Before PPPs – Strategic Planning
2.2 What are the key steps in strategic planning?
Strategic planning entails a process of medium-term planning based
on sound information and stakeholder participation. It may be merged
with or a component of Poverty Reduction Strategy
Papers and Medium
Term Expenditure Frameworks if these are already developed. If
these are not already in place, however, a strategic planning process
should precede any activities aimed at formulating a PPP.
A simplified strategic planning process can be conducted within
the municipality by:
- A. identifying the service problems to be solved;
- B. identifying the stakeholders that will be involved/affected
by the PPP;
- C. consensus building;
- D. defining service objectives;
- E. analysing the key factors influencing service delivery
- F. understanding existing service provision
and the opportunities for (and constraints on) including all
stakeholders in the delivery process;
- G. investigating delivery options (including the PPP);
- H. selecting a way forward;
- I. coordinating a system of service delivery; and
- J. considering implications of non-delivery of services.
Strategic planning for PPPs means developing a comprehensive
approach to the development of solutions. It
is an essential step in the preparation for PPPs since
it will ensure that municipalities know:
- what the objectives are;
- how the PPP fits within their overall goals and if a PPP
actually the best solution;
- how the PPP relates to other municipal functions; and
- how the PPP contributes to poverty reduction.
A. Identifying the problem
The first step, identifying the service problems to be solved,
can be divided into two assessments – one quantitative,
the other qualitative.
A quantitative assessment of the scope of existing service
The municipality needs to carry out an assessment that will
answer the following questions:
- What services are received in which locations?
- What are the reliability, quality and quantity of service in
- How much does it cost to supply the service?
- Why has the government failed to deliver better services?
What are the political, financial, technical and staffing
constraints, for example?
A qualitative assessment of service delivery in relation
The municipality must also carry out a participatory
poverty assessment that will provides answers to the
- What access
do the poor have to services?
- What are the primary (physical,
financial, social) constraints to better access?
- How does access vary? For
women? For children? For other vulnerable groups?
- How much do the poor pay for
services? What does this represent as a proportion of
- What are the seasonal variations
in supply? In demand?
- What are the implications
of poor services? For example, in terms of queuing times,
the additional burden on women, as a constraint on access
to education and so forth.
Summary of Actions
A. Identify the problem
B. Analyse stakeholders
C. Build consensus
D. Define objectives
E. Analyse the context
F. Analyse the providers
G. Explore delivery options
H. Selecting a way forward
I. Coordinate servive
J. Consider implications
B. Identifying stakeholders
A good strategic planning process takes into account all stakeholders
at its earliest stages. The stakeholder identification process
is described in detail in [Tool 9]. At the strategic panning
stage it is important to identify all possible parties affected
by the partnership and to look at their inclusion into the strategic
The following presents a possible, but not necessarily exhaustive,
list of potential stakeholders:
- Consumers and users
- Community-based organisations
- Other representatives/leaders of the poor
- Non-government organisations
- Chambers of commerce and other business groups
- Municipal staff
- Local politicians and decision-makers
- Private sector representatives
- Interested parties at higher levels of government
C. Building consensus
A significant consensus-building exercise needs to be undertaken
among the various sectors and stakeholders in order to
create understanding about the PPP process, develop local capacities
and sustain long-term partnership efforts.
Consensus means “overwhelming agreement”.
It is important that consensus be the product of efforts made
in good faith to meet the interests of all stakeholders. The
key indicator of whether or not a consensus has been reached
is that (after
every effort has been made to meet any outstanding interests)
everyone agrees they can live with the final proposal. Thus,
consensus requires that someone frame a proposal after listening
carefully to the interests of all parties. Interests are
not the same as positions or demands, as demands and positions
are what people say they must have; interests are, rather, the
underlying needs or reasons why people take the positions they
Building consensus among and between partners demands considerable
investment in time and effort – it is sometimes a painful,
but necessary process. Translating partnership objectives
into grassroots realities is a challenging participatory
exercise requiring patience, flexibility, trust and understanding.
The scale of the PPP will affect its outcomes. The larger
the scale (in investment and target group) the more difficult
it will be to reach consensus among all stakeholders.
Effective decisions reached through consensus involve the
- Total participation – they actively involve a
broad range of stakeholders as partners in planning and implementing
- All partners are responsible – they ensure that each
partner has the opportunity to, and responsibility for,
making meaningful contributions.
