Public Private Partnerships is a concept which is becoming more prevalent every day.
I recently received my quarterly copy of Strategic Alliance, the magazine of the Association of Strategic Alliance Professionals (ASAP), a fine organization of which I am a member. The magazine is a great source of news for alliances professionals, and on page p.37 of the most recent issue the title reads, “Alliances That Could Save the World.”
Public Private Partnerships, hyperbole aside, are indeed a wonderful approach to complex, long-term problem solving. Big issues like health care, education, energy, water and the environment all involve a dynamic relationship between public and private involvement. All forms of collaboration – financial and human capital – are required and alliance management skills are essential to the success of Public Private Partnerships.
One of the leading countries in the world in for Public Private Partnership (PPP) development is The Netherlands. Typically, there is a tripod PPP solution managed by consultants who form one leg of the stool. The other two legs are institutions within the not-for-public sector and the for-profit private companies. The respective roles and responsibilities are often structured as follows:
- Public interest – typically several not-for-profit and educational institutions will represent the ‘public’ leg of the stool, such as regional and national (and increasingly international) government departments, research centers, universities, expert volunteers…
- Private interest – typically for-profit firms who are willing and able to invest in major, long-term projects, such as construction and energy companies, major infrastructure firms, large and cash rich international life sciences and technology corporations…
- Consultants – typically a mixed bag of professional service providers and contractors working for one of the other legs of the tripod, e.g. PSOs of the large corporations or not-for-profit consultants, or other more traditional and specialized consulting firms…
In all cases, progress for designing, contracting and then implementing a PPP is usually quite slow, the return-on-investment is very long and the fee structures are less than what the for-profit players are used to in their main activities. But there is tremendous potential to indeed “save the world” by uniting a long-term global vision provided by the public leg, the resources and expertise provided by the private leg and the governance and project management provided by the consultants.
Today, in spite of all the imperfections, the way the Dutch have implemented PPP solutions in their regions, and within their public private institutions (rail, post, airports, administrations, energy & utilities, etc.), is largely exemplary of the benefit derived from Public Private Partnerships.
The Dutch term ‘polderen’ comes from the ‘polder model’ to describe this specific version of consensus-based economic and social policy making process. It is described with loosely translated phrases like “a pragmatic recognition of pluriformity” and “cooperation despite differences”. The term has unfortunately undergone a recent transformation to signify a slow and indecisive decision-making process.
But a fascinating glimpse of history reminds us that Dutch polders are at risk from flooding at all times and care must be taken to protect the surrounding dikes. Dikes are mostly built using locally available materials and each has its own risk factor. Water bodies hold separate elections, levy taxes and function independently from other government bodies. Their function is basically unchanged even today. As such they are the oldest democratic institution in the country.
This necessary cooperation between all ranks in maintaining polder integrity (where to build the levees, how much to charge, how to operate and maintain…) involved some intense public-private partnership discussions. One can easily image the colliding of short term and long term interests among the local villagers whose land is under sea level, as these important discussions and decision are being made. This centuries old tradition of working out PPP issues has in fact served this European nation well. Non-agreement would be devastating, and is not an option.
Public Private Partnerships are indeed the wave of the future and will become an increasing popular model of cooperation between very different entities and their respective representatives. Alliance consulting professionals and consultants have a huge opportunity to make good business and provide a respectable social contribution by involving themselves in these projects.