Organization of public-private partnership projects: The timely prevention of pitfalls

Abstract

Public-private partnership (PPP) projects are a special type of project which has lately become of increasing interest to both the public and the private sectors. For such projects (e.g. a bridge, tunnel or industrial area), both sectors are the joint principals. Owing to the fact that these joint partners often have conflicting interests, the organization of this type of project requires special attention. This conclusion was reached after analysis of both the project-management issues and several PPP projects in the Netherlands. To avoid pitfalls during the execution phase of a PPP project, more attention should be paid during the preparation phase to the causes of these pitfalls. Lessons learned on this subject from other types of projects must be put to use. A PPP project also requires a specific organization structure so that the conflicts of interest can be managed. The structure should focus on the constraints and on one common (agreed-upon and accepted down to the last detail) goal. The paper analyses the causes and effects of the problems which arise (pitfalls) when PPP projects are organized and managed. A number of practical recommendations are made to prevent the pitfalls identified. The necessity and importance of PPP projects are not explicitly discussed.