Assessment of stakeholders’ responsiveness in public–private partnership projects: perspective from Nigeria

The exigency to bridge infrastructure deficit has prompted private sector involvement in public infrastructure provision. Over the years, governments, in both developed and developing nations, have exploited public–private partnership (PPP) as an alternative project procurement path on the basis of the advantages it portends. The arrangement has been very popular in the last 2 decades as governance strategy to improve infrastructural projects delivery (Nederhand and Klijn, 2019). Whilst the impetus for the use of the system differ considerably, its advantages have been hinged on better system of risk allocation, innovative system for project execution and management, and an effective and efficient project framework on a defined life-cycle basis (Li et al., 2018).

Research studies abound on PPP arrangement in project implementation, particularly on its critical success factors, impediments to its adoption, risk management and more recently on stakeholder’s management. However, concerns for attainment of best value from PPP alliance have often been expressed as function of stakeholders’ contributions to the arrangement (Nederhand and Klijn, 2019; Kusio, 2021). In this regard, Verweij et al. (2017) viewed stakeholders’ effective discharge of roles and responsibilities to defining anticipated benefit of the arrangement. Panda (2016) pointed to the fact that the fulfilment of roles and responsibilities by stakeholders are sacrosanct to value creation in PPP arrangement.

While many literature on PPP stakeholders identify stakeholders’ willingness as a critical success factor, analytical scrutiny has not been given to the responsiveness of stakeholders to the system. The success or failure of PPP projects can therefore be predicated on stakeholders’ preemptions, actions and inactions. The situation is precarious in Nigeria with the collapse and non-effectiveness of many PPP projects. This is traceable to the level of responsiveness of the key players. Therefore, this paper aims at evaluating stakeholders’ responsiveness in PPP projects in Nigeria with a view to enhancing performance. The paper presents an original view of the concept of stakeholders’ responsiveness in PPP projects, as it relates to Nigeria working environment, relying on both literature review and empirical evidences.

The stakeholder theory and theoretical concept of responsiveness provide the theoretical background for this study. Maximising shareholder value is perceived as the ultimate goal of any company, which is also used to explain the connections between stakeholder management and firm performance (Donaldson and Preston, 1995). The conceptualisation and implementation of PPP projects involve managing stakeholders for the desired result (De-Schepper et al., 2014; Mandiriza and Fourie, 2023). This is on the premise that the involvement of diverse stakeholders is motivated by different interest and, as such, there is need to balance these interests. Barrett (2001) expressed the instrumental approach to understanding stakeholder theory as based on a responsive system aimed at improving organisation performance. The stakeholder theory is intended towards seeing business and ethics as a single integer to organisational success. The researchers’ metaphoric expression of stakeholders is like a skeletal system whose part is needed to be understood for proper relation from one part to the other in giving the desired movement.

Responsiveness has been expressed “as the ability to react purposefully and within an appropriate timescale to customers’ demand or changes in the marketplace, to bring about or maintain competitive advantage” (Holweg, 2005). Stakeholders’ responsiveness is thus conceived as the willingness and commitment of stakeholders to effectively perform their obligations in any given organisation, for the purpose of achieving set goals. Whilst majority of studies have considered the willingness and commitment of stakeholders as a single factor within other critical success factors (Opawole and Jagboro, 2016), stakeholders’ willingness and commitment to performance of obligation are seen to be very key to PPP project success. Therefore, stakeholders’ responsiveness needs to be scrutinised as a parameter for measuring PPP project performance.

The provision of basic infrastructure is one of the traditional responsibilities of government all over the world (Tipil and Yakubu, 2016). This responsibility, for a very long time, was solely carried out through the conventional procurement system. Undoubtedly, there had been infrastructure achievement through this system; but the procurement path is fraught with incidences of inefficiency and ineffectiveness at project delivery and performance (Bamidele et al., 2015). Added to this debilitating situation are issues of funding and management, which has been shown, with international experience, to be surmountable through PPP (Vecchi et al., 2015). As an alternative procurement system, PPP affords parties the opportunity to appropriately share risk. By this, government is able to focus on the policies for the arrangement and creation of an enabling environment, while the private sector takes on the responsibility of construction and operation of projects (Colverson, 2012). Consequently, with the use of private funds, government is relieved of financing capital project particularly in periods of fiscal crisis (Dantala, 2014). It is also advantageous at overcoming functional incapability and bureaucratic lethargy which characterise public organisations (Dykes and Jones, 2016).

