Developing dispute resolution policy for conflicts settlement in public-private partnership (PPP) projects in educational institutions

• Lack of institutional framework

NUC fails to institute clear guidelines for project tendering, evaluation, and award subject to the uniqueness of educational institutions. The individual university was left to the discretion of the procurement process resulting in imprecise procedures and, unequal terms and conditions. The existing guidelines of the Infrastructure Concession Regulatory Commission (ICRC)¹⁶ for PPP procurement have their limitations and are unable to address issues in PPP contracts of educational institutions.

• Lack of expertise involvement

At the inception of policy development for UHDM, NUC fails to seek expert opinions that will facilitate an all-inclusive operational template for the adoption of the PPP model upon the peculiarity of the educational institutions.

• Inexperience of the stakeholders

It was observed that many of the private investors as well as the procurement authorities (university management) lack cognate experience in the operational procedures of the PPP model. This condition fragmented the focus of the stakeholders.

• Poor documentation

Documentation of PPP procurement processes and other proceedings are not considered. The importance of proper documentation is to serve as a reference and to allay controversies that may result from a misconception of ideas and conflicting interests of the stakeholders.

• Over expectation

The NUC initiative and policy for adopting PPP raised the expectations of both the private investors and the procurement authorities (university management) beyond the attainable level. The expectations of the stakeholders on the socio-economic benefits continue to skew downwards due to unrealistic targets instigated by the policy.

• Lack of modality for risk allocation

NUC policy on PPP adoption is silent on the modality and the strength of equitable risk allocation. Comprehensive risk assessment of PPP contracts there is essential to unbiased risk sharing among the stakeholders without a template. Thus, inequitable risk allotment provokes disputes in PPP contracts.¹⁷

• Indirection of MoU on conflict settlement

The content of the PPP contractual agreement or MoU must be all-inclusive. No aspect of the operational theme must be left out. Contrary to this opinion, the NUC policy on PPP failed to capture procedures for conflict settlements that can hinge on specific DRMs among other lacunae. In other words, the adopted MoU is clumsily devised by excluding strategies for dispute resolution. The unavailability of conflict resolution procedures is an alarming factor generating debriefing/termination of contract briefs, thereby clogging private investors’ participation and successful delivery of PPP projects in public universities.

• Identification of causes of dispute

In anticipation of operational intervention, understanding the root cause of the contractual dispute is crucial.^19,20 Based on the Pareto principle,²¹ the author discovered that 20% of the factors instigating disputes in PPP contracts in public universities are significant while 80% of the causes are negligible. The result in Table 1 was elucidated based on the responses of the participants to five-point Likert scale questions, and the analysis done to determine the mean values of the variables.²² The table reveals the fundamental causes of dispute that necessitate earnest responsiveness of the NUC policy to developing a framework for preventing or settling PPP contractual conflicts.

The following causes of dispute are coded as CD19, CD3, CD 22, CD20, CD13, CD14, CD1, CD11, CD2, CD4, CD27, CD23, CD8, CD6, CD26, CD10, CD12, CD25, CD5, CD24, and CD7 are more differentiated among the 27 bases of conflict as indicated in Figure 2. The NUC policy ought to develop an underlying set of ideas to draw inferences from these chronological causes of dispute. This process will inform the utilization of workable dispute prevention strategies as well as the adoption of DRMs that are perceptive of the peculiarity of PPP contractual disputes.

• Conflict prevention strategies

The advantages of preventing PPP contractual disputes are numerous. The cost of unprevented dysfunctional conflicts over the project delivery will leave stakeholders with immeasurable losses. It is rational to avert conflict than to pursue a resolution mechanism given that might not be cost-effective. The dispute resolution process will involve the consumption of resources (time, money, and energy) while the dispute prevention strategy will neutralize potential causes without snowballing.

