Stakeholder Analysis and Their Attitude towards PPP Success

Abstract

The development of a wide range of infrastructure projects based on the idea of cooperation between the public and private sector, known as PPPs, contributes to fulfilling social and economic needs, rises the quality of life, and supports sustainable development. The expected results of these undertakings cannot be comparable; however, some PPPs are perceived as a success and some are not. The research is based on the stakeholder concept and the idea that different stakeholder groups present different attitudes to the success of PPPs and are motivated by different issues including economic, social, and environmental factors. Based on this assumption, a conceptual model of PPP stakeholders’ identification and classification according to the attributes of preferred benefits, related to dimensions of sustainable development and engagement, including time and scope perspective, has been derived and tested. This exploratory analysis improves and tests the benefit–engagement conceptual model of PPP stakeholders’ identification. This contributes to the theory and concepts of sustainable infrastructure investment and public–private partnership practice.

1. Introduction

The idea of delivering infrastructure services via the cooperation between the public and private sectors has been extensively reshaped during the last few decades. In the early 1990s, the concept took the form of public–private partnership (PPP) and soon gained attention from policymakers around the world. In Europe, the PPP approach was pioneered by a private finance initiative (PFI) launched in 1992 in the United Kingdom. Since then, PPP was popularized in other European countries, especially France, Portugal, Spain, and Italy [1]. In Poland, the process of implementing PPPs began in late 2005.

The general rule standing behind PPP is that it combines the competencies of the public sector and both the financial and managerial commitment of the private entities in the process of delivering infrastructure goods and services [2] (hereinafter: infrastructure). A public party, also called a grantor, usually initiates a PPP project and provides support to the private party during the investment and operational phases. Typically, private investors tend to arrange their cooperation in the form of a consortium. In most cases, this consortium comes in a shape of a special purpose vehicle (SPV) created for the project [3]. In general, the PPP grantor (national or local government) provides the right to deliver infrastructure to the project company (SPV). In return, the grantor obtains the right to oversee management and regulates the services provided by an SPV. PPP financing is usually provided by project equity, loans, or bonds. All project financiers are involved in the financial structuring, drafting of the project documents, and certification of completion [4]. Financing may require a particular group of funding bodies. They are Multilateral Agencies (MLAs), Bilateral Agencies (BLAs), and Export Credit Agencies (ECAs), and they support PPP mainly by international agreements with the central government but they also provide direct lending or guarantees to the parties involved in PPP. The output of a project company can be contracted to the offtake purchasers to divert market risk. Before the goods or services reach the final client, they can be contracted by public utility companies. Finally, the PPP key project stakeholders are public sector clients including final users, unions, and media [5].

PPPs are considered a multifaceted challenge [6] due to more stakeholders than other types of infrastructure projects [7]. The set of stakeholders is dynamic (the stakeholders can change). These dynamic stakeholders also create dynamic relations during the PPP development and implementation (investment preparation, construction, and operation). Their engagement in the project may usually shift over time, not only because of the long-term nature of a PPP project but also because of changeable external conditions. These complex relationships between stakeholders pose a challenge to the successful management of a PPP project [8].

The broad scope of private participation in the process of delivering infrastructure, reinforced by the growing popularity of PPP, its contribution to fulfilling infrastructure needs, accompanied by the importance of infrastructure for sustainable development, reveals the need to adopt a more stakeholder-oriented perspective in project management and a need to go beyond results of the project. These are already happening by a shift of thinking: from the management of stakeholders to management for stakeholders; from GDP (gross domestic product) to sustainable development as an indicator of wellbeing. Scholars confirm that stakeholder involvement in infrastructure development plays a vital role in the success of an infrastructure project [9]; stakeholder involvement has already replaced the term of public involvement [10]. Stakeholder-oriented PPP strategy has already been identified as a prerequisite for success [6] in the sustainable development narration, which should and could be the guiding principle for infrastructure development [11]. PPP evaluation must be more systematic and integrated as the success or failure of a PPP requires taking into consideration the complexities of PPP projects and expanding existing approaches [12]. This research falls into the stream of the research concerning stakeholder management in public–private partnership infrastructure projects. There is still a limited amount of research concerning the issue of stakeholders’ engagement in PPP projects. This research contributes to filling that research gap.

The assumption for the research is that the knowledge of project stakeholders, their power to influence the project, their interest (motivation), the urgency to implement the project, and the ability to create relationships with stakeholders is the condition for the project’s success. However, is important to stress that the attempt to explain the concept of a PPP’s success could be a challenge itself, as every PPP and every infrastructure investment is a complex and unique economic, social, and environmental phenomenon.

PPP in Poland is still an uncommon way of contracting infrastructure services, and comprehensive data on PPPs under the operational phase are hardly obtainable. As far as it is concerned, there is limited academic research analyzing the PPP market in terms of number, value, legal basis, and infrastructure-related sector. Załęczna et al. [13] proved that only a small number of PPP initiatives in Poland succeed in achieving the construction and operation phase (approximately 30%). There is also a lack of statistical information about the PPP projects that were terminated before the date scheduled in the PPP contract. However, market analysis indicates that early contract termination is not an uncommon way to end the cooperation under the PPP project. A new approach to the identification and classification of PPP stakeholders would shed light on the complex relations between PPP stakeholders.

