STAKEHOLDERS PERCEPTIONS OF PPP GUIDELINES’ PERFORMANCE AND PROPOSED CHANGES
7.3 Analyzing the performance of the Public Private Partnership procurement process
particularly from state organisations, fully acknowledge that regulations that ensure compliance with the procedures, are available, but do not encourage participation. The very strongly influenced factor of alignment of policies and strategies indicated that it is not aligned to support the PPP procurement process. This should have a major influence on the uptake of the process and the level of support received from the leadership structures within the organisation. The information gathered therefore, indicates that there is a challenge with participation on the process. Lack of participation, has an influence on the effectiveness of the process guidelines. This theme also covered the view about whether the PPP procurement process ensured compliance with the regulatory requirements or not and expounded the participants’ views on whether the PPP procurement process is the preferred process by the public and the private sector or not. Participants from both the public sector and the private sector have confidence in the principles of the PPP process, but view the implementation process as a challenge. The next theme is on the analysis of the PPP procurement process performance.
7.3 Analyzing the performance of the Public Private Partnership procurement process
This aspect of the study aims at sourcing information that would assist in analyzing the PPP procurement process performance. The objective of this theme was to establish the views of the participants on the performance of the public private partnership procurement process.
The discussion therefore, starts by checking whether the respondent organisations’ PPP projects have completed the Treasury Approval stages. If completed, what contributed or supported them in completing the stages? If not, what caused the delays in the process? This
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section closes by again checking whether the participants see any links between the success and failure of the project and the guidelines provided by the Treasury, and then recommends alternative ways that would strengthen the tourism PPP process.
7.3.1 Influence on the stakeholders’ decision to terminate the process
The majority of the participants hold the view that the PPP procurement process by Treasury has some influence on the stakeholders’ decision to terminate the project.
The reasons provided for this view that the process has an influence on stakeholders’ decision to terminate the project were categorized as (i) leadership challenges, (ii) process flow challenges, (iii) lack of knowledge, (iv) cost of managing the process and (v) delays within the process. The bulk of the comments emphasize issues related to the process as the major contributors to the decision by organisations to terminate the project or process. According to the participants, the tight rules and processes that are not flexible push organisations to terminate the project. The potential investors decide to look for better opportunities somewhere else because of the rigorous and long process. Treasury’s framework is very rigid and not flexible once the project has been registered and commenced. The investors are business people driven by a profit generating objective and government are too slow in their processes, hence, the termination before completion. Notably, therefore, frustration with the long process drives organisations to terminate the project.
The long period also has an impact on leadership issues as some phases are not finalized until there is a leadership change, for example, new board members. This further delays the decision-making processes. The participants acknowledge that there are regulations that govern the process if the private sector does not meet the requirements that were agreed upon. Treasury can intervene and other stakeholders for example, the board on behalf of the state organ, can submit a request to terminate the project. The next contributor in this section is linked to the cost associated with managing this process. The shortage of funds or limited funds in government entities, drive organisations to terminate the project or even not start the project. The unaffordable costs for transactional advisors that are recommended by the process prevent the public sector from engaging in the process or terminate it because of
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budget constraints. The planning stage that according to the participants, is not fully covered within the process, also leads to the termination of the project especially, when it comes to influences brought by community dynamics. The last area explored in this section is the lack of knowledge in the process which drives the stakeholders to avoid or terminate the project.
7.3.2 Completion of the Treasury approval process
This section of the interview questions, explored whether the participants organisation’s Tourism PPP project completed Treasury’s approval stages. This was aimed at expounding the number of successes and/or challenges and highlights the reasons for either the success or failure to complete the process. The responses to this section are examined in line with the reasons provided above that were cited as contributors to the organisational decision to terminate projects.
