Responsive governance in PPP projects to manage uncertainty

Abstract

Despite the awareness that uncertainty impacts projects with long time horizons, public-private partnership (PPP) research has not extensively examined the operations phase of such projects where interactions between public and private counterparties will be frequent and long-term while subject to a changing environment. Accordingly, two distinct but related investigations examining how governance strategies can address uncertainty in PPP projects are presented. The first identified contractual mechanisms for risk sharing formed during the shaping phase of a broad set of PPP projects; a majority of these mechanisms were strategically designed to address risks as they unfold so counterparty project managers can rely on current information and circumstances during risk resolution. The second explored the emergence of relational mechanisms over time, which revealed that project managers had to consistently adjust established relational approaches to respond to unforeseen events in PPPs. The findings of both studies illustrate the necessity for responsiveness and complementarity of contractual and relational mechanisms in PPPs. Further, the mechanisms uncovered demand project management agility and flexibility as well as improved relational strategies, which is aligned with the emphasis on learning and adaptation in the broader, contemporary project management literature. Consequently, principles from project management 2.0 such as empowering competent project managers and shared global awareness are likely to enhance responsive PPP governance and warrant further exploration.