3 Ways Governments Can Build Successful P3 Projects
P3, PPP, or Public-Private Partnership is a collaboration between a private sector company and a government agency, boosting the financial strength of the state partner. Such collaborations are established to operate certain projects like entertainment districts, parks, transportation systems, convention centers, bridges, and much more. In many cases when a P3 finances such a project, it can be accomplished faster and in a more resource-efficient manner than if done strictly with public means.
In many countries, like India, Egypt, Columbia, and Turkey, the P3 market is quite strong and partnerships are regularly and effectively used to get quality results. The public partner gets the benefit of greater efficiency and feasibility of their project. However, there are other countries where these partnership models are not quite as established. Here are the best ways governments can establish initiatives to form strong partnerships that work for the benefit of the country or state.
1. Political Will
In many countries, the partnership between a private sector and a public organization is not particularly familiar. Most people recognize that there is a clear separation between public and private. The idea of such a partnership is still so alien that without strong political support, it is difficult to set a strong partnership that will work for the country. In such a case, if any firms want to establish a strong public-private partnership, they must work from the top-down, starting with the president or prime minister on federal projects and governors on state-level projects. These firms often find ways to leverage their risk through a P3 than the traditional way of work where they take on the responsibilities of construction, financing, and operation.
2. Technical Teams
Besides political support, an active P3 can only be established when the government comes up with a strong technical team. This team studies the market thoroughly, understands all aspects of it, knows the potential partners, their limitations and requirements, and above all, the consistency and precision of the project. Without the right team that is doing the leg work, the project will never get off the ground.
3. Institutions and Governance
Often, there are complaints against government agencies relating to delays in completing these sorts of projects. Building a high-quality P3 will take time, effort, and money, but it will be worth it. Establishing a solid P3 will make sure all these efforts and time are justified to create a better project and there is shared responsibility and accountability amongst the stakeholders.
Countries, which are still not making strong PPP’s can concentrate on these three initial steps for the government to take the initiative. All these pillars have to be equally strong to establish a successful PPP; if not, the framework will be compromised.
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.