Kyvelou and Karaiskou (2006) and Shaoul et al. (2012) described PPP arrangement as a way of contracting infrastructure project over a long-term period between a public sector (the procurer and purchaser) and multiple private sector companies which design, construct, and maintain the infrastructure and provide some related services. PPP can be of different arrangements depending on legal traditions (Davies and Eustice, 2005; World Economic Forum, 2017). The agreements are generally based on a simple “design-build”, “operate” and transfer. This may, however, take many forms in sharing benefits, responsibilities and risks (Buljevich and Park, 1999; Yescombe, 2014).

In PPP projects, it is difficult and often confusing to define stakeholders. They can include the formal partners in a PPP agreement, but also include project sponsors, team members, customers or users, experts and external parties such as non-governmental and civil society organisations. These parties have different roles to play and the expiations from them are diverse. PMI (2013) described project stakeholders as “an individual, group, organisation, who may affect, or be affected by a decision, activity, or outcome of a project”. Considering stakeholders’ differences in rights and claims to an organisation, Clarkson (1995) classified stakeholders as either primary or secondary. While primary stakeholders were viewed as financiers (investors), employees, customers, suppliers, secondary stakeholders were viewed as those who are not critical to the corporation’s survival. Fageha and Aibinu (2016) classified stakeholders as either internal or external. Internal stakeholders were regarded as primary stakeholders such as owners, customers, suppliers and employees. External stakeholders were viewed as those who have strong interest in projects but possess no formal contractual relationship to the projects. Węgrzyn and Wojewnik-Filipkowska (2022) classified stakeholders into four groups: sponsors, grantor, lender and bond investor; and those who perceive success in the broadest context of socio-economic criteria. These groupings expressed different level of involvement of stakeholder which have a lot to do on the respective responsibilities. For the purpose of this study, therefore, a generic list of key stakeholders, as synthesised from different literature, in respect of PPP project include public sector (government), private sector (concessionaires, financiers, consultants, contractors) and the end-users (incorporating the project community).

With the risk-sharing and risk transfer occasioned by PPP arrangement, Manley et al. (2007) expressed the need for role and responsibility clarification amongst contracting parties. Thus, in attaining a balanced system at goal actualisation, mapping the roles and responsibility of the key stakeholders is considered very essential (De-Schepper et al., 2014).

Public sector responsibilities: Lagos State Public Procurement Agency (2012) stipulated the general roles and responsibilities of government. These include providing enabling environment for the private sector operation; transfer assets to the private sector; political will and support; appropriate framework and external advice on PPP procurement procedure. Babatunde and Perera (2017) indicated government’s involvement in providing guarantees, political support and project economic viability as critical to PPP success.

Concessionaires’ (private sector) responsibilities: Efficient and effective delivery of projects with better financial and managerial capability and value for money had been proclaimed, in various literature, as some of the very cogent reasons for private sector involvement in public infrastructure provision (Wojewnik-Filipkowska and Trojanowski, 2013). Depending on the type of contract, the responsibility of the private sector may include some or all of the following: initial construction, upgrading or major rehabilitation, mobilisation of private fund, collection of revenue, innovative approach to project delivery, proffering suitable design solution, technical capability and skills, effective management system and establishment of special purpose vehicle (Lagos State Public Procurement Agency, 2012).

Project financiers’ responsibilities: According to Hegna (2017), the private financiers are saddled with the role of identification of financial shock that may be in the way of the concessionaires. Considering the need to secure equity and debts on projects, the financiers’ roles, as observed in most literature, involve analysis of financing costs against the insurance provided, identification of financial shocks to PPP consortium, contract negotiation, fund investment, provision of knowledge for contract renegotiation and observing exogenous risk.

