A government may face a situation in which there is no room in the budget (either the current budget or a future budget) to procure all potential projects/government-pays PPPs, regardless of whether all those projects respond to relevant needs of the society in an efficient way, creating public wealth, and generating strong net benefits. In this scenario of a restricted budget, a government may need to undertake a prioritization exercise to choose between different projects.

The first stage of project identification is the identification of a public need[2]. Projects are not an end in themselves. They are enablers for the government to meet its service delivery obligations. Hence, the government needs to understand what the problem is that it is trying to solve before it starts identifying possible projects. Possible problems might be a lack of transportation links within the country, or a low quality of health service.

The starting point of this phase and of the full PPP process is the same starting point as for any procurement of public goods and services process: identification of the need.

The PPP process is composed of a number of phases: identifying the project and screening it as a PPP, appraising the project, structuring the procurement process and the contract, tender and award, and finally managing the contract.

The life span of PPP projects is extensive and it is rare that the same staff and personnel will see the project through to the conclusion. Therefore, it is likely that the personnel involved in the management of the contract is going to change several times throughout the life cycle of the project, and the new staff will need some time to familiarize themselves with the details and the history of the project in order to successfully manage the PPP.

The importance of knowledge management is two-fold, firstly to ensure the continuity of knowledge throughout the life of the project, and secondly to assist the contract management team in meeting legislative and contractual requirements.[31]

Dispute circumstances are intrinsic in any PPP construction projects and could influence the success and failure of projects, thereby generating additional costs for all parties[27] [28]. PPP construction project issues, concerns, and disputes occur as a result of numerous factors such as technical, climatic, and logistical events, while resolution of PPP construction project disputes is influenced by people’s ideas, manners, activities, and cultural implications.[29]

Issue management usually comes into effect when significant risks arise or materialize. The PPP contract management manual should include issue management procedures that deal with irregularities and mitigate the issues that lead to risk materialization.

Conflict and issues typically occur within a contract when a problem occurs. Therefore, a key aspect of a partnering relationship is the resolution of problems quickly, efficiently, and without dispute. This can be achieved through, for example, the following defined mechanisms: