Generally, delivering projects to budget and schedule as well as producing quality outcomes (Hatush and Skitmore 1997; Chua, Kog and Loh 1999) are major project goals. The capability (Chua, Kog and Loh 1999) and expertise (Forrer et al 2010; Chua, Kog and Loh 1999) of staff representing both the public and private partners is therefore important in delivering PPP VfM outcomes over the concession period. Speaking about the public sector, Abidi (in Ernst & Young 2008: p.12) argues:
"The public [partner] needs to closely monitor operations and services delivery. Projects do not run on auto-pilot. The public [partner] needs to invest resources in appropriate contract management if projects are to be successful."
A lack of staff capability or expertise (Hope 2012) can lead to tensions between public and private partners, and if not remedied, could lead to service delivery under-performance. While it is easy to blame service operators when delivery outputs fail to meet minimum standards, it may not be reasonable to do so, particularly if public partner staff tasked with contract oversight do not fulfil their responsibilities properly. The quality of public partner contract management skills including monitoring performance targets should be improved if governments are to achieve VfM outcomes (Edwards et al 2004: p.63). This view is shared by the Organisation for Economic Co-operation and Development (2007: p.20) which also claims that appropriate corporate experience among government employees is in short supply. A lack of understanding of commercial principles and practices may make it difficult for public partner contract managers to understand the nuances of the issues faced by their private partner and why certain decisions have been taken that lead to particular outcomes. A lack of understanding could lead to 'unfair' penalties being applied by the public partner (in the view of service operators) and could damage relationships between them. Moreover, poor co-ordination and a lack of skill are factors that can impact negatively on the public partner's ability to successfully manage PPP outcomes (Yuan et al 2009).
Evans & Peck (in Parliament of Victoria Public Accounts and Estimates Committee 2012: p.47) state that decisions taken by government regarding what level of specialist skills and competencies should be retained by its staff and outsourced to the private sector is a significant and strategic decision "that strikes at the heart of the role of government and what can be delegated". In the view of Evans & Peck (in Parliament of Victoria Public Accounts and Estimates Committee 2012: p.45-46), pre-requisite public partner skills and competencies that may be necessary for major infrastructure projects during operating phases are presented in Table 4.1 below.
Table 4.1 Definition of Best Practice Skills and Competencies Required for the Operational Phase of Infrastructure Projects (Source: Evans and Peck in Parliament of Victoria Public Accounts and Estimates Committee 2012).
Project Activity | Work | Essential Competencies & Skills |
Contract management | - Monitor and review contract performance - Report on contract performance - Manage contractor program delivery - Identify and resolving obstacles that could inhibit performance of the contractors - Identify trends or recurring issues which should be communicated to the whole of program - Identify process or policy changes that would assist program progress - Provide monitoring and reporting of Program progress as required - Ensure VfM is achieved | - Demonstrated understanding of industry environment - Contract management skills - Hands on experience in management of significant contractor delivered projects (~10-15 years' experience) - Good communication skills - Good stakeholder engagement and management skills - Strong analytical skills - Demonstrated strong commercial and contractual skills - Strong negotiation skills - Demonstrated understanding of procurement policies and requirements - Strong project management skills - Strong reporting capability |
Controls | - Document control and information management - Management of change and the management of change system - Monitor, consolidate and report integrated budget and schedule, progress and gaps - Ensure compliance and optimised operation of established project policies, systems and management standards - Implementing established quality strategy, plan, procedures and auditing | - Professional qualifications in a relevant discipline - Deep expertise in quality planning, assurance and control - Expert knowledge in project planning, scheduling and costing - Earned value analysis and reporting - Strong information analysis and reporting skills - Good communication, negotiation and advisory skills |
Evaluation of performance - services provided - investment | - Identify and capture lessons learned against approved business case objectives - Recommend necessary improvements | - Demonstrated understanding of industry environment - Strong communication and stakeholder engagement skills - Sufficiency of knowledge and awareness of the portfolio and service to be able to assess effectiveness of outcomes - Sufficient commercial and contractual knowledge to assess effectiveness of outcomes - Strong analytical skills |