Consultants’ (advisers) responsibilities: Whilst the public, concessionaires and financiers are key stakeholders to PPP projects, the involvement of the necessary advisers is key to the arrangement. The European PPP Expertise Centre (EPEC, 2014) premised the achievement of an excellent PPP system on the input of the advisory team available on either side of the arrangement. By this, advisers, who are basically consultants, have key roles to play in finance, technicalities, legal understanding and project management.

Contractors’ responsibilities: Opawole and Jagboro (2016) highlighted the rationale and benefit of having the actual construction responsibility under the purview of the private party in the PPP arrangement. The contractor (including sub-contractors and suppliers), working on behalf of the concessionaire, has the comparative advantage of the technical expertise. The responsibilities of the contractor, in this regard, can be harmonised to include evaluation of project risk; design, build and operate; management of insurance gap; operation and maintenance; public relation; community interest for projects; providing equity investment and provision of finance for the project.

End users’ responsibilities: Stakeholder engagement process at the operation and maintenance phase issue has been raised by Amadi et al. (2014). The end users are key stakeholders whose responsibilities are majorly in term of payments for services rendered at the operation and maintenance phase of any PPP arrangement. A good example was given by Babatunde and Perera (2017) as payment of toll charges in PPP road facility.

Beyond the triumvirate of time, cost and quality as a basis for measure of project performance, stakeholders’ commitment has been identified as a critical success factor to PPP project performance. The provision of infrastructure through PPP has been adjudged successful in terms of effectiveness. However, a number of problems have been encountered (Hodge et al., 2010). El-Gohary et al. (2006) arrogated one of such problems to stakeholder opposition. Stakeholder opposition is mainly from the differences in the expectations of stakeholders involved in PPP.

Different perspectives have been used to elicit the requirement of stakeholders’ responsiveness to PPP project performance. Shen et al. (2016) examined investment distribution amongst the focal stakeholders and its effect on project performance. Zhang et al. (2018) examined the behavioural intention of the public and private sectors in PPP. The author was of the view that sectors participation in PPP projects comes with great behavioural intentions that exceeds willingness to collaborate and exerts necessary effort to project performance. Oyigbo and Ugwu (2017) hinted on performance evaluation of projects to include the assessment of how well the parties have performed in line with contractual obligations. Accordingly, Eyiah-Botwe et al. (2016) hinged on the fact that actions of the various stakeholders, at project implementation, tell about their commitment to the success of the project. PPP project stakeholders are either affected by or affect the development of the project. Therefore, capturing their input is a crucial component of the project development process.

Despite the huge recognition and high expectation of PPP model, the experience has particularly been worrisome in Nigeria with a number of key PPP projects terminated, held up and/or shroud in controversy (Babatunde et al., 2015). For instance, the concession of 105 km Lagos–Ibadan Expressway valued at US$597 million, which was awarded in 2009 under a Built, Opetate and Transfer (BOT) model, was revoked in 2012. In addition, the concession of popular Murtala Mohammed Airport Terminal 2, valued at about US$250 million, which was commissioned in April 2007, has been enmeshed in controversy till date. This stems from the fact that the revenue expectations from the project are not being met. Also, the concession of Nnamdi Azikiwe Airport, Abuja, was later revoked. A mixed situation of successes and shortfalls with PPP projects (such as the Lekki-Epe Express Road, Oluwole Urban Market, Tejuosho Ultra-Modern Market and Independent Power Projects) are reported to border on parties’ level of discharge of roles and responsibilities. The current situation calls for concern to really look at where the problem lies. Babatunde et al. (2015), in an attempt to examine the barrier to PPP implementation in Nigeria, identified 58 factors and categorised them into ten components. A cursory look at the factors shows that there was no clear inclusion of the issue of stakeholders’ responsiveness as a factor influencing PPP project implementation.