The aim of the research is, therefore, a proposition of a refined conceptual model for the identification and classification of stakeholders in PPP projects. The research has instrumental rationality and looks for answers to the following interconnected research questions (RQ): ‘Who are the PPP project stakeholders’, ‘What are the relations between PPP project stakeholders?’, and finally ‘How do different stakeholders groups perceive PPP success?’ The attempt to answer these questions can contribute to a better understanding of what PPP means to the different stakeholders involved in PPP, and would allow decision-makers (representing public as well as private sectors) to engage under PPP with a greater understanding of motivations and expectations of the partners, which should lead eventually to successful cooperation. The research consists of subareas and three research questions; their interactions are presented below (see Figure 1).

Although sustainable development has been presented as one of the research subareas, it is the fundamental assumption for infrastructure development. From the perspective of private sector partners, the idea of sustainable development might be implemented via strategy of corporate social responsibility (CSR) or the set of environmental, social, and governmental (ESG) factors. Still, the basic concept and the primary theory to the above-mentioned CSR and ESG is sustainable development, which forms the general research background.

The article consists of five sections. The methods and materials are presented in Section 2. Section 3 presents the literature review. Section 4 offers a framework for stakeholders’ identification and classification in PPP projects. It is then verified via a selected case study in Section 5. Finally, conclusions are drawn and accompanied by a takeaway for practice, and also by research limitations in Section 6, which closes this research paper.

2. Materials and Methods

The study focuses on the presentation and discussion of the stakeholder approach to project analysis, and its possible utilization in defining PPP goals, which can be understood in terms of expected results or benefits contributing to project success. The paper is both conceptual and practical. Considering the theoretical concept of the article, this article refers back to the authors’ earlier research [14]. First, this research includes a literature review and its constructive criticisms, which led to establishing the study objective and improving a conceptual model of stakeholder identification and classification in PPP projects. This research approach follows a general idea already established in the previous work of combining two components which are the perception of success in the public and private sector and the stakeholder engagement in PPPs. This research adds value to the conceptual sphere of the model by indicating sustainable development dimensions in the success perception and also to the practical sphere by testing the proposed model using the case study method and discussing the project of the underground car park. The selected project is the first PPP project procured in the form of a concession for the construction. The described case study has an instrumental nature and is focused on presenting how particular stakeholder groups can perceive a project’s success and how it can affect their attitudes towards PPP management. The qualitative method of the case study enables for understanding and describing the case at hand in-depth and has already been selected as a research strategy [15,16].

Considering the research design, two main types of case studies can be distinguished, which are single and multiple-case studies. Both of them can be described in terms of their advantages and disadvantages [17,18]. Contrary to a single-case study, the evidence from multiple case studies is considered more compelling and the overall study is regarded as more robust. This view was formed based on a positivist approach that assumes examining the impact of specific variables on a particular phenomenon and attempts to explain obtained results, arranging them in a cause-and-effect sequence. At the same time, the rationale for a single-case design stems from the fact that it, by definition, concerns unusual or rare cases. Thus, the main flaws of single-case studies refer primarily to the lack of scientific rigor and reliability in the method and its inability to provide a basis for generalization of findings [19]. However, as [20] points out, the purpose of single-case studies is not to draw general conclusions. More specifically, the single-case study seems to be appropriate when it aims to describe and explain a kind of revelatory case that has not been sufficiently described in the literature yet [17]. The research focuses on relationships between several stakeholders, which corresponds to the approach used in interpretive research. In this particular situation, it was important to understand a rare event and analyze it from different perspectives to create a solid base for further theory building [21]. Finally, a research strategy that is well established in the PPP literature was followed. For example, ref. [22] support their findings on PPP stakeholder engagement with the use of a single case study. These arguments justify a single instrumental case strategy [23], that is used to illustrate the phenomenon at hand by applying concepts from theory.

A first step in designing and conducting a single-case study is defining the unit of analysis. This research discusses a unique infrastructure investment of an underground car park named ‘Plac Na Groblach’ located in Cracow in Poland (hereinafter: Project). The justification for this case-study selection is two-fold. The discussed Project is the first local government PPP project in Poland, which was procured in the form of a concession and reached the operational phase. Second, the Project has been operating since 2009, which allowed us a reflection over short and long-term challenges and reliable stakeholder analysis in its operation phase. In the second step, following the phases of stakeholder analysis proposed by Reed et al. [24], the context of the stakeholder analysis must be given. Then the research carries on stakeholder analysis concerning the attitude towards the Project’s success and engagement.

Research methods include a combination of dialogic qualitative interview design, analysis of documentation, observation of the Project and its surrounding, and member validation [25]. In the beginning, tender documentation, local transportation programs, and other available data sources such as articles in the local press and website were studied. The next step included dialogic open interviews to give interlocutors flexibility to discuss issues they deemed most important. The interviewees included the representative of the City authority and of the Project’s company. Directly relevant to the research at hand, interviewees were asked about the identification, attributes, and relations of stakeholders. To better understand the case, after preliminary analysis of the information from interviews and studies of shared internal documentation, a follow-up interview and member validation [25] with the managing director of the Project’s Operator to verify that the facts presented in the case reflect reality took place. The interviews took place in April 2014 in the City Hall and in November 2019 in Cracow at the operator’s location. The research strategy allowed to identify and classify stakeholders. It also enabled to investigate stakeholder relationships in the case study.

