The Growing Advantages of Public-Private Partnerships and Their Pain Points
The Pain Points
Public-Private Partnerships have been a cult change of business models these days, especially in nations such as the United States of America, which has adapted the technique for various public-based infrastructure construction and maintenance projects. When operated correctly, the results have been successful as the overall implementation and delivery are fast and efficient.
The USA, for its part, has shockingly seen itself placed behind nations like the UK, Singapore, and Germany in terms of overall infrastructure development. With the aging infrastructure within the USA, the cumulative need is estimated to touch 3.5 trillion USD by 2020. This is where the P3 model comes into play and helps to curtail the financial gaps needed for the solution. A recent study conducted by Syracuse University predicts the federal budget would increase immensely without P3 coming to the rescue.
Pain Points of the P3 Model
The Public sector for its part faces eight main hurdles that stall the efficiency overall. P3 has a solution for these issues.
Weak Strategy and Alignment Issues
This is one condition where the planning is weak and may have negative consequences on implementation. Public-Private Partnership models can offer reassurance by providing more risk-free mechanisms, opportunities for high-quality planning, and maintaining transparency while working.
Vague Accountability
Decision-making is a vital part of the implementation. With P3 models, negotiation and working relationships become more practical and eliminate unchecked questionable decisions.
Commitment Issues from the Delivery Team
One of the persistent issues in projects is the lack of commitment shown by the delivery team. Where often time governments lack the mechanisms to incentivize or push delivery of the project, a private entity can push for completion. With the P3 model, the private parties will adopt a stricter yet rewarding means to eliminate foot-dragging.
Disciplinary Issues
Major infrastructure projects from the public sector suffer numerous operational and management hurdles. With the P3 model, discipline and timely delivery are more easily tracked and enforced, making the model more viable.
Poor Optimization of Features
P3 systems help in resolving the issues of proper optimization of resources and features. This is done by adapting to newer technology and doing feasibility research ahead of time which is more commonly achievable with private partners.
Cost Issues
The traditional public project model often awards contracts to the lowest bidding organization, not recognizing the quality and competency aspects that cost a project time and efficiency in the long term. Under the PPP model, the bidding can be optimized between both the parties so that higher quality bids are feasible.
Improper Resource Implementing
Resource implementation is a major issue in project delivery. P3 model can ensure delivering proper resource without wasting funds or time.
Poor Control
Poor Control does a lot more damage than we can contemplate. P3 models provide for project-wide systems and resources oversight, making control feasible and effective during the project.
Conclusion
P3 is a tried and tested method, incorporating plan-specified outcomes. With more public sector projects collaborating with private bodies, the overall efficiency remains top-notch, and an optimal outcome is able to be achieved.
Interested in more P3 insights? Check out some of our other blogs on The History of the P3 Market and What's Next and the Top 5 ways to Align Vision of a PPP. If you want to learn more about how we develop effective strategies for public-private partnerships, reach out to us today to start a conversation.
