Public private partnerships: Achieving better value-for-money operational phase outcomes through improved partnership, risk and performance management practices

Under Public Private Partnership (PPP) arrangements, real benefits, in terms of value-for-money outcomes, are expected to flow to communities. The public sector partner is ultimately responsible for ensuring that contracted services provided by private consortia are carried out and that specified delivery standards are met. Contracts, however, do not protect governments from every adverse eventuality. Partnerships involve managing social interactions between people in administering contractual provisions. Not all operational risks can be transferred to consortia; governments should actively manage their risk positions. Governments should take necessary and timely action to resolve service provider under-performance whenever it occurs. Using literature review, and adopting a public sector perspective, a range of partnership, risk and performance management issues are identified that may affect the achievement of value-for-money PPP operational outcomes. These issues are developed into a generic conceptual integrating model intended to assist government decision-makers to allocate and make better use of public sector resources during the operational phase of PPP projects.