- Partners educate each other – such decisions allow
stakeholders to spend time discussing the history of the
issue, their perceptions and concerns and ideas for solutions.
- People are kept informed – successes are documented,
publicised and celebrated through an ongoing recognition
programme and communication campaign.
- A common definition of the problem is
used – facilitators
make sure that partners discuss and agree on a constructive
definition of the problem.
- Multiple options are identified – in reaching such
decisions, facilitators provide a medium for stakeholders
to seek a range of options to satisfy their respective concerns
and they avoid pushing single positions.
- Decisions are made by mutual agreement – managers
facilitate the process so that the partners modify options
or seek alternatives until everyone agrees that the best decision
has been reached.
- Partners are responsible for implementation – facilitators
ensure that the group identifies ways to implement solutions.
- Facilitators ensure that partners identify
and manage conflicts early in the process.
More detail on how to build a consensus could be found
in various literature, including the MIT-Harvard Public Disputes
Program Consensus Building Handbook.
D. Defining objectives
An objective is a specific and measurable result that
a project aims to achieve. In this third step, defining objectives,
the municipality needs to look at the following issues:
- What are the objectives of all stakeholders that will
be involved in/affected by the PPP should it go ahead?
- Which services do households, particularly
poor households, prioritise? (In this context, the vehicle
of service delivery – such
as a PPP – should not be presumed).
- What levels of service can stakeholders,
particularly the poor, actually afford to pay for?
E. Analysing the context
Context analysis requires information on the key factors that
influence service delivery and hence form the context. The types
of information, how it can be collected, its use and so on are
listed in [Tool 4]. Constraints and opportunities
are another two major components of context analysis. In regard
to these, there is a need for the municipality to address to the
- What are the constraints on effective service
delivery? (For example, the physical, environmental, social,
political, organisational and legal constraints) [see
Tools 4 and 5]; and
- What are the opportunities offered by the
context? (For example, developing local stakeholder capacity,
promoting national/international stakeholder partnerships
and support, technical know-how exchange, enabling aspects and
so on) [see Tools 9 and 21].
F. Analysing the role of existing service providers
Understanding existing service provision also involves an analysis
of the stakeholders involved in providing services. For
this the municipality will have to:
- identify key service providers and their roles (who is
involved, in what service and delivering to whom?);
- analyse whether or not these
providers are delivering effective services (what level
of service is provided, what are community perceptions and
- ask what the potential roles
are for these stakeholders in future service provision?;
- identify the factors that will
determine the effective engagement of existing service providers.
G. Exploring delivery options
Investigation of options for service delivery in the future
involves the municipality researching two key issues.
First, it must ask what the various options for improving
service delivery are?
[Tool 11] describes the PPP options. However, there are
also non-PPP alternatives, such as state ownership, corporatisation
or divestiture (privatisation), all or some of which may
warrant further investigation.
Second, the municipality will need to look at what
the potential impacts of these delivery mechanisms are
on the poor?
Each of the service delivery options will have a particular
impact on low-income individuals and groups and/or
those living in poor areas. This aspect is addressed throughout
the Toolkit, each Tool providing a list of key issues
that must be taken account of with regard to the poor
during each of the partnership process stages.
H. Selecting a way forward
The municipality must then select the best way to proceed.
In doing so it must consider:
- what vehicle of delivery is most appropriate to the context
and constraints? [see Tools 11, 12 and
- what are the key risks and how
will these be mitigated?
[see Tool 3].
I. Coordinating the system of service delivery
The municipality should consider its coordinating role. Usually
the task force that has been set up acts as the central
coordinating body for the ongoing development of the public-private
partnership project and guidance material and its application
to projects within other agencies [Tool 3].
Depending upon the PPP option, the municipality will have
to take upon itself more or less coordinating responsibilities.
For instance, in the case of a service contract the municipality
will have to take on more responsibility for coordination
than in the case of a concession [Tool 9].
J. Considering implications of non-delivery of services
It is important to foresee a situation when a partner fails
to deliver the services agreed. This could happen because
- construction-related problems, including failure
to meet the schedule and/or quality issues;
- revenues that are substantially off-target;
- regulatory and legal problems; and
- other barriers [Tool 5].
If these problems were not considered
in the original bid, the partners should follow the mechanisms
for requesting renegotiation and should renegotiate and
settle the issue as described in the contract.
However, there could be cases of complete failure.
Then the local government may need to maintain
an option to re-emerge as a provider of the service.