Finally, the material has been used to answer the research questions about stakeholder success perception, motivation, and engagement, and develop a proposition of an improved benefit–engagement-based framework for the identification and classification of stakeholders in PPP projects.

3. Literature Review

3.1. Stakeholder Theory

Stakeholder theory derives from corporate planning, systems theory, corporate social responsibility, and organizational theory. Elias et al. [26] distinguish three stages of the stakeholder theory evolution, namely, classical stakeholder literature, strategic management, and the dynamics of stakeholders.

In its classical shape, the concept of stakeholders was first introduced by the Stanford Research Institute in 1963. The concept relates to groups without whose support the organization fails to exist. Organizations were perceived as social institutions, with responsibilities going beyond shareholders, directors, and employees, and the manager’s tasks were to protect various rights of all stakeholders [19,27]. A strategic approach to the stakeholder concept was created by Freeman [28], who defined a stakeholder as any individual or group who can affect, or is affected by, the achievement of the organization’s objectives [26]. The strategic approach relates to three-level stakeholder analysis: rational, process, and transactional. Stakeholders’ identification and their perceived stake are the issues to answer at the rational level. At the process level, stakeholders are identified and classified according to criteria of interest or stake and power. Finally, the organization management of the stakeholder’s relations, the trade-offs, and understanding the legitimacy of stakeholders are the concerns relating to the transactional level. Donaldson and Preston [29] developed a normative, instrumental, and managerial approach to the stakeholder analysis. The normative approach is based on ethical, moral, and social frameworks. It presumes managers take action based on these values. The instrumental approach attempts to identify relations between stakeholders and the achievement of objectives. It verifies if organization success depends on organization responsiveness to its stakeholders. Descriptive studies define and sometimes explain characteristics and managerial behavior relating to stakeholders. The stakeholder theory is also managerial. It does not merely describe existing situations; further, it recommends courses of action to the managers.

Finally, the concept of the dynamics of stakeholders assumes that the mix of stakeholders and their stake may change over time. Mitchell, Agle, and Wood [30] used the attributes of power, legitimacy, and urgency to generate a typology of stakeholders and illustrated the dynamic of stakeholders by the change of stakeholders’ salience (the degree to which managers give priority to stakeholder claims) according to attaining or losing the attributes. They identify seven groups (types) of stakeholders based on the above-mentioned attributes of stakeholders, who can change their classes by attaining or losing one or more of the attributes.

The dynamics may also be illustrated by the application of another mix of attributes. Vos and Achterkamp [31] developed a role-based stakeholder model (client, decision-maker, designer, and passively involved). Crosby [32] based stakeholder analysis on criteria of stakeholder interest and influence. According to Reed et al. [24], Freeman used attributes of cooperation and competition. Savage, Nix, Whitehead, and Blair [33] identified stakeholders based on their potential for cooperation or threat relating to the organization (mixed blessing, supportive, non-supportive, and marginal stakeholders). Callan, Sieimieniuch, and Sinclair [15] provide stakeholder classification based on different types of responsibilities (controller, executer, constraining advisor, and discretionary advisor).

To conclude, the stakeholder theory can be presented from different perspectives that involve very different methodologies, types of evidence, and criteria of appraisal. These several categorization models for identifying stakeholders have been criticized in prior stakeholder literature for their gaps between stakeholder theory and practice, among other gaps [9]. The gaps have been related to the definition of a stakeholder, identification, and stakeholder classification. In particular, in practice, stakeholders have been merely identified with entities benefitting from the project while those who are harmed by the project or have a negative influence on the project were not taken under consideration. There have been infrastructure-project gaps identified associated with stakeholder analysis in the investment cycle and related to investment motivation. Not only should stakeholders be managed at the stage of project construction but especially during the stage of conceptualization. This can help to avoid many problems during the next stages of investment and eventually increase the quality of the project. Finally, the long life of the infrastructure projects and their specific characteristics requires the identification of stages of maintenance and termination, during which stakeholders need to be managed as well. The dynamic nature of stakeholders requires not only whole life management but also management respecting different and changing motivations. This contributes to stakeholder relationship building, enables the provision of checks and balances, and ultimately increases the value of the project, at least in the case of the transportation project [34]. As the literature gaps are also related to the information that is not analytical enough and is not often aligned to PPP, the following part of the paper focuses on stakeholder theory tightly connected with the specific features of PPPs.

