Five Pillars for Public-Private Partnership (PPP) Resilience

A Changing PPP World 

The last 12 months have tested the resolve of PPP practitioners globally and changed perceptions of PPPs.  Challenges to project implementation and O&M have shown how vulnerable projects are to the unexpected and unforeseen.  As a result, practitioners have been questioning whether PPPs are resilient and what can be done to mitigate and strengthen sustainability of PPP projects against the ongoing impacts of the catastrophic adverse events such as Covid-Pandemic, climate challenges and unknown ‘Black Swan” events in the future.

Building Resilience and Sustainability into PPP Projects

Working groups at the UNECE PPP Center of Excellence in Geneva; the World Association of PPP Units and Professionals (WAPPP); and the International Sustainability Resilience Center (ISRC) have had ongoing collaborative discussions over the last few years on how resilience and sustainability can be built into current and future project design, planning and implementation.

A new concept that has evolved in this best practice collaborative debate is an approach to PPPs, called “People first PPPPs” (PfPPPs) which examines how sustainable and resilient PPPs can be used to elevate PPPs as true instruments of economic development and as a path to countries realizing their sustainable development goals.  This is particularly important as countries recalibrate their economic priorities during pandemic recovery phase.  PfPPPs call for a robust  focus on environmentally sensitive PPPs that emphasize people as the focus of PPPs.  Unfortunately, although this focus is professed to be supported by PPP project proponents, it is often the narrow myopic focus on Value for Money (VfM) assessments that drives PPP decision making.  PfPPPs hope to rectify this by calling for additional focuses that leverage VfM assessments – a focus on Value for People (VfP) and a Value for the Future (VfF).  

Ensuring Comprehensive Project Resilience and Sustainability

Before practitioners dismiss this approach, it is critically important to understand that PfPPPs do not call for the replacement of VfM, but are calling for additional assessment considerations - that will ensure project sustainability and resilience for the future  - when visioning, planning, and implementing PPPs. This is in effect, an expanded strategy to mitigate future impacts to PPPs and ensure they are more resilient than current PPPs which have been shown to be extremely vulnerable to unpredictable adverse events of enormous scale, such as the global pandemic. 

What Do We Mean by Resilience?

It is fine to call for sustainable and resilient PPPs, but what do we mean when we talk about resilience.  At the ISRC we have a laser focus on exploring effective resilience strategies as they pertain to PPPs.  Recently I read a book on climate resilience  - “Climate Resilient Urban Area – Governance, design and development in coastal delta cities” edited by Rutger de Graaf-van Dinther (published by Palgrave MacMillan – ISSN 2523-8124) that discusses the concept of “five Pillars of Climate Resilience.” In Chapter One, the following paraphrased observational comments were made by the authors – 

• “Increasingly, the concepts of resilience and vulnerability are associated with cities’ efforts to respond to, and to prepare for climate change.
• In the last decades, the concept of resilience has been applied in a wide range of disciplines including economics, psychology, social sciences, natural hazards, and engineering.
• The impact of climate change on urban areas has been so sizeable ….. that a proactive transformation has become a necessity.
• Transformative capacity relates to our ability to transform socio-ecological systems trajectories towards ecosystem stewardships.
• The processes of transformative capacity are participatory and co-creative.
• Through identifying and implementing catalyzing interventions, our physical systems can leapfrog  towards a progressive state of resilience.
• These interventions can be scaled up and replicated for progressive resilience impact.” 

Personal observations of the state of PPP implementation over the last 12 months, vis-à-vis the need for a renewed approach using PfPPPs are closely aligned with those listed above  They include the following take-aways - 

• The concepts of resilience and vulnerability should be associated with efforts to respond to better prepare PPPs for adverse events.
• PPP practitioners should be implementing the concepts of resilience and vulnerability to prepare projects for adverse events.  The concept of resilience should be applied as vigorously as it is being applied by other  disciplines (many of which form the foundation stones of PPPs).  The pandemic (and recently forgotten catastrophic adverse natural events) should impress upon ourselves that proactive transformation of PPP practice is a necessity. 
• The impact of adverse natural events on PPPs has been so sizeable (so much so) that a proactive transformational approach has become a necessity.
• Transformative capacity should relate to strategies that embrace sustainability and reliance stewardship.
• Transformation of PPP practice should  be participatory and co-creative.
• Identifying and implementing catalyzing mitigation interventions, can leapfrog PPPs towards a progressive state of resilience
• Interventions should be scaled up and replicated for progressive and cumulative resilience impacts.

