June 14, 2017
Survey Reveals Trends in Operational P3 Projects, Both in Canada & Globally
A recent international survey of operational Public-Private Partnership (P3) projects has revealed insights into the factors which are driving successful P3 contracts in Canada and outlined the risk factors that can compromise long-term project success when robust frameworks are not in place.
Supported by CCPPP and the NCPPP (National Council for Public-Private Partnerships) in the U.S., the research, which was carried out by O&M performance management software provider, Service Works Global and leading industry publication P3 Bulletin, garnered the views of over 200 industry practitioners from across the globe. Almost a third of respondents were based in Canada (only surpassed by professionals from the US which represented 37%), a figure that is perhaps not surprising given Canada’s position as a global leader in P3s.
With many Canadian public infrastructure projects now being delivered using the P3 model, the survey highlighted how the strategic priority for stakeholders is shifting from securing new P3 contracts to ensuring that the existing assets are being maintained effectively. In Canada, 50% of respondents are spending more than half of their time on operational projects, compared to a global average of 40%, and the less developed P3 market of the United States, where only 29% of respondents are spending at least half of their time on operational projects.
The research also revealed the factors that respondents flagged as key risks to the success of P3 projects during the operational phase. Differences in contract interpretation was identified by the largest proportion of respondents - 68% in Canada - higher than in any other geographic region. This was followed by poor contract documentation (as stated by 48% of Canadian professionals) and difficulties in achieving the performance level set out in the contract (according to 47% of Canadian respondents).
Whilst the figures varied from country to country, the same key risks were identified across diverse geographic regions, confirming the view that any ambiguity in the performance management framework presents the most significant risk to the success of P3 contracts. It also highlights the importance of access to critical performance management information.
Consistent with these findings, the survey showed strong Canadian support for better communication for driving improved performance (as stated by 68% of Canadian respondents), integrated performance management software (19%) and formalised continuous improvement mechanisms (18%).
The pressure to reduce costs in operational P3 projects was also evident. In Canada, 88% of respondents felt there was at least some degree of pressure to reduce prices; while in the UK, where there has been a centralised effort to reduce the cost of existing contracts, the proportion was a staggeringly high 96%.
It is noteworthy however, that actual price reductions appear far more common in some markets than others. In Canada, the plurality of respondents (29%) had not seen any reductions, compared with the UK, where 85% of contracts had been subject to cost-cutting.
Canadian practitioners were also the least likely to report contractual disputes, with just 26% of respondents having been involved in disputes compared with 42% in the UK and 62% in the US. Further evidence of successful, collaborative P3 working relationships in Canada is demonstrated by the fact that Canadian respondents reported a much higher level of satisfaction from both public and private sector parties, compared with other mature markets, such as the UK.
Commenting on the survey findings, Mark Romoff, President and CEO of CCPPP, concludes:
“The results demonstrate that Canada is again leading the way in P3 best practice. We believe our strong legal framework, an experienced private sector, dedicated P3 agencies, widespread adoption of integrated payment mechanism systems and political commitment to P3s at all levels, have led to stronger partnerships.”
To request a copy of the full survey results, please e-mail [email protected], stating your name, company name and include ‘PPP Survey Results’ in the subject line of the email.
About Service Works Global
Service Works Global (SWG) is an international expert solutions provider of comprehensive Facilities, Property and P3 Operational Performance Management software. The company is committed to improving the performance of its clients’ real estate portfolios and facilities, through the provision of quality products and services, combined with a partnership approach, to deliver complete and customised technology solutions. Many of the world’s leading corporate, government and service provider organizations rely upon Service Works’ software to optimise control of assets and resources, improve operational efficiency and reduce costs.
Service Works is headquartered in London, UK, with offices in Canada, Asia Pacific and the Middle East.
For more information: contact Annie Gales, Marketing Director at Service Works Global on +44 (0)20 8877 4080 or email [email protected]