With the industry coming to terms with the rise of progressive P3s, both the public and private sectors have to adjust to new challenges.
“What the public sector grapples with is how they can be assured of the appropriate competitive tension whilst incentivizing the market to bid,” John Laing's co-head of PPPs and projects Anthony Phillips told P3 Bulletin.
Phillips noted that in the market are some hybrid approaches which “involve enhanced risk sharing on critical issues such as cost escalation which enable a high degree of certainty for the public sector to select the right partner whilst providing the necessary protections to enable contractors to bid competitively.
“This makes a lot of sense to us, as does offering a meaningful stipend to reduce the at-risk costs of bidding P3s," he adds.
While there is a lot of learning going on, the same rules still do apply to progressive P3s, with Phillips urging authorities to focus on ensuring project success.
“It is really important that public agencies provide that confidence to the private sector in terms of the underlying support of the project and process itself,” says Phillips. “Where it's evident there's a clear champion within the project to push it forward and that the procurement team is competent, we see a strong appetite for both hard bid and progressive processes.”
P3 Bulletin will be publishing an in-depth whitepaper of Progressive P3s in the coming weeks.