3.2. The Importance of Stakeholder Analysis in PPP Infrastructure Projects

The literature overview reveals that the utility of stakeholder analysis varies depending on its purposes, which might include defining success, risk management, stakeholder information provision, or stakeholder management [31]. Dalcher [35] states that the adoption of a stakeholder-centric approach enriches the research perspective and promises new insights relating to project management. Eskerod and Huemann [22] complain that current project stakeholder practices represent mainly a management-of-stakeholders approach, while a management-for-stakeholders approach may be more beneficial. The management-for-stakeholders approach assumes that all stakeholders have the right and legitimacy to receive management attention [36]. According to Hahn, Figge, Pinkse, and Preuss [37], although the management-for-stakeholders approach may lead to conflict-free solutions (win-win situations are characteristic for PPP projects), it might not be very ambitious, might hamper project progress, and finally delay benefits for all stakeholders [38]. The authors propose therefore to integrate management ‘for’ and management ‘of’ stakeholders to balance the necessity for stakeholder inclusiveness and the need to include new stakeholders. The last seems essential in the case of the infrastructure project, which is characterized by a long life cycle and economic, social, and ecological effects, also of external character. Jepsen and Eskerod [39] conclude that the current stakeholder analysis guidelines provide a conceptual framework but miss details. There is then a limited amount of research concerning the issue of stakeholders engagement in PPP projects. In this context, it is especially interesting to investigate how different stakeholder groups affect PPP success or PPP failure.

Some of these aspects have been studied in the literature on critical success factors (CSF). Stakeholders’ issues relating to PPP projects, such as the relationship between partners and their experience in PPP, are perceived to be crucial to the success or failure of PPP projects [7]. A study carried out by Wegrzyn [40] also confirms that particular groups of stakeholders reveal a different attitude toward PPP success. The author examined the perception of PPP success factors among different stakeholder groups in different phases of PPP. Similar conclusions were drawn by Lop et al. [41] in their research examining the factors affecting the operational performance of PPPs. Lack of experience and understanding of PPP among stakeholders was identified as one of the main factors that hamper PPP management.

Discussed papers on PPP success factors prove the justification of stakeholder analysis. There are, however, only a few papers focusing on a broader context of stakeholder engagement in PPP. The dynamic relations among PPP stakeholders were described in an overall manner by [42]. The authors analyzed the process of stakeholder inclusion in PPP projects and ways of increasing stakeholder engagement. Schepper et al. [10] developed a more specific model for stakeholder identification. They focused on assessing stakeholder influence, which enables the allocation of responsibilities and accountability toward PPP stakeholders. By combining power and urgency, they identified three potential types of influence that each group can exert on the project. Some stakeholders have a minor influence on the project—they do not control critical resources, and their claims do not need immediate attention. Some stakeholders may have a potential influence on the project—they possess one of the attributes mentioned above. Definitive stakeholders have a direct influence on the project and its environment—they control critical resources, and their claims are urgent. Finally, ref. [5] examined the process of multi-stakeholder consultation and management in a PPP project environment. They highlight the problem of exclusion of the public sector client in PPP projects. The research, as mentioned earlier, exerts a significant impact on the analysis of stakeholder interactions in PPP projects. However, the analysis of these works leaves some questions relating to project success, stakeholder benefits, and engagement, which are addressed in this research.

4. Conceptual Model for Stakeholder Analysis in PPP Projects

4.1. Analysis of Stakeholders Based on Their Engagement

Stakeholder categorization is a complex issue that can be analyzed from different perspectives. In this research, three of the indicated stakeholder attributes create frames for analyzing PPPs and the potential engagement of stakeholders. Following Shepper, Dooms, and Haezendonck’s stakeholder analysis approach [10], attributes of power and urgency were selected.

Stakeholder power can be defined as the relative access to critical resources for a specific stakeholder group regarding its focal organization [43]. In other words, possessing power in the organization is associated with access to funds, the reputation, competence, or ability to deploy power derived from the position in an organizational hierarchy or legal authority. There are two PPP project stakeholders, who can be perceived as ‘focal’. They are the public initiator (the grantor) and a private partner as a sponsor, often aligned to a project company [10]. That is why the potential attention may be shifted from one group to another, and this depends on the development of the relationship between them. The imbalance between these stakeholders reflects a potential trade-off between market and social expectations as presented by Garvin and Bosso [44]. However, a central principle is that the dissemination of the PPP project’s result must be consistent with rules dictated by certain PPP programs in a given jurisdiction, as the collective performance of all PPP projects determines whether the PPP program is useful as a strategy or policy for infrastructure development and management.

According to Mitchell et al. [30], urgency can be defined as the degree to which stakeholders claim to call for immediate attention. The component of urgency helps to move the model from static to dynamic. It is based on the following attributes: time sensitivity—the degree to which managerial delay in attending to the claim or relationship is unacceptable to the stakeholder, and criticality—the importance of the claim or the relationship to the stakeholder. In PPP projects, the responsibility to the claims is shared between the public and private sectors. On the one hand, it could mean that the range of arguments to influence the PPP project becomes wider. On the other hand, it limits the nature of the claim depending on the targeted focal stakeholder [10]. In general, public actor and project company may have distinct responsibilities, which are described in the contract, as so is the right to decide a particular case. This suggests possible obstacles which may occur while identifying a focal stakeholder responsible for taking action in a particular case.

A revised approach for stakeholder analysis is embedded in the concepts mentioned above of stakeholder categorization and management. By aggregating power and urgency, two types of engagement can be identified: indirect and direct.