Adapting and Adopting the Five Pillar of Climate Resilience to and for PPPs

In their book, De Graaf-van Dinther and Ovink describe the “Five Pillars of Climate Resilience,” which could clearly be adapted as “Five Pillars of PPP Resilience for PPP implementation,” especially when holistic resilience is considered for project the visioning and design, construction, financing, and operations and maintenance.  These project life-cycle phases should be cumulatively integrated when resilience is considered.  The five pillars of resilience - introduced by De Graaf-van Dinther and Ovink include - threshold capacity; coping capacity; recovery capacity; adaptive capacity; and transformative capacity.

These five pillars can be implemented with minor revision to PPPs when they are implemented as PfPPPs. Recommendations based on De Graaf-van Dinther and Ovink ideas include the following – 

• Threshold Capacity – This should include PPP planners preparing and building thresholds of variation to prevent project structural damage through risk management.  The construction and operation of PPPs  - to maintain threshold capacity - is dependent on environmental resources and social, institutional, technical, and economic activities.  These resources should be mobilized by PPP proponents if they are not available. This will be critically important for the implementation of PPPs in a post pandemic world as future proofing is considered.
• Coping Capacity – it is important that capacity to reduce damage from an adverse event that exceeds a damage threshold to PPP projects exists.  This includes effective emergency and mitigation plans, improved communication to create project risk awareness, a clear project organizational structure, and dedicated responsibility for adverse event management.   This cannot occur if there is no early warning system instruments that can preempt surprises. It is also important that project damage reduction is instantaneous and does not lag.  Unfortunately, the pandemic has shown that both the public and private sectors had limited coping capabilities and that responses lagged. This needs to be rectified.
• Recovery Capacity – This refers to the project’s ability to quickly recover to a project state that is the equivalent or better than before the event.  Contractually, this might be difficult in a PPP, but if there is a strong intent to mitigate repetitive event impacts, it is important that this be considered.  Improved recovery is tied to project team ability and knowledge  of past events. Therefore, it is important that future risk standards and vulnerability assessments are integrated into PPP project management.  Because recover can take a long time, it is also important that short-, medium-, and long-term goals and objectives form part of the recovery capacity strategy. It is advisable that public and private partners in PPPs also consider who is responsible for what and ensure that insurance companies are on-board with risk allocation, otherwise no-one could be held responsible. Unfortunately, the pandemic has pointed out that this pillar needs considerable attention.
• Adaptive Capacity – This is related to a project team’s capacity to anticipate the unanticipated threats to projects in the future. Present conditions can and do change constantly change for PPP projects.  It is therefore important that project managers do not focus only of the present contractual terms of reference, but also build adaptive capacity by anticipating uncertainty based on the adoption of precautionary practices. This also means avoiding technical project lockdowns, by being receptive to future new technologies and innovations that can enhance adaptive capacity. Mitigation of technological obsolescence should be a standard adaptive approach to PPP projects – especially in projects that support digital infrastructure.  Additionally,  project insurance terms should be adaptive so that lessons learned in the pandemic can implemented. 
• Transformative Capacity – This relates to the ability of a project management team to transform the way it operates when faced with future expected catastrophic developments.  While adaptation is associated with small step incremental changes, transformation should be focused on transforming the current management approach through proactive and collaborative innovation in the long-term This includes deliberately harnessing stakeholder’s ideas, building trust, improving willingness to implement new strategies, and enhancing awareness of the systematic management changes being proposed.  This approach will also  allow a wider circle of formal project partners and stakeholders to link proposed transformative changes to their own agendas and thereby increase their willingness to adopt them as their own. This cannot take place in a vacuum and will require resources and systematic tools that are supported by policy and implementation guidelines.  Unfortunately, the pandemic has shown that in many instances PPP partners have not embraced transformative approaches and have stuck with their own existing agendas, thereby incapacitating project resilience.

Conclusion

The five pillars of climate resilience are applicable to PPPs and can serve as an interesting approach to the successful adoption of PfPPPs.  What is certain is that we cannot continue to implement PPPs as we have to date.  We need to improve PPPs all the time. We need to become stewards of change. Many current practices that ignore innovative best practices that can protect people from projects destined to failure in a rapidly changing world need to be revisited.