Proceedings of the 2016 International Conference on

Industrial Engineering and Operations Management

Kuala Lumpur, Malaysia, March 8-10, 2016

A balanced approach to project

management in partnering types of
contract: a public private partnerships
framework

Putu Mandiartha
University Malaysia Pahang

Colin Duffield
The University of Melbourne
Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

A balanced approach to project management in partnering

types of contract: a public private partnerships framework

Outline
Introduction
Literature review
Research design /Methodology
Results & discussions
Conclusions

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Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

A balanced approach to project management in partnering types of

contract: a public private partnerships framework
Introduction
Aim
To investigate project management relationship employed in
partnering types of contracts
specifically involved in Public Private Partnership (PPP) projects in
Australia.

Methodology:
Survey/questionnaire (combination of email & online survey)
Populations: practitioners of PPP project in Australia
Purposive and snowball sampling method
Inferential Statistic (SPSS): T-test, Anova, Manova

Development of new project management Framework

Enhancement of framework developed by Project management
Institute (PMI)
by adding the strategic project management aspects into
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the architectural of the approach.
Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

Introduction
Research Background
Different nature of managing project,

Partnership vs Adversarial relationships

Advantage of partnerships:

Healthier decision making process, improved communication

toward a better knowledge development and enhance
effectiveness.

Other reasons of adoption of partnerships:

Dissatisfaction on adversarial relationships, due to:

Existence of suspicion on counters parties intention and
deed
Owner : excessive control on time, budget, and scope
Constructor: focus on gaining advantages from
Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

A balanced approach to project management in partnering types of

contract: a public private partnerships framework

Introduction
Problem context:

A discrepancy exists when project management is confronted with this

new type of relationship, partnering / partnerships

Most literature and practice in project management focus on the conventional,

adversarial based of tools and techniques, rather than strategic approach in
managing projects.

Strategic aspects of project management are placed in hierarchical

position where the strategy is above the projects and programmes level

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Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

Typical PPP/PFI governance

Figure 1. Typical PPP governance

(SourceDuffield, 2007)
Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

Project Management:
Functions in managing scope, project organization, quality, cost,
and time
Project Management: the recent issues
Integration of intra-organizational and inter-organizational context
Inclusion of aspects of financial, internal business, external environment,
and learning and innovation perspective.
Coordination, communication and commitment issues
Relationships approach to project management.
Good governance issue.

Issues surrounding governance in Public Private

Partnerships
Risk Management

7
Influence of the financing arrangement
Incomplete contract issue
Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

Research Design
Explanatory study and comparative approach
Research Design flowchart

Research
Research Problems
Problems

Research
Research Design
Design

Measurement
Measurement &
& Sampling
Sampling
Questionnaire
Questionnaire
development
development

Data
Data collection
collection

Data
Data Processing
Processing

8
Data
Data analysis
analysis and
and interpretation
interpretation

Figure 2 Research design flowchart

Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

Research Design
Population
Entities Government Private sectors
agencies Number of Percentage
participants (%)
Government Agencies (States 13
government and public agencies)
Constructors/Contractors 39 37.2
Finance participants (e.g. Banks, Equity 20 19.0
Provider, Superannuation, etc.)

Architects/Designers/Consultants 13 12.4
Operators/Facility Managements 33 31.4
Total 13 105 100

Table 1 Population of PPP participants

Source: Authors compilation and grouping from various source in Australia such as Infrastructure
Australia, Partnership Victoria (2007), Department of Treasury and Finance of NSW (2007),
Department of Treasury and Finance of South Australia (2007), National PPP Forum (2007).

Sampling
Utilises a non-probability sampling with more specifically a
combination between purposive and snowball sampling
techniques 9
Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

Results and discussions

Response Rate
125 correspondences are conducted (incl. query, questionnaire, follow up
email, thank you letter, etc)
95 questionnaires are deployed
25 Responses gathered 26.3% response rate

Characteristic of sample

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Figure 3. Type of organization/company in the sample

Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

Result and Discussion

Hypothesis I
In the perception of all participants, strategic project Management
aspects play an important role for the success of the Public Private
Partnerships projects.
Hypothesis II
In the perception of all participants, strategic project management aspects
and traditional project management aspects are equally important for the
success of the Public Private Partnerships projects.

Level of Measurement :
Likert-typed responses are usually treated as interval data
5 Very Important
4 Important
3 Fairly important
2 Less Important
1 Not Important
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Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

Hypothesis I
The descriptive statistic shows that both groups rate the importance
level of strategic aspects of project management is between important
and very important, 4.58 and 4.62, for public and private sectors
respectively.

Independent Sample T-Test

The assumption for homogeneity of variance is not violated as the result of Lavenes
test shows not significant (p>0.05).
The independent sample t-test for equality of means is not significant (F=0.95, p>0.05).