4.2. Individual Perception of Success in the Public and Private Sector

According to Ambler and Wilson, success must be related to goals [27] which can also be conceptualized as interest and benefits gained [45]. In this context, the public sector that initiates PPP projects and private investor aligned in a project company is characterized by a potentially highest level of interest, although expressed in different ways. Public and private sector entities’ goals are reflected in the strategic planning, and implemented via investment decisions and implemented investment projects. A private entity strives to maximize the benefits for its owners. The primary evaluation criterion is then the current value of the investment or the rate of return. In the case of projects implemented by public entities, the criterion is different, as public sector entities act in association with society. The purpose is not purely economic, and the effectiveness of the public sector should be assessed at macroeconomic and macro-social levels, including environmental impacts. The criterion for decision-making is represented by ‘the public value’, which should maximize the benefits for the citizens. Public sector decisions are therefore based on complex criteria and go beyond the functional and financial evaluation of the project itself, as proved by Hodge and Greve [46]. Eventually, the evaluation of the success in PPP relates to the success of public and private entities simultaneously.

There are several related concepts relevant to the research and development of the benefits–engagement model. Trocki [47] adopted the European Union approach [48] used for the assessment of structural funds employment. The EU concept identifies different types of project effects. There are financial or physical outputs (deliverables of the project), outcomes and results, and impacts. The EU success criteria include relevance (extent to which project effects are relevant to identified needs), effectiveness (extent to which project effects are achieved), efficiency (relation between resources required and project output), utility (benefits to target groups), sustainability (durability of employed effects), and community-added value (the extent to which project output, results, and impacts occur due to project intervention). Trocki [47] uses these criteria in the context of the project, organization, and environment.

Second, the criteria of efficiency and effectiveness, and in addition, differentiation between short-term output and long-term outcome (results), are used by Dalcher [35], who identified four levels of project success. Level 1, focusing on project management success, uses criteria of internal efficiency (profitability) and performance measures relating to the budget, schedule, and scope. Level 2 concerns project effectiveness in terms of quality and acceptability of the project output concerning shareholders. Level 3 focuses on the creation and delivery of internal value from the business perspective. Finally, Level 4 concentrates on prospects relating to project gains itself but also new ventures and opportunities concerning new skills, competencies, and capabilities. This connects Dalcher’s approach with Hodge and Greve’s approach, being the third concept building the grounds for the benefits–engagement matrix.

According to Hoge and Greve [46], governments expect that PPP would deliver a wide range of benefits relating to the project and technical concerns, and even political and cultural aspects. This presents a complex challenge for those interested in assessing the value and success of PPP [46]. Hodge and Greve’s conceptual PPP model includes five levels of project evaluation: project, delivery method, policy, governance tool, and cultural context. There are goals relating to each level, and therefore the success of PPP might be judged separately at each level, which is similar to Trocki’s approach. However, the levels and objectives are often overlapping, and much of the judgment resides outside the project itself. The project level relates to the objective connected with providing value for money. The delivery method refers to the promise of providing goods or services on-time, in-budget, and within scope. Objectives of infrastructure provision without growing public debt, transfer of risk, application of the more flexible private law, and support from private businesses relate to the sphere of policy. The governance tool means improving accountability and transparency. Cultural context refers, among others, to innovation, which Dalcher broadly calls future prospects.

Finally, success perception should be based on the criteria of sustainable development, which should form the general assumption for any activity. According to the concept, only a project that respects economic, social, and environmental requirements simultaneously can be sustainable, as presented below (see Figure 2).

The above concepts support the thesis that success can be perceived quite differently by the various PPP stakeholders. The perception of success depends strongly on the scope of assessment that can be conducted from an internal as well as from an external perspective. Overall, success perception relates to short and long-term perspectives, and financial and non-financial benefits relating to economic, social, and environmental dimensions of sustainable development.

Considering the differences between the public and private sectors and their perception of a project’s success, it was assumed that PPP can bring two types of benefits: financial (economic) or non-financial (social and environmental).

4.3. A Conceptual Benefit–Engagement Model of Stakeholder Classification

The integration of the concept of engagement and preferred benefits allowed to distinguish four types of stakeholders (

Table 1. The conceptual model for PPP stakeholders’ identification and their classification. Source: based on [14].

		Preferred Benefits (Interests)
		Financial(economic)	Non-financial (social and environmental)
Engagement	Direct	Type I	Type II
	Indirect	Type III	Type IV

).

Type I and Type II are the most influential stakeholders in the PPP project. They include two focal stakeholders, who are sponsors and a grantor. The relation between them is set up via a project company. There might be other key stakeholders, too. Their influence on a PPP project is most prominent as, if their support is withdrawn, the project is usually going to fail. This situation is not likely to happen in the case of Type III and Type IV stakeholders. They include operators or suppliers who may change during the operation phase, and this does not necessarily lead to the PPP termination. Equally, resigning from services by a single consumer probably would not cause substantial harm to the project. However, a single consumer may not have enough power to claim their own needs, but a group of consumers may have enough power to claim. Generally, lenders and bond investors are grouped in Type III, although the scale of economic engagement determines their particular influence. The bigger the financing leverage, the higher the engagement and therefore the possibility of their shift to Type I. These stakeholders evaluate the project mainly regarding efficiency criterion. Type IV are media, ecologists, and unions who influence the success perception in the broadest context. They are stakeholders focused externally without a direct financial interest in the project, and they concentrate on the social and environmental aspects of the project. Governmental supervisors and regulators are also Type IV stakeholders and they evaluate the PPP according to effectiveness, durability and socio-economic impact criteria.