Table 17. On completion of the Treasury approval process YES 10%
NO 90%
The majority of the projects (see Table 17 above) have not completed the Treasury approval stages. They are at different stages of the approval process. Only 10% of the projects have been completed. In KwaZulu-Natal, only the Isimangaliso Wetland Authority has a Tourism PPP procurement project that has gone through phase two of the approval process. The actual procurement of the operational partner has not been completed, but has outsourced some of their operational facilities or activities. As covered in the categorization of the participants, the majority of the projects have spent a minimum of three years trying to complete the planning phase. Delays with the planning phase have been continuously identified as the biggest contributor to project failures. For one project, the organisation has finalized Treasury Approval I and is busy with the preparation for the next step of procuring the partner. Other organisations have not as yet completed the process, but are on track with
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their plan. The following points are the reasons that were provided as contributors to the successes, delays and failures in the process.
a) Some organizations took it upon themselves to continue capacitating the project team members, hence, the progress achieved. The guidelines were not as clear as they should have been.
b) The stakeholders were having a clear understanding of the importance of having stipulations behind the Approval process, and as well as the level of competency in performing the necessary due diligence. Their understanding assisted the organization in moving ahead with the process.
c) Full understanding of all role players involved and the assumption that each partner understands his/her role, contributed positively to the success of the phases.
Source: Participants on the research study (Participant the focus group)
The theory on chapter three of role players emphasises the point that for effective implementation of the PPP procurement process, the dedicated team or unit, must have the requisite knowledge and expertise in the PPP procurement process. An emphasis by participants in understanding the process towards an effective implementation supports the theory. This information is later in chapter eight, used to develop the proposed guidelines.
For the majority of the projects that are delayed projects, they are still within the planning phase and waiting for the approval of project viability and feasibility. The lack of clear cash flow channels and delays in sourcing funding for the process, also contributes to the process delays. The majority of participants (60%) cited bureaucracy, legislative compliance and lack of commitment from the project owners as contributing factors causing process delays. The planning process has taken too long to be finalized and as a result, the project has not moved according to plan. The key reasons for this are linked to the feasibility study that should determine whether this project is feasible. The confirmation of the feasibility thus allows for the support of one’s application for the registration of the process with Treasury as the regulator. The following are the detailed reasons for various delays:
a) The organisation is still busy with the formulation of the business case and has not yet even begun with the feasibility process.
b) Still on phase II and busy procuring the partner.
c) They range from TA I approval to TA III approval.
d) Executives and management are still deliberating around the process and structure.
e) Most of them are between TA 1 and TA II.
f) Internal delays, still sitting with the Treasury for approval on TA I.
g) Delays in the planning process trying to secure the approval for embarking in the process.
h) Very far from completion, still engaging various stakeholders for approval.
Source: Participants on the research study (Participant 2, 4, 5, 7, 9)
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The above section confirmed that only one project has partially completed the approval phases with the majority still sitting between TA I and TA II,(refer to Table 4 on Chapter 5).
This indicates that there is either a challenge with the effectiveness of the guidelines in assisting entities to complete the process or a lack of understanding by the entities on how to implement the process as was indicated by participants in 7.2 above.
In addition to the challenges raised above, the researcher attempted to ascertain whether there is any link between the success and failure of the project with the Tourism PPP procurement guidelines provided by Treasury.
All the participants hold the view that there is a link between success and failure of the project with the Tourism PPP procurement guidelines provided by Treasury However, the nature of this link was viewed differently by participants. Some of the participants identified a positive influence while others identified a negative influence. The positive influence the participants referred to was they felt that the guidelines are clear, straight forward and make the process simpler and smooth to follow. The process guidelines also clearly state the boundaries and limitations and if they are committed to, can simply be followed. The guidelines also ensure success by clarifying the limitations of the stakeholders involved in the process. Additional views noted within the survey/interviews are as follows:
a) Guidelines are not in line with other factors that might lead to the completion of the project, hence, the challenge with successful completion.
b) The guidelines have not been work-shopped enough with all the stakeholders to allow for a consultative process and amendments.
c) There is a link in that if the parties involved are not investigated properly in terms of compliance with Treasury’s guidelines, the project can fail.
Source: Participants on the research study (Participant 4, 5, 7, 9)
In relation to the negative influences as perceived by the participants, they are the process is not straight forward as the numbers of structures that they go through in the project sometimes make it difficult for other stages to be completed on time. The investors/implementer end up going back to the structures to source approval on the basis of the amendments, and this is repetitive throughout the process and becomes a vicious cycle.
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