This means that there is no difference perception in regard

to the importance level of strategic aspect of project
management from the perspective of public and private
sectors.

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Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

Hypothesis II
For testing Hypothesis II, two questions were developed to independently
analyse and rate the importance level of traditional and strategic aspects of
project management in PPP projects (Independent T-Test).

The importance level of traditional aspects of project management,

Public sectors rate: 3.83, Private sectors rate: 3.77
The independent sample t-test result for equality of means is not significant (F=0.064, p>0.05),
indicating no difference perception

The importance level of strategic aspects of project management,

Public sectors rate: 4.17, Private sectors rate: 4.46
The independent sample t-test result for equality of means is not significant (F = 0.007, df = 23),
p>0.05; indicating that there is no difference perception.

The importance level

strategic aspects traditional aspect

Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

Results and discussions

General conclusion:

Aims/Objectives Cultures Drivers

AIM

STRATEGY
VS
Project
Management
PROGRAMMES

PROJECTS
Traditional Strategic
Aspects Aspects

Figure 4 Hierarchy project

management Figure 5 The proposed new
framework

Figure 4 Strategy and projects the hierarchy

Source: Grundy (1998) 14
Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

Results and discussions

Analysis of open-ended questions:
Important areas for PPP project success:
Relationships management
Coordination and communication
Good governance
Stakeholder commitment and management
Human resources management
Scope and change management
Performance reporting
Risk management
Issue resettlement at the project initiation process.

The result indicates that more concerns are given to the

strategic aspects of project management 15
 Relationships Management Coordination & Good Governance
Communication
Management of Project controls and co- Integrity issue.
relationships. ordination. Establishment of review
Good relationships. Planning coordination. group by the participants
Close working Management and co- involved.
relationships. ordination of design Setting objectives,
Flexibility to adapt to development process. cultures, goals, and
change. Maintaining drivers at the
Active and incentivized communication between commencement of
owner. all participants. project.
Grouping of
Good strategic Communication Shared motivations inputs from
relationship. protocols and between public and
participants
Relationships processes. commercials.
management. Contract co-ordination.
Maintaining g Co-ordination.
relationships and Controls.
understanding between Authority Delegation
participants. between SPV and State
Relationships/partnership side.
s management.
Non-adversarial solution.
Compromising ability of
managers involved.
Human Resources Scope & Change Performance Reporting
Management Management
Experience of consortium Version control. Programming or activity
member and public Understanding of sequencing.
partners. project scope. Regular status reporting.
Staff retention and Clear scope. Effective Critical Path
succession planning. Flexibility to adapt to management.
Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

Risk Management Stakeholders Management & Issues Resettlement at

Commitment
Risk management. Consultation and
engagement with key
project's stakeholders.
Engagement of users'
group.
Commitment of all
participants.
Integration of project
stakeholder into the
project-not separated
entity.
Other Aspects
Creative and user friendly
IT tools.
Importance of Facility
Management (operational
aspect).
Active and incentivized
owner.
Project outcome focus
than processes.
Project Initiation Process
All participants (i.e. sub-
contract, utility
managements) should be
finalized prior to the
contract closure.
Contract conditions are
finalized prior to the
contract closure.
Settlement of issues Grouping of
through workshops or
meeting prior to contract inputs from
participants
signature.
Contract design.
(cont.)
Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

A balanced approach to project management in partnering types of

contract: a public private partnerships framework

Project management framework in partnership type of contract

Aims /Objectives Cultures Drivers

Project Management

Traditional Aspects Strategic Aspects

of of
Project Management Project Management

Time Cost Quality Scope/Chan Human Risk Relationship Coordination & Good Knowledge Stakeholder
Management Managemen Management ge Resource Manageme Management Communication Governance & Managemen

t Management Managemen nt Information t
t

S-Curve

Network Quality Change
Diagram
CPM Parametric Control
Quality
Request
Project

Milestone
estimate
Cost Assuranc Charter
Work
Control e
Earned Breakdown
Gantt chart
Value Structure

Issues
Resettlement
at the
Initiation
Process

Figure 6 The proposed new framework

Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

Conclusions & Recommendation

Conclusions:
Strategic aspects of project management play an important role for
the success of the projects.
the project management practitioners in this type of procurement
should consider the implementation of both aspects, traditional
and strategic aspects, in an equal manner.
An enhanced project management framework (approach) has been
developed.
Important areas of project management in partnership type of
project have been highlighted.

Recommendations:
The result of this research can be used as a justification for further, more
robust and intensive research in area of project management approach
in partnerships type of infrastructure provision.
Low response risk research risk.

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Proceedings of the 2016 International Conference on Industrial Engineering and Operations Management
Kuala Lumpur, Malaysia, March 8-10, 2016

A balanced approach to project management in partnering types of

contract: a public private partnerships framework

Acknowledgement:

Prof. Colin Duffield (Unimelb)

AusAID

Survey Participants

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