Survey research method was used for this study. Primary data were obtained via structured questionnaire administered on relevant stakeholder involved in PPP projects initiated by Lagos State Government, Nigeria. The rationale for choosing Lagos State includes availability of substantive PPP infrastructure projects and for the fact that about 65% of construction professionals’ head offices, in Nigeria, are located in Lagos. The preliminary survey carried out showed that twenty-four (24) PPP infrastructure projects have so far been initiated by Lagos State Government. This comprises of housing, road, bridges, health, multi-level car parks, waste disposal/management and model market projects. The study population comprises the primary stakeholders involved in the selected projects. These include the officials in various ministries, departments and agencies (representing the public sector); concessionaires, contractors, consultants and financiers (representing the private sectors). From the preliminary study, it was evident that not all the government officials involved in the process have the in-depth knowledge of the PPP arrangement. As such, 37 managerial officers, identified for the selected projects, were purposively selected for public sector stakeholder. The preliminary study also revealed that the private sector stakeholders were interwoven and cut across the project categories. As such, 20 concessionaires, 17 financiers, 22 contractors and 19 consultants were purposively selected for the private sector. This gives a total number of 115 sample size. Out of the 115-questionnaire distributed, 81 copies (with valid responses) were received and used for the analysis. The elicited data included the demographic background information of the respondents, project types, responsibilities of the identified primary stakeholders and their level of responsiveness to the mapped responsibilities. Compilation of responsibilities of parties to PPP arrangement was synthesised from the various reviewed literature and PPP procurement manuals against which the empirical research was measured. Specifically, the studies of Manley et al. (2007), De-Schepper et al. (2014), APMG International (2018) and Lagos State Public Procurement Agency (2012) play significant roles in the compilation of the variables used. The respondents were required to rate the level of responsiveness of the listed stakeholder, to the designated responsibilities, across the project types based on the five-point Likert scale assessment from 1 being “the least” to 5 being “the highest” ratings. The mean score for each variable was computed, reported and discussed. In order to test for possible differences in the opinion of the respondents, based on their experiences across the types of project used for the study, ANOVA was computed.

The general information of the respondents was first analysed to ascertain their eligibility for the study. The issues presented revolved round the stakeholders’ organisation and professional designation of the respondents. Highest responses (37%) were gotten from the public stakeholders. Responses from the contracting organisation, consultants, concessionaries and financiers were 25.9%, 21%, 9.9% and 6.2%, respectively. Regarding the professional designation of the respondents, engineers have the highest number (37.0%). Other professionals were quantity surveyors, project managers, accountants and architects with 22.2%, 12.3%, 9.9% and 4.9% respectively. It was also observed that lawyers and medical doctors accounted for the same proportion (3.7%) each. Medical doctors were involved because of the PPP health facility. Whilst the purposive sampling of respondents was based on knowledge of PPP projects, analysis of the respondents’ experience in PPP projects revealed that housing and electricity supply were the most predominant types of PPP projects undertaken. These represent 19.8% each. Next to these were multi-level car park, road construction, ultra-modern market construction, waste disposal and management projects, respectively, with 13.6%, 12.3%, 11.1% and 9.9% experience levels. These results show that the primary stakeholders were more involved in housing and electricity supply when compared to other types of PPP projects. Based on the respondents’ information, they are adjudged to have a good knowledge of PPP in construction and are deemed qualified and competent to provide resourceful and reliable information for the study.

 Table SI shows the respondents’ perceived level of responsiveness of the stakeholders towards their responsibilities. As shown in the Table, the aggregate mean score of 3.28 indicates that the overall rating of government’s responsiveness is fair. Government was observed to be mostly responsive to provision of policy support (3.89) when compared with other designated responsibilities. Ranking second and third, respectively, are providing economic, social and ecologically stable environment (3.64), providing political support for PPP projects (3.48) and ensuring a functional legislative framework (3.48). More so, government was found to have good response to such responsibilities as readiness to transfer asset to the private sector (3.44), good institutional system (3.44), provision of project off-taker (3.37) and provision of viability fund (3.33).

The results, as shown in  Table S1, revealed that the concessionaires have exhibited high level of responsiveness to the responsibilities such as ensuring technical feasibility of the project (4.52), proper hedging of borrowed foreign currency against currency risk (4.36) and establishment of a special purpose vehicle (3.42). For the financiers, “preparation of financial model” (2.90) and “ensuring enough financial resources are available” (2.90) are the two responsibilities the financiers were mostly responsive to, though the level of responsiveness was low.