Therefore, only the holistic approach on the project can provide infrastructure development along the criteria of sustainable development.

The matrix allows for demonstrating how the stakeholder’s interests should be integrated into the PPP project by involving stakeholders in the decision process. The way of addressing a stakeholder’s claim depends on the position of a stakeholder. However, the presented approach suggests that a focus on the stakeholders’ attitude towards PPP success is also required. To meet sustainable criteria, engaged stakeholders should cooperate and delegate responsibilities to address those indirectly engaged stakeholders and their needs, who reveal a similar attitude towards PPP success.

5. Result and Discussion

5.1. The Underground Car Park ‘Plac Na Groblach’—A Case Study’s Results

Following the steps of stakeholder analysis [24], the context of the project must be given. The boundaries of the project are set by national regulations and local conditions based on the city transportation development strategy. In Poland, the process of implementing the cooperation under PPP was initiated in the year 2005 by introducing the Act on PPP. Cooperation with private partners started to be perceived as an attractive way of obtaining additional financing, especially for local governments. However, a vague policy of the central government, exemplified by the lack of executive acts to the Act on PPP, has deterred them from initiating PPPs. Therefore, public entities aiming to establish cooperation with the private sector had to look for other solutions. One of them was a concession for construction. The first project constructed in this model was the Underground Car Park ‘Plac Na Groblach’ in Cracow [50]. Mainly because of this reason, this project became the subject of the study.

The tender was announced in November 2005. After one year of negotiations, the City selected a concessionaire—Ascan Empresa Constructora y de Gestion—and signed the agreement in November 2006. The concession gives the private partner the right to occupy and use the car park for 70 years. The underground car park was completed in December 2009, and it offers 610 parking spaces.

The car park is located on the north bank of the Vistula river close to the most recognizable landmark of the Cracow city, namely the old city center, and Wawel Castle (see Figure 3).

A paid parking zone covers this part of the city. In Poland, the functioning of the zones is determined by legal regulation, the Act on Public Roads (Dz.U. 1985 Nr 14 poz. 60). This regulation indicates that the institutions responsible for the creation and administration of the zones are local governments. The regulation also sets the maximal fees for car parking in the zones. However, the Act on Public Roads applies only to public facilities, and therefore private owners of car parks located in the zones are not obliged to follow these legal rules. Due to the nature of the contract, the Underground Car Park ‘Plac Na Groblach’ is treated as a private enterprise with a public stakeholder.

The cooperation between the private and public partners is shaped under the design-build-operate-finance 70-year contract (DBOF). The contract includes reconstruction of the existing sports field complex, and modernization of the surrounding streets, pavements, and green squares surrounding the area of investment. The complex of the Inter-school Sports Center “West” includes technical infrastructure and is located on the top surface of the underground car park. The concessionaire and sponsor, who is Ascan Empressa Construtructora, established the special purpose vehicle (SPV) (Ascan Joint Stock Company Branch in Poland). SPV took responsibility for the design, construction, operation, and financing of the underground car park. After construction, the SPV became the Project’s Operator. This includes managing the system of tool collection, contracting services e.g., insurance, current repairs, technical audits, and energy supply, etc. Detailed terms of operating the car park are set up between SPV and the Department of Transport Infrastructure, which is an organizational unit of the local government of Cracow responsible for managing municipal infrastructure in the City. Simultaneously, in the City structures, the responsibility for operating parking zones belongs to Municipal Infrastructures Ltd., which is a municipal company. This company is responsible for providing information on the availability of parking lots and it has the right to collect parking fees. However, there is no formal contract between Municipal Infrastructures Ltd. and SPV, and they both operate within the same area. Finally, the stakeholders of the project include end-users, who are individuals and institutional clients. Institutional clients are hotels and companies located near the car park. They benefit from the available parking spaces on the basis of individually negotiated contracts. The individuals (such as inhabitants, sport facility users, and visitors) use the facility based on a long-term individual periodical fee or an incidental one-time payment. The Project stakeholders also include non-users of the underground car park. They are also inhabitants (primary and secondary neighborhood), sport facility users such as pupils, and the small businesses nearby.

The network of stakeholders of the Project includes stakeholders who are engaged in the Project directly and indirectly. The relations among stakeholders are centered but not limited to relations with SVP. There are two focal stakeholders who are the grantor—the City of Cracow, and the sponsor—Ascan Empressa Construtructora, represented by SPV. Direct engagement refers to the grantor and SPV—the recent being interested in the financial success of the investment, while the sponsor and grantor seek non-financial benefits. The sponsor is interested in implementing global strategy, value, and reputation increase for the whole company and prospective contracts due to the success of the Project. The grantor is interested in implementing the transportation policy and delivering infrastructure in time and of a good quality, thus increasing the quality of inhabitants’ life. These briefly described relations constitute the background for further stakeholder analysis. All identified stakeholders and their relations in the operational phase are presented below (see Figure 4).

