading in Europe due to recent enabling legislation in countries such as France, Ireland, Germany, Greece and the Czech Republic. The market for PFI/PPP is predicted to rise worldwide as there are also growing opportunities in USA, Australia, New Zealand, Canada, the emerging markets and many developing and middle income countries. With this potential rise it becomes important to remember that good governance and knowledge management is critical for the success of PPP projects. This article discusses two fundamental aspects of PPP focusing on governance and knowledge management which affects the financial performance of projects. First, the principles of governance are examined to show how it affects processes, decision-makers and the population. For PPP projects, the governance agenda involves controlling, managing, and influencing the deployment of financial, staff and physical resources in an effective and fiscally affordable way. Governance such as financial accountability processes, value for money processes, and the appraisal and evaluation processes are central to the success of PPP projects. This article focuses on the management aspect of governance as it has a significant influence on financial and economic outcomes of PFI/PP schemes, but it is often overlooked or not addressed adequately. Second, it is important to recognise the role of knowledge management in accelerating learning to develop expertise and improve processes affecting planning and design development, construction and operational aspects of PPP projects. Knowledge transfer and knowledge management tools such as post-project reviews facilitate the consolidation of learning and, to some extent, create a shared understanding on a project.