Louis Gunnigan & David Eaton Why choose this topic? Why this - PowerPoint PPT Presentation

Addressing the Challenges that are Emerging in the Continued Increase in PPP Use in the Republic of Ireland Louis Gunnigan & David Eaton

Why choose this topic? Why this topic? • Topic emerged from PhD research Research Source Context • Vague understanding of existence of Research Process Irish PPP Process challenges The People The Differences • No indigenous research into how these Risk Value challenges came about Innovation Development of True Partnership • PPP programme moving from pilot Progress to date The Way Forward? stage to full implementation Conclusion

Research Source Why this topic? • Literature Review Research Source Context – Government published PPP Guidelines Research Process Irish PPP Process – Reports into PPP introduction in Ireland The People The Differences – Previous research literature on Risk Value organisational culture Innovation Development of True Partnership Progress to date The Way Forward? Conclusion

Context – PPP in Ireland Why this topic? • PPP Pilot programme introduced in Research Source Context 2000 Research Process Irish PPP Process The People • 74 active PPP projects by 2004 The Differences Risk Value • Next phase of PPP programme currently Innovation Development of True Partnership being prepared for release in during Progress to date The Way Forward? 2006 Conclusion

Research Process Why this topic? • Record the current position Research Source Context • Identify the challenges under the Research Process Irish PPP Process headings of Risk, Value and Innovation The People The Differences Risk • Identify the Organisational Culture Value Innovation factors that influence the actions of the Development of True Partnership people involved Progress to date The Way Forward? Conclusion • Establish the means by which each challenge can be met

The Irish PPP Procurement Process Project Identification Why this topic? Research Source PPP TRADITIONAL PROCUREMENT Context Research Process Site Suitability, briefing & site report Irish PPP Process Options Appraisal Outline Sketch Scheme The People The Differences Developed Sketch Scheme Statutory Pre-procurement Risk Process Value Innovation Tender Action & Report Development of True Procurement Partnership Progress to date Post Contract Cost Control The Way Forward? Construction Conclusion Practical completion, handover of building, Final Account Operation Review

The People Why this topic? Research Source The Public Sector The Private Sector Context Research Process Irish PPP Process The People Risk Averse Risk Acceptance The Differences Risk Value Motivated Motivated primarily Innovation Development of True primarily by by actual work but Partnership Progress to date actual work but also by financial The Way Forward? also by rewards Conclusion opportunity for advancement (Houston 2000)

The Differences Public Sector Private Sector Why this topic? Research Source • Importance of • Importance of protection of Context protection of the State the shareholders’ interests Research Process Irish PPP Process • Protection of the • Corporate responsibility The People employees of the State • Risk/Reward relationship The Differences Risk • Political risks of PPP • Personal rewards Value • Personal risks • Lack of understanding of Innovation Development of True • Lack of understanding the public sector Partnership of the private sector Progress to date • Building long-term working The Way Forward? • Use of private sector relationships with public Conclusion consultants in PPP Pilot sector organisations stage

Risk Why this topic? Current CA decides on risk transfer Research Source Status PSO believes risk transfer is excessive Context Research Process No existing mechanism for joint approach to risk Irish PPP Process reduction prior to transfer The People The Differences Outcome Jointly work to identify and reduce risks Risk Required Value Innovation Development of True What can be Develop standard procedures for risk Partnership done reduction Progress to date The Way Forward? Incentivise risk reduction Conclusion Cultural Public sector – risk averse Issues Private sector – accept risk at a price

Value (Time /Cost /Quality) Why this topic? Current Cost is the main issue Research Source Status No mechanism for jointly working to reduce Context overall costs Research Process Irish PPP Process The People Outcome CA and PSO to work together to reduce The Differences Required costs without compromising time or quality Risk Value What can be Open book tendering Innovation Development of True done Stated sum for profit Partnership Progress to date Profit incentive for lower costs The Way Forward? More widespread use of ECI & PIPS Conclusion Cultural Difficulty for CA in working with PSO to Issues increase PSO profits

Innovation Initial output specifications too detailed Why this topic? Current Research Source Restrictions in planning process mitigated Status Context against innovation Research Process Some product enhancing innovation in pilot Irish PPP Process projects The People The Differences Outcome Cost saving innovation Risk Required Product–enhancing innovation Value Innovation Development of True What can be State specification in performance terms Partnership done rather than technical terms, e.g. PIPS, Progress to date PeBBu The Way Forward? Conclusion Cultural Political risk of getting it wrong (CA) Issues Development of understanding of end user needs (PSO)

Development of True Partnership Why this topic? Research Source Context Spirit Research Process Irish PPP Process The People The Differences Risk Cooperation Value Innovation Development of True Partnership Formal Progress to date The Way Forward? Partnership Conclusion Agreement

Progress to Date Why this topic? • Some introduction of ECI but not yet in Research Source Context PPP Research Process Irish PPP Process • Bidding costs becoming a major issue The People The Differences • Risk allocation inequality being openly Risk Value debated Innovation Development of True Partnership • Output specifications moving away from Progress to date The Way Forward? technical description Conclusion

The Way Forward? Why this topic? Potential new contractual approach Research Source Context Research Process Options Appraisal & Partnership Irish PPP Process Spirit Building The People The Differences Procurement and Cooperation Risk Value Building Innovation Development of True Statutory Process & Formal Partnership Progress to date Partnership Agreement The Way Forward? Conclusion Design and Construction Operation Review

Conclusion Why this topic? • Challenges exist in Risk, Value and Research Source Context Innovation Research Process Irish PPP Process • Organisational culture is an issue in The People The Differences addressing the challenges Risk Value • Need to develop true partnership rather Innovation Development of True Partnership than try to change organisational culture Progress to date The Way Forward? in order to take on challenges Conclusion