5.2. Discussion

The Project sponsor (Ascan Empressa Construtructora) is not directly engaged in the Project and therefore in the stakeholder management. Since proceeding the Project to the operational phase, the sponsor has been focused on controlling the completion of established commercial goals from the global enterprise point of view. The responsibility for managing the Project rests primarily on the SPV (Ascan Branch in Poland). The SPV is responsible for arranging contracts and non-contract relations with stakeholders, including local inhabitants, sport facility users, and small businesses. At the stage of project construction, SPV guaranteed the use of parking for nearby inhabitants at preferred fees as they suffered the most from nuisance related to the construction of the Project. The SPV informs and presents offers to the individual and corporate clients, and negotiates and signs contracts with clients and other entities engaged indirectly in the project operations such as insurers, suppliers, and subcontractors. The engagement of the entities, including the Project sponsor and SPV, is on a commercial basis.

The grantor is represented by the City authorities and is responsible for formulating policy goals. The general aim of the policy is to limit the number of parking places, taking into consideration the capacity of the road network, which should lead to a shortening time of parking and more effective parking use. Above all, the policy should eliminate local street parking and make them walkable. The grantor focuses therefore primarily on the direct product, which is new infrastructure. There is less consideration of financial and technical issues of the project operational management as these issues, according to the DBFO contract, have been transferred to SPV. Simultaneously, the grantor’s focus also has a long-term perspective as the Project is a component of a complex policy that would contribute to improving the transportation situation in the City for the interest of the inhabitants. The grantor is supported in the Project by its organizational unit, which is the Department of Transport Infrastructure in Cracow, and a municipal company, which is Municipal Infrastructure Ltd. Their engagement is also indirect, and the motivation is non-financial, i.e., society and environment-related.

The local community, including residents and Cracow Interschool Sports Center “West”, were concerned that the investment would lead to an increase in parking costs and therefore the City authorities did not ban parking on the streets to prevent possible public opposition. Although being indirectly engaged in the Project, inhabitants create a powerful and urgent group of stakeholders even though they include non-users; this is a challenge, as they are non-financially motivated. Therefore, the City authority implements transportation policy and related changes gradually, so the actions hamper access to the City center mostly for those who do not live there, and prioritize the inhabitants’ needs. Therefore, the Projects would not operate without end-users paying fees for using the underground car park and the entities delivering different services such as subcontractors, suppliers, and insurers.

The classification of the identified Project stakeholders based on the attributes which have direct and indirect engagement in the Project, and financial and non-financial motivations (benefits), which relate to dimensions of sustainable development is presented below (

Table 2. Stakeholders’ categorization in Underground Car Park. Source: Own elaboration.

		Preferred Benefits (Interests)
		Financial (Economic)	Non-Financial (Social and Environmental)
Engagement	Direct	The project company—Ascan Branch in Poland	The grantor—Cracow City, represented by the City Hall
	Indirect	The sponsor—Ascan Empressa Construtructora Insurers Suppliers Subcontractors Institutional and individual clients	The Department of Transport Infrastructure Municipal Infrastructure Ltd. Cracow Interschool Sports Center “West” Community—local residents

).

The research strategy allowed to identify and describe the stakeholders, their relations, engagement, and motivation, determining success perception. This helps to understand how to construct relations to ensure the PPP project success, understood as obtaining the goals set by public and private partners. Simultaneously, the case study identifies potential challenges connected with the partnership (mainly focal partners) and the Project.

First, it is worth considering potential opportunities and threats of the Project to the local community. The residents were concerned that the investment would lead to an increase in parking costs. The gradual reduction of car traffic in the city center and restrictions for car parking imposed gradually were aimed toward citizens, not against them. Thanks to these gradual changes in the rule relating the street parking, the threat of public opposition was generally prevented. It occurred that the development and operation of the project did not significantly affect the situation of the residents living in the city center, as was previously expected. Moreover, the whole investment process made the residents more concerned about the city transport policy and its consequences for them. Although the evidence of direct cooperation between the private and public partners is hard to trace in this aspect, the local authority’s policy contributes to the operation of the car park. The operation of the car park does not threaten the interests of residents who live in the neighborhood of the car park, and the car park becomes more attractive for those arriving in the city center by car.

Second, due to the law regulations, e.g., Act on Public Roads, the public–private cooperation between the Municipal Infrastructure Ltd. and car park operator is hampered. The operator of a car park has the right to charge fees on a commercial basis; however, the rules imposing the division on public and private facilities cause the local government and private owners of car parks to provide their services separately. As a consequence, main stakeholders are not motivated to cooperate under one car parking system in the city.

Third, the evidence of direct cooperation between the private and public partners in this Project is also “blurred” in the sense that the SPV company has been developed solely by the sponsor and the grantor representation has been fragmented by the engagement of two public entities. The local government is a concession grantor and the signature of the DBFO contract and is co-represented in the PPP by both an organizational unit (Department of Transport Infrastructure) and municipal company (Municipal Infrastructure Ltd.). Although the SPV structure gives benefits such as risk transfer (for instance market risk or financing risk), and in the situation of purely private SPV, also risk-avoidance (for instance in reference to moral risk), the concentration of responsibilities in one entity, which is one of Project Finance and PPP, has the most important advantages [51], and the local government engagement has been fragmented in this Project. This may raise the risk of losing control.

