Developing PPP Project Management Skills

On Monday the 7th of March, 2016 the Institute for Public Private Partnerships (IP3) started its annual training cycle for PPP practitioners. The March classes have drawn attendees from a wide variety of countries including the UK, the Philippines, Saudi Arabia, Belize, and Kenya to name a few.

All class attendees have signed up to learn skills that will help them become better PPP practitioners. Their employers in many instances have acknowledged that they need to improve their institutional capacity through investing in comprehensive training programs for their often novice PPP practitioners if they hope to deliver successful PPP projects.

During a number of tea breaks I discussed what it takes to be a successful PPP practitioner with attendees. Many organizations have different needs, but there are fundamental skills that future and present PPP managers should focus on and strive to develop.

Listed below are my observations on some fundamentals that I feel should form the skills foundation of PPP managers and practitioners working at building their personal toolbox of skills. They include the following:

• Understanding the basic economic assumptions driving the project. It is sadly more common than not, that managers have a stove-piped focus on the projects that they are managing, often driven by their professional background that might have not prepared them to understand cash flow issues and the amount of project debt that should drive every management decision they make. It is important that managers aim to understand the fundamentals that drive the economic assumptions of the projects that they are managing.
• Understanding that the project partnership has been structured to achieve the objectives of both the public and private sectors. It is often challenging for the PPP project mangers (both the private and public sector managers) to adhere to contractually agreed to project objectives that optimize cost, quality, and investor returns. They need to have a management approach that embraces both the needs of the public and private sector partners.
• Managing political interference. Many PPP project managers do not have the personal skills, willingness, or authority to manage political interference. It takes time to develop these skill sets and often it is only senior, well-respected practitioners that have developed these skills organically over time. It is important that senior managers groom future managers in the skills needed to run the gauntlet of political interference in a way that the project objectives are not changed at will.
• Managing partners and stakeholders. Often managers confuse partner management with stakeholder management. Partners should not be confused with stakeholders. Partners represent parties that have a contractually vested interest in the project. Stakeholders have an outsider’s interest in the project (i.e. politicians, citizen’s groups, NGOs etc.). It takes acutely developed diplomatic skills to manage these two parties separately when needed, and to bring them together when it is expedient. Management of partners is often easier as the “engagement rules” are often clearly stated in well-written PPP contracts. Management of stakeholders is more difficult as the concerns of stakeholders are often not in harmony with the objectives of the contract between the public and private sector partners. It is important that at all times, management decisions are transparent and well articulated so that project concerns and misconceptions can be mitigated immediately.
• Managing social and environmental impacts. Social and environmental impacts often sink projects if they are not clearly identified in the project planning stage, or mitigated immediately upon occurrence. Managers need to develop a professional sympathetic empathy towards social and environmental impacts. This is not an easy skill set, as outside influencers may often try to introduce a gung-ho approach to unexpected impacts so as to avoid project changes that will delay projects or cost the investors money. It does take a seasoned project manager to stand up to those who would unethically minimize mitigation actions that are needed.
• Understanding the regulatory environment. Often managers do not understand the “legal rights” that they have under well-established enabling regulatory environments. It they do, with the support of legal council, they are better equipped to resist frivolous outside interference (from less vested stakeholders) they might try, for example, to change tariff agreements, that can then destabilize projects and seriously undermine their sustainability.
• Following a disciplined approach to projects. The longer a project lasts, the more likely that project managers might become less disciplined in their decisions and management actions that continue to ensure that project timelines are met and that all partners are held accountable for. If one considers that large infrastructure PPP contracts might last 50+ years, it becomes important that managers constantly revisit their management goals and update their skills. It is also critical that on really long projects, that current managers train their successors to perform with the same level of expertise, project knowledge, and rigor that they were mandated to follow when they started the project.
• Learning to work with domestic and international expertise. Large and complex infrastructure projects are often staffed with a mixture of domestic and international technical experts. This requires project managers to be skilled enough to manage cultural and technical challenges that occur. In emerging economies, there also might be an inherent domestic bias in a public sector institutional partner towards their international private sector partner. If this is not addressed by a skilled PPP manager, who ironically might be an expatriate manager, the project could face difficulties.
• Planning, reviewing, and constantly monitoring of projects. Projects need constant recalibration, especially long -term projects. This requires dexterity and flexibility from project managers who need to be able to plan and manage project monitoring strategies that are proactive in their approach to ensuring that project goals are met at all time. For very large projects this requires project managers that exhibit inclusive leadership skills that embrace a supporting team of managers to whom they can effectively delegate responsibility to when appropriate.
• Developing and understating of project risk. It is critical to understand risk in PPP projects and to be ready to mitigate it immediately. This means that managers need to constantly manage risk using tools such as risk and impact matrices. A good manager will also train his team to understand the importance of reporting risk and addressing it expediently.
• Embracing joint working. No project manager operates in a vacuum and no project manager is larger than the project. Project managers need to develop networks of internal and external collaborators that will enhance and advance the goals of the project. This approach will preempt failure and ensure the emergence of a resilient PPP team that will ensure that the project remains sustainable.

This list is not meant to be comprehensive. Becoming an effective PPP project manager requires unique skills sets that include being a politician, economist, technical expert, teacher, a policeman, and even more. These skills are only developed in an environment that embraces professional development, which rewards good PPP practitioners, and which empowers decision-making. Effective PPP managers are always learning new skills and realize that it takes many years to develop management and leadership skills. It may seem daunting, but there is no reason not to immediately start acquiring those skill sets.

 If you are interested in PPPs please feel free to contact me at [email protected].