International Engineering Forum

Good Managementin PPP Projects

28 - 29 November, 2014 / Istanbul

Haluk DO ANÇAY

Construction industry since 2000 years..

Survival of the Construction Industry..

Productivity of construction industry decreased constantly, in the last 50 years..

Strong need for a revolutionary development has emerged in the 90’s..

The major problem area was «disconnected nature of designing & building processes»

Time Saving..

First radical change introduced in 90’s..

2 Processes Combined…:DESIGNING and BUILDING..

Operation

Planning Design Construction Operation

Design ConstructionPlanning

Defects are always at junction points…

3 Processes Combined…:DESIGNING, BUILDING andOPERATING..

Project Stakeholders vs Delivery Models

Developer

Investor

Designer

Builder

Operator

Financier

Public Authority

D&B D

&BO

D&BFO P

PP

Disconnected/Partial

Different Targets

Profit Maximization

Partial Sharing of R&R

Win-Loose Relationship

Reactive Behavior

From Traditional

Multidisciplinary/Holistic

Flexible

Value Maximization

Sharing of R&R

Win-Win Relationship

Proactive Behavior

To Contemporary

ProductDelivery

Planning Design Construction Operation

InvestmentDecision

ProductDel

ivery

F i n a n c i n g

M a r k e t i n g

Accumulated Changes

MARKET DYNAMICS TECHNOLOGICAL CHANGES

Life Cycle Targets

Conventional Team PlayDisconnected, PartialDifferent Targets of Each PlayerProfit MaximizationPartial Sharing of Risk&RewardWin-Loose RelationshipReactive Behavior

Stagnant Concept &Scope Management

Strategic Planning Design Construction Operation

InvestmentDecision

F i n a n c i n g

M a r k e t i n g

MARKET DYNAMICS TECHNOLOGICAL CHANGES

Life Cycle Targets

New Rules of Team Play

Multidisciplinary/HolisticFlexibleVALUE MaximizationSharing of Risk & RewardWin-Win RelationshipProactive Behavior

BOx, IDB, IPD, PFI, PPP, LEAN, BIM,

Dynamic Concept & Scope Management

Strategic TargetsFinancialTechnicalSocialEconomical

C o n t i n u o u s a n d H i g h e r C h a n g e V e l o c i t y

New Trends in Construction Industry

• Integrated Design and Build and Delivery Models / D&B, IDB, IPD…• Building Information Modelling / BIM• Lifecycle Costing / LCC and Sustainability• LEAN Construction Principles / LC• Best Value Procurement / BVP• Multidisciplinary Team work and Collaboration• Improved Communication Techniques• Innovation and Creativity• Flexibility• Openness and Transparency• Mutual Trust• Win-Win Contractual Relationship• Moving from Engineering to Entrepreneurial

Typical Characteristics of PPP Projects

• Integrated Project Delivery / IDB• Lifecycle Costing / LCC and Sustainability• LEAN Construction• Best Value Procurement / BVP• Collaborative Working• Improved Communication• Innovation and Creativity• Flexibility• Openness and Transparency• Mutual Trust• Fair Sharing of Risk & Reward• Entrepreneurial Approach

Same DNA in IPD and PPP

From the molecules of lifeto the molecules of business success…

Designer is the sub-contractor of the general contractor..

Designer is in partnership with the general contractor…

Designer - Owner - General Contractorare in partnership…

System of Management in PPP ProjectsBu

sines

s Mod

el Choices a PPP Organizationmake about:

- Sources of revenue- Cost structure- What to make / buy- How to make a profit

Man

agem

ent M

odel Choices PPP Organizations

make about:

- Coordinating activities- Making decisions- Motivating the team- Defining objectives

Ref: Prof. J.Birkinshaw, London Business School

Framework for Management PrinciplesTRADITIONAL >>> ALTERNATIVE

Bureaucracy Emergence

Hierarchy Collective Wisdom

Extrinsic Intrinsic

Alignment Obliquity

Coordinating Activities

Making Decisions

Motivating Team

Defining Objectives

Ref: Prof. J.Birkinshaw, London Business School

PUBLIC

PRIVATE

Good Management vs Good Governance

ParticipationDegree of involvement

DecencyRespect to the rules

TransparencyClarity and openness of the decisions

AccountabilityResponsibility to the society

FairnessEqually applied rules to everyone

Efficiency

Sustainability

VividVision

BestPeople

RobustCommuni

-cationSense

ofUrgency

DisciplinedExecution

ExtremeCustomer

Focus

h.dogancay@projeyonetim.com