To summarize, the stakeholder analysis proved that PPP projects do not have to be treated as joint cooperation literally. This case study provides evidence that finding a balance in the cooperation of public and private partners could be considered as an important factor of successful stakeholders’ management. The car park project is specific, too. The private partner retains the financial and technical responsibilities of a car park operation, whereas the city handles all the organizational tasks relating to the recognition of legal and political frames, pays attention to environmental risks, and takes responsibility for the policy and its acceptance by the citizens, all of which are critical for successful project preparation, realization, and operation. Nevertheless, the legal environment, including implemented regulations on PPP, and multiplicity of legal provisions relating to the actives undertaken by local governments (e.g., Act on Public Roads) impede the cooperation between the stakeholders, as is exemplified by the operator of city parking zones.

6. Conclusions

Since the introduction of cooperation under PPP, there are many successful projects as well as failures. Only approximately 30% of PPP projects in Poland are implemented [13]. The development of PPP literature has followed the growing experience in public–private cooperation. Currently, scholars tend to stress that the motives standing behind PPP can be highly polarized and PPP can no longer be perceived as just a solution to acquire additional capital that could satisfy everyone in an equal way. Due to these reasons, this research tries to offer a descriptive stance and to identify the main stakeholders in PPPs, examine their engagement in PPP, and define stakeholders’ success.

The article was based on stakeholder theory, which indicates that there is more than one approach to project management and puts into light the importance of meeting stakeholder needs [52]. The conducted literature review reveals that the problem of joint cooperation between the public and private sector still requires stakeholders centered analysis. At the same time, growing research interest in project success and more specifically the perception of success by different stakeholder groups can be observed. This research approach combined two main ideas, which are the perception of success in the public and private sector, and stakeholder engagement. A conceptual benefit–engagement model for a new interpretation of stakeholders’ identification and classification in PPP projects was proposed, which was then verified via a selected case study of a unique infrastructure investment taken from Cracow in Poland—a country characterized by development success in recent years.

The findings identified apparent discrepancies in the perception of PPP success between main PPP stakeholder groups, which can be classified into four groups (research question 1). Stakeholder Type I and Type II are the most influential in the PPP project. They include two focal stakeholders, who are sponsors and a grantor. Generally, lenders and bond investors are grouped in Type III. Type I and III evaluate the project generally based on its profitability. Type IV are stakeholders who perceive success in the broadest context. They are stakeholders focused externally without a direct financial interest in the project. Type IV evaluates the PPP according to socio-economic criteria, long-term impact, and creating future opportunities.

This benefit–engagement classification, including the polarized goals of different stakeholder groups, justifies evaluating PPP project success as a whole. Through the use of the benefit–engagement model, public and private partners will be able to be more aware of who the stakeholders are and what the relations between them in terms of engagement and interest (research question 2) are. This will lead to more informed decisions, precision in their choice of project, and help in successful PPP delivery.

The criteria of benefits and engagement show how different stakeholder groups perceive PPP success (research question 3). The model distinguishes financial and non-financial benefits, which can be gained in the short and the long-term, and which became criteria for success evaluation of the sustainability of the project. The second dimension of the conceptual model is engagement. Engagement incorporates the attributes of power and urgency. Power refers to the ability to influence the definition of the project [30], and access to critical resources [43]. The urgency is defined in the model after Schepper et al. [10] as a degree to which stakeholders claim to call for immediate attention. This benefit–engagement model can be a tool for early and joint stakeholder management supporting individual motivation and attitude towards success, especially about, but not limited to, focal stakeholders.

The Underground Car Park case study confirms that a proper allocation of responsibilities between directly engaged stakeholders can cause uninterrupted cooperation with other indirectly engaged groups focused on two different types of benefits (financial or non-financial). The grantor—Cracow City—represented by the City Hall at the early stage of the project addressed the needs of the local community and other local organizations, whereas, during the operational stage, the stress was laid on addressing stakeholders focused on financial benefits. During that stage, the leading role was assigned to the project company. However, the City Hall still played an important role because it is responsible for shaping transport policy in the City. As a takeaway for practice, the research proves complex relations between different stakeholders and the diversity of PPs in terms of place and time. It is a prime issue especially for economies under transition, which are still gaining knowledge in the area of the management of and for their various stakeholders [53]. This research proves that only a holistic approach to PPP can lead to sustainable development, as only then does it cover economic, social, and environmental criteria. The success of the PPP project as a whole is then achieved when all stakeholders receive their benefits, which would simultaneously confirm the project’s sustainability. Finally, the study proposes a background for further research on PPP success and important stakeholders groups of PPPs and their understanding of PPP success. By addressing these aims, a greater understanding of how PPP success dimensions can be measured and managed can be achieved.

The main limitation of the study arose from the broader need for empirical validation of the presented conceptual model. Although observations are made over a selected case study within a limited period, and the context of the analysis and stakeholder perception may change according to the dynamics of stakeholders, the research has a particular strength relating to its prospective dimension. It offers compelling evidence that stakeholder management is difficult under the best of circumstances, and becomes even more challenging in the presence of varying interests. Future research could consider characteristics of specific country circumstances and specifications of different types of PPP projects as the need to adopt a more stakeholder-oriented perspective in project management results from many participants involved, but also from different PPP forms, contracts, and country traditions.