CHAPTER 2 LITERATURE REVIEW
2.5. Behavioural Antecedents of Infrastructure PPPs through the Lens of DCT
against their expectations. This was experienced on the London Underground PPP in the UK where an independent arbiter was retained to identify any contractual deviations that the private partners made. Additionally, the arbiter assessed the private partner’s claims against a theoretical model based on a fictional company, which the arbiter considered to be best practice (Currie and Teague 2015). Also, the various roles held by governments in infrastructure PPPs (regulators, partners, planners, etc.) could create imbalances in the partnership. This was experienced on the redevelopment of Spencer Street Railway Station in Melbourne (Australia) where one of the private sector companies that delivered the infrastructure PPP project (Leighton Contractors) noted that their relationship with the government was far from a partnership – instead likening it to that of a master and a slave (Hannan 2004), where they obliged to the government’s demands. Inspired by the imbalance in the partnership, the private partner sued the government for contamination issues which had been initially overlooked (McCann, Aranda-Mena and Edwards 2016). In a similar case on the London Underground PPP (UK), the government is said to have been hesitant to participate in joint initiatives with their private sector counterparts on several occasions (Currie and Teague 2015). Under such circumstances, the party in a stronger bargaining position is often inclined to the DCT style of
“dominating”, whereas the party in a weaker bargaining position adopts the “obliging” style (Rahim 2002).
The second behavioural predisposition is a collaborative win-win style that focusses on achieving mutual satisfaction of all parties involved in the dispute, without resorting to legal proceedings. In such cases, relationships are not destroyed, and parties usually work together to achieve the desired project goals. Thus, this preposition usually prioritises the use of DR approaches that pursue the interests of both parties, such as mediation and negotiation. This predisposition aligns with the integrative dimension of DCT. It was experienced on the Sydney Metro Northwest Operations, Trains and Systems project in Australia where a non-conventional form of dispute boards was applied (Forward 2006). Unlike commonly used dispute boards
where both the dispute resolution and dispute avoidance functions rest on the same team, the dispute resolution role on the Sydney Metro Northwest Operations, Trains and Systems PPP project was contracted to an independent expert. As is usually done during mediation and proactive negotiation, the dispute board on this PPP project discussed emerging issues with all involved parties and facilitated the resolution of issues in a manner that was acceptable to all parties (Worthington et al. 2017). As a result, integrative methods of resolving disputes prevailed.
Finally, the third behavioural predisposition involves compromising. This predisposition is an intersection of DCT’s distributive and integrative DR dimensions. It usually manifests when two equally powerful parties cannot reach a consensus to complex problems (Rahim 2001) even after attempting the DR styles of “dominating” (distributive DR) or “integrating” (integrative DR). Oftentimes, one party may trade an interest for a favour from the other party. This was experienced on the upgrade of Spencer Street Railway Station in Melbourne (Australia) when the government notified the SPV consortium of their intention to claim for liquidated damages due to project delays (Das 2005). Around the same time, the SPV notified the government of their intention to sue them over earlier project delays they had encountered because of contamination and access issues. To reach a compromise, the government agreed to forgo the liquidated damages on condition that the SPV withdrew the court case (McCann, Aranda-Mena and Edwards 2016). On some infrastructure PPP projects, for example the Kaesong Industrial Complex (on the border of South Korea and North Korea), conciliators are appointed to facilitate consensual compromises when disputes arise (Lee 2016).
Based on the discussion presented in this section, it can be said that sufficient connectivity exists between DR in infrastructure PPP projects and DCT. This evidently supports the application of DCT in infrastructure PPP research.
2.5.3. The behavioural predispositions in practice
In accordance with the DR behavioural predispositions described in Section 2.5.2 of this thesis, the DR styles of DCT can be said to collectively account for DR in infrastructure PPP projects, as infrastructure PPP practitioners know it today. It is, however, important to note that no single behavioural predisposition monopolises the approach to DR for any given infrastructure PPP project. Instead, DR styles vary between the extremes of adversarial and cooperative techniques (Section 2.6.3 of this thesis) depending on the situation as well as behaviour and attitude of the infrastructure PPP project parties involved in the dispute (Currie and Teague 2015). This is similar to DCT where difference in the behaviour and attitudes of individuals results in varying degrees of concern for others or self, yielding diverse DR styles. Also, the project environment for infrastructure PPPs is generally relatively stable during the project duration that typically lasts 20-30 years or more in some instances. Thus, the DR approaches of the different organisations involved in any given infrastructure PPP project tends to stabilise over the years during execution of the project (De Dreu et al. 2001). Consistent with the principles of DCT, predictable behaviour towards disputes may result. Even when project team members may change over the project duration, the organisations’ values and culture on dispute – into which the individuals are usually oriented upon deployment, foster stability of the teams’ DR approaches and predictability of their behavioural response to disputes.
In situations where divergence of the project parties’ behavioural inclinations results in different DR styles, DCT researchers suggest that the behavioural inclination of one party can inspire change in behavioural inclination of another party (Deutsch 1973; De Dreu et al. 2001).
They further observe that DR styles where individuals have high concern for other parties’
outcomes are more likely to encourage cooperation from other parties. Similarly, DR styles that seek to protect parties’ selfish interests may inspire competitive responses from other parties.
Consequently, parties that could have originally been inclined towards different DR styles may eventually be drawn towards DR styles that are similar. Further investigation on the occurrence
of these behavioural dynamics in the context of infrastructure PPP projects needs to be done, with empirical evidence.