For the consultants, the results show “identify project risk and advice on risk measures” (4.14) as the highest responsive responsibility. Following this closely was project audit and evaluation which had a mean score of 4.01, each. This implies that the consultants showed more willingness and commitment to the two responsibilities than others. The results also showed the responsibilities with low responsiveness as preliminary evaluation of project (2.90), involvement in provision of criteria for design, construction and specification for the project (2.90), providing realistic timetable for the technical implementation of the project (2.86), monitoring and managing project delivery and service output (2.85) among others. The level of responsiveness to these responsibilities, which was very low, is however considered very important. The implication of this can be linked with the failure of PPP projects in Nigeria. In the same vein, the average responsiveness level of contractors was found to be very low in the designated responsibilities. These include evaluation of project risk (2.98); design, build and operate (2.94), management of insurance gap (2.75) and operation and maintenance (2.73) among other responsibilities. These are, however, very important duties and the implications of contractor’s failure on them will definitely have serious negative effect on the success of PPP project. For the end-users, the aggregated mean level of responsiveness, across their responsibilities, was 2.30. This is an indication that the end users are not responding well to their responsibilities.

In order to test for the statistical significant difference of opinion based on the experience of the respondents on different types of project used for the study, ANOVA was computed and the results are as indicated in  Table S1. The statistical significant level of the variables was set at 5%. The results show significant differences in the opinion of the respondents on few of the variables. This might be connected with the varied experiences across the types of project used for the study.

The findings on the part of government, as a key stakeholder in PPP, indicate good response to responsibilities such as policy support, stable environment and political support. However, the level of responsiveness of government to important responsibilities such as ensuring project exclusivity, management of the general public interest and development of good communication system, which all have to do with management issue, were found to be low. The overall importance of good management system is to allow effective and efficient delivery of project. As such, a good contract management system, as highlighted by the Infrastructure Concession Regulatory Commission (ICRC), involves maintaining contract database, contract review, compliance, monitoring and reporting. These findings indicate that government MDAs have not been effective at performances of these responsibilities. A similar study conducted earlier by Babatunde et al. (2014) had revealed that public (government) personnel skills were inadequate to deal with challenges of implementing PPP projects. Also, Osei-kyei and Chan (2017) in a comparative analysis of Ghana and Hong-Kong PPP projects, pointed out that the public sector needs to develop adequate knowledge of PPP project to enable good contract drafting and contract renegotiation to avoid litigation.

On the part of concessionaires, the findings indicate the average level of responsiveness to assigned responsibilities to be fair. This is very much expected as the private sector is adjudged to be on the high pedestal when it comes to efficiency and effectiveness. Conversely, the financier’s level of responsiveness was found to be below average. Most of the financier’s responsibilities have to do with provision of fund. This has been emphasised by Matey (2019) in that PPP represents a major route to securing private financing. But going by the Nigeria working environment, where the issue of risk framework has not been properly streamlined, such response is expected. The responsiveness of the contractors was also found to be very low, particularly to responsibilities such as the issue of public relation, community interest, providing equity investment and provision of finance. These are, however, very important duties and the implications of contractor’s failure on them will definitely have a serious negative effect on the success of PPP project. For the end-users, the aggregated level of responsiveness was also found to be low. This is rather not encouraging going by the importance of the end-user’s roles in PPP project implementation. The effect of this is not farfetched.

Findings, from the ANOVA, on the level of responsiveness of the stakeholders across the types of projects, indicate some level of variance. It was established that the respondents’ opinions differ on such responsibilities of government as: “management of the general public interest”, “provision of project guarantee”, “ensure a functional legislative framework”, “readiness to transfer asset to the private sector”, “good contract management system”, “provision of project off-taker” and “good institutional system”. It suffices, therefore, to say that government responsiveness to their roles varies significantly on the project types. For some housing projects, government helps the private developers with off-takers while some other projects had to contend for their patronage. The differences in institutional system can also be pegged on the basis of different MDAs’ involvement on the projects. Ministerial administration and execution of project is often set in line with office procedure. Hence, this might be significant at discharge of institutional role and contract management system. Furthermore, government role at managing the general public interest may differ on the basis of the fact that some of these projects are consumed by government itself (a good example is Independent Power Projects). By implication, it is impossible to set a single bench mark against government roles and responsibilities for measuring government responsiveness to PPP projects.

