Risk transfer and stakeholder relationships in Public Private Partnerships

Abstract

Drawing on stakeholder theory, this study seeks to gain an insight into the stakeholder management strategies used by the Procuring Authority in Irish road Public Private Partnerships to manage its complex stakeholder relationships.

Keywords:

• Public private partnership
• Risk allocation
• Stakeholders
• Relationships
• Collaboration

Acknowledgements

The authors acknowledge constructive comments received from participants of the British Accounting Association Annual Conference, Brighton, April 2012, Irish Accounting and Finance Annual Conference, NUI Galway, May 2012; Irish Accounting and Finance Annual Conference, Dublin Institute of Technology, May 2015 and constructive comments received from Ciaran Connolly.

Further reading

Websites Used

AA Roadwatch Website http://www.theaa.ie/ [Accessed December 2015].

Comptroller & Auditor General website http://www.audgen.gov.ie/ [Accessed July 2015].

Construction Industry Federation website http://cif.ie/ [Accessed July 2015].

Department of Finance website http://www.finance.gov.ie/ [Accessed July 2015].

Department of Finance PPP website http://ppp.gov.ie/ [Accessed March 2014].

Department of Transport Tourism &Sport website http://www.dttas.ie/ [Accessed July 2015].

Irish Business & Employers Confederation website https://www.ibec.ie/ [Accessed July 2015].

Irish Congress of Trade Unions website http://www.ictu.ie/ [Accessed July 2015].

National Development Finance Agency website http://www.ndfa.ie/ [Accessed July 2015].

National Roads Authority website http://www.nra.ie/ [Accessed March 2014].

Office of Public Works website http://www.opw.ie/en/ [Accessed July 2015].

Transport Infrastructure Ireland website http://tii.ie/ [Accessed October 2015].

Notes

1 Connolly and Wall (2009, p.1) define PFI as when ‘a private sector organisation usually undertakes to design, build, finance and operate a property in order to provide the required service demanded by the public sector body responsible for the ultimate delivery of service’. Although many countries have adopted broadly similar policies to the UK’s PFI, the PPP arrangements differ internationally (Demirag, Khadaroo, & Stapleton, 2015). PPPs involve a vast array of partnership models between the public and private sectors including joint ventures and public social private partnerships therefore the scope is a lot broader than the PFI (Roy, 2008).

2 This study interviewed the majority of the stakeholders included in Table 1. Interviews were conducted with members of the Department of Transport Tourism and Sport, NRA, National Development Finance Agency, Irish Business and Employer’s Confederation, the Irish Congress of Trade Unions, the Comptroller and Auditor General and the PPP Unit.

3 According to Clarkson (1995), a primary stakeholder is one whose continuing involvement is necessary for the firm’s survival. This would include investors, employees, customers and suppliers. There are a number of significant stakeholders such as the equity investors, senior debt financiers and public sector stakeholders (all primary stakeholders) who have legitimate interests in how risk is allocated and transferred in PPPs.