What capabilities do we have in house to deliver and/ or manage the project?
In what areas of project delivery does the public sector project sponsor excel: design, operations, maintenance, financing? What capabilities are present in the market? For example, if a government excels at road maintenance but is weak on construction (cost or timing), it might decide to bear responsibility for long-term asset condition, but allow a private partner to add value at the front end of the project.
The same goes for management. Large capital projects are complex and require a great deal of experience to manage successfully. Partnerships add another layer of complexity, and institutional capacity building must be a core element of any PPP program. Effective project management is essential to limit risk and cost overruns and streamline delivery, so the presence of competent staff is of particular importance when funding is tight. The need for strong project management may necessitate training or shifts in internal staff. It may also mean that certain projects are not worthy of pursuit in light of the associated risks.