The interaction between stakeholders, or the parties involved, has an important role in the project cycle. The main goal is not just to communicate about PPPs. Communication with stakeholders is an essential element of all projects, whether through a PPP or traditional procurement process.
The government should identify the critical stakeholder groups (see section below) early in the project process. Communication with stakeholders is essential to facilitate their understanding of the process, to gain social, business and political support for the project, to attract potential investors, and to reduce risks for the project.
One of the most important steps in the effective management of key stakeholders is to map their needs, concerns, worries, and interests. This process is vital to a project’s success because it provides project managers with the ability to transmit (communicate) the appropriate information which addresses their need(s) to each stakeholder.
However, research has convincingly shown that governments need to do more than just communicate with stakeholders: in many countries, citizens expect active involvement in projects and to have an active say in the process. Governments should strive toward maximum accountability and transparency by organizing occasions for critical reflection (such as academic conferences, citizens' summits, and so on) to enlarge public support. See box 3.13.
Some projects can lead to externalities (as discussed in section 2.8). These externalities may impact the environment or a particular population group — for example, nearby house owners are affected by the construction of a prison or a sanitary landfill. Such groups may be sufficiently opposed that they take action and can delay or even halt a project. For example, a new water filtration plant proposed in Canada was cancelled after public protests, a South African toll road was delayed, and a public parking project was interrupted in Brazil.
Stakeholder engagement is becoming more important than ever, as businesses are under close scrutiny by the media and regulators, and opposition is easily aroused and coordinated via social media. Note the converse, however: stakeholders can be eager promoters of infrastructure projects, and governments should look to generate and take advantage of such momentum.
When a government takes the initiative in communicating with stakeholders by providing information and inviting feedback before formal opposition develops, the probability of success increases considerably. For example, the sponsors of the Alandur Sewerage Project in India ensured early involvement of the public through surveys and citizens’ committees coupled with targeted outreach explaining the project costs, benefits, and tariffs. As a result, the project proceeded smoothly, with citizens agreeing to pay a one-time connection fee, and thereby contributing 29 percent of the financing.
Another example of the benefits of communication with the public regarding a sensitive project is the Timarpur-Okhla Integrated Solid Waste Management Project in India. The project required incineration of waste and raised questions about air pollution. Five public hearings were organized to address substantial doubts held by the public regarding the project. This education process ensured that the public appreciated the benefits of the project.
Furthermore the relationship with stakeholders is not a static process. Throughout the project’s life cycle, this relationship will involve several types of audiences, channels, and practical actions for both the establishment and maintenance of relationships. Early in the process, in the Identification Phase of the project, the audiences, communication channels, and actions to be considered are relatively few. As the process moves forward through the Structuring and Tender Phases, the number of stakeholders increases and the need to use a greater number of channels, actions, and information in order to assist these stakeholders increases as well.