There is nothing that illustrates complexity better than the implementation of mega-projects. In this case, mega projects are PPP projects that are of high value, and are complex and lengthy by nature[15]. It can be demonstrated that a distinction among four different types of complexity helps to define mega-projects best. One is the overall project complexity, the other three are task, social, and cultural complexity. Normally, the literature has only been concerned about task complexity[16]. If the other types of complexity are not addressed as well, a mega-project is set for failure. Contractors in mega-projects deal with overall project and task complexity by breaking it down to functional departments, to social complexity by trust and commitment, and to cultural complexity by sense-making processes.
Table 7.3 represents the general complexities facing construction projects, including PPPs during their Construction Phase. Many of these tasks are the private partner’s responsibility. However, for the government, contract management is extremely important to ensure the private partner performs these obligations and obeys local laws and by-laws, such as those pertaining to health and safety. The government must also carefully monitor the private partner’s performance and its construction schedule so that delays are quickly identified and responsive actions can be implemented.
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TABLE 7.3: Areas of Complexities in a Construction Project |
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Area |
Task |
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Organizational planning |
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Design planning |
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Work preparation |
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Site setup |
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Construction management |
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uring the Construction Phase, schedule, cost, and quality play a significant role for both parties. Depending on the type of PPP, one party might have more of a vested interest in schedule than in the cost and vice versa. Yet it must be noted that both parties will have obligations that would ultimately involve significant cost, which might not be planned for. Figure 7.5 illustrates definitive areas of complexities in construction projects. It shows the percentage of a sample of professionals who have a perception that a particular item within the Construction Phase will affect the overall success of the project. Interestingly, most of these are soft issues relating to either social or cultural backgrounds, and understanding and expectations about when assets are delivered.
FIGURE 7.5: Definitive Areas of Complexity in Construction Projects
Therefore, the government, even though its primary function is not to build the asset, must understand the overall construction delivery. It must also satisfy itself that all of the relevant permits, procedures, and required documentation is in place by the private party in order for the correct reporting to happen. As is with the case of many other projects, the government needs to play its part in the Construction Phase; otherwise, issues of delay, miscommunication, and potential claims can arise.
Contract management can reduce complexity through decision-making, coordinating, communicating, and learning. A decision connects parts of the project in a specific way by allocating resources and choosing a solution. Coordination allows us to address a variety of problems simultaneously to deliver a planned result, particularly where there are a range of specialized tasks that must be completed concurrently in order to meet time lines.
Communication helps to reduce social and cultural complexity because barriers can be found, discussed, and brought to a resolution. Learning helps to standardize solutions and therefore limits the search. The result is a reduction in the required resources (learning curve). Cultural complexity can also be reduced if the core management group already knows each other through previous projects.
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