Financiers’ responsiveness towards the different project types showed that respondents’ opinion on such responsibilities, as: “preparation of financial model”, “provision of information memorandum to lenders”, “due diligence with project documentation” and “agreement and ensure enough financial resources are available”, were statistically different. The implication of this can be reasoned on the basis of the expertise of the financial operators. The level of innovative financing proffered by the financial experts can boost the viability of project and bring in investors for the project. The financial understanding of the economic base of PPP environment would help in proffering better project financing and funding system. While there is no indication of foreign financing to projects used for this study, the variability in financier’s role is well expected on the basis of sectorial differences and project peculiarities. Finding further showed that responsiveness to “project audit and evaluation” was the only consultants’ responsibility that was statistically different among the different project types. However, the results show that the responsiveness of the concessionaires, contractors and end-user/project community towards the different project types were not significant in any area. In other words, their levels of responsiveness to the different project types are on the same level.

The finding on lack of good management system, on part of government, has dare implication on PPP contract administration. For some PPP projects, exclusivity might be a way to allow the private sector gain return on investment. For road projects, the non-excludable property of public goods might still be enjoyed but with facilities such as housing, power project and multi-level car park; government might have to assist in driving the necessary market for such projects. This is based on the proximity of such other facilities in the market. The low responsiveness of government to this responsibility negates the necessity to protect the interest of the concessionaires as far as PPP project is concern. Key finding on concessionaires and financiers, regarding poor response in terms of provision of finance due to issue of risk, is not good for PPP arrangement. Also, the failure of contractors on most of their responsibilities will definitely have a serious negative effect on the success of PPP project. On the part of the end users, low response to the responsibilities such as payment for services rendered, giving social support to the project and payment of toll charges has a great adverse consequence on the success of PPP project implementation.

On a general note, the findings show that the importance attached to the stakeholders’ roles, in PPP projects, was not commensurate with the level of responsiveness. By this, the delay, inefficiency and buy-out in PPP projects implementation can be traced to stakeholders’ responsiveness.

This paper documents an effort in examining the concept of stakeholders’ responsiveness in PPP projects from the literature point of view and empirical evidences. This aim is to establish the degree of willingness and commitment of the stakeholders in performing their obligations. The findings established it that government only demonstrated good responsiveness in the areas of provision of policy support for PPP and provision for economic, social and ecologically stable environment. However, government was not responsive to other responsibilities such as good contract management system. It is instructive to note that good contract management system has several implications to project success. Lack of this system could result in time loss, project value escalation, change in project characteristics, contract re-negotiation, among others. Concessionaires were found to be responsive in areas of ensuring technical feasibility of the project and proper hedging of borrowed foreign currency against currency risk. However, the stakeholder’s responsiveness to averting environmental and social risk was very low. The financiers were found to be very responsive in preparation of financial model, while the consultants were highly responsive in area of identifying project risk and advice on risk measures. On the part of the contractors, evaluation and project risk was found to be highly responded to while the end-users show low responsiveness, generally, to their responsibilities.

In summary, the responsiveness of stakeholders to identified responsibilities can only be said to be fair on the part of two primary stakeholders – government and concessionaires. Others stakeholders – financiers, consultants, contractors and end-users exhibited low level of responsiveness to their assigned responsibilities. Based on these findings, government as a key stakeholder needs to establish a more functional project management system to ensure attainment of satisfactory project outcomes. It would be in the best interest of all parties that a level of guarantee be provided by government to ease financial issues that is often associated with the implementation phase of PPP. On the part of the concessionaires, adequate contingency plan should be put in place for project execution. Finances sought for PPP project should be free of liabilities unrelated to the project. The financers need to be more involved in the assessment of exogenous factors to PPP project financing. The professional expertise of the consultants should be well explored to give the best economy on project execution. Contractor’s equity contribution should, also, be encouraged to help boost the value of PPP project. Finally, the involvement of end-user and project community should be done as early as possible to register the roles they have to play in PPP project execution.

The limitation of this study might be in the combination of different types of project. The projects’ peculiarities might have an effect on the level of responsiveness of the stakeholders. As such, further study, narrowing down the scope to specific project, can be conducted.

The supplementary material for this article can be found online.