Conflict prevention strategies are not contemplated as essential tools for avoiding disputes among the participants of PPP contracts by the NUC policy. However, the perspectives of 96 respondents on 13 dispute prevention strategies listed in Table 2, and the description of Figure 3 were rated on a five-point Likert scale. The relative importance index (RII) was used to rank the variables. The result suggests a sequential movement of engaging the prevention methods. This serves as a pointer for NUC policy amendment.

• Dispute resolution mechanisms (DRMs)

The dispute resolution mechanisms materialize where dispute prevention strategies are unproductive.²³ The choice of DRMs in settling dysfunctional disputes pivots on the analysis and the determination of three elements namely: familiarity (in terms of stakeholders’ awareness), frequency (in terms of DRMs constancy), and effectiveness (in terms of DRMs’ problem-solving capability). Figure 4 encapsulates stakeholders’ perceptions of seven DRMs accessible for dispute resolution in PPP contracts. In this regard, the NUC policy will be proactive by giving priority to mediation/reconciliation while deploying DRMs for PPP contractual dispute settlement. However, the policymaker must be conscious of the peculiarities associated with PPP concessions in educational institutions.

• Values and beliefs

The dispute systems experts have argued that effective conflict management systems should be expansive, but priority should be placed on collaborative problem-solving, with ‘rights-based’ processes only brought into play as a last resort.^25–27 Therefore, for any conflict management system to be productive, the respective rights and interests of all parties must be given priority. In other words, the stakeholders should be engaged in consensus-based processes that are responsive to various concerns as it affects individual values and beliefs.

• Structure and roles

Establishing pertinent administrative and decision-making principles will strengthen DRMs in achieving the desired result.^15,24 Among the guidelines or roles necessary to make DRMs workable are; swift responses to settling conflicts as they occur, adoption of multi-layered series of measures to resolve disputes appropriately, promoting the continuity of the stakeholders’ cordial relationship to ensure the steady running of the project, transparency, and accessibility must not be lagging in the implementation of DRMs for dispute settlements, and all the required resources such as manpower, time and money should be readily available to make DRMs function effectively.²⁸ However, by institutionalizing these principles, the distinctive nature of the PPP project should be taken into cognizance as it affects educational institutions.

• Procedures

The resourcefulness of DRMs lies in the range of approaches and procedures designed as the strategic inputs to ensure resolving the issues bother on the stakeholders’ differences. It is important to ascertain that justice, fairness, predetermination, preannouncement, consistency, and transparency take precedence in setting up DRMs procedures to arrive at all-inclusive decisions or resolutions acceptable to the conflicting parties.²⁷

• Skills and behaviours

The problem-solving skills of the DRM facilitator and attitudinal dispositions of the conflicting parties to the choice of DRM in settling the dispute will determine the success of the mechanism adopted. Understanding the contents of the dispute by the problem solver will pinpoint the suitable DRM and help obtain a satisfactory settlement for all the participants.²⁴ Problem-solving techniques also required a dispute settler to possess strong behavioural and social skills that encompass good communication and persuasion skills. The possession of these skills will add an informal dimension that allows prompt resolution of disputes with little or no dependence on formal procedures.

• Explicit institutional framework

The practicability of PPP concessions depends on a robust institutional framework.²⁹ As it has been observed that the NUC policy lacks operational structure, it is, therefore, necessary to expedite clear guidelines for tendering processes, prequalification exercises, and standardized contract awards. A PPP administrative unit (PPP-AU) that will be specifically saddled with the PPP contract procurements should be established at each public university engaging PPP concessions. The unit will have adequate representation of all parties. The responsibility of the unit shall include the monitoring of every activity connected to service delivery and stakeholders’ contract relationships. In this regard, all potential dysfunctional disputes can be put in the spotlight, and the appropriate prevention measure can be taken, or where seems to be a possible escalation, a proactive DRM will be implemented to deter the degeneration of contract performance.

• Involvement of PPP expertise

In every undertaking, expert opinions are essential where novices are challenged by the grey areas.³⁰ Regardless of the far dated start-up period of the NUC policy on PPP concessions adopted by public universities, it is certain that the initiative (UHDM) is yet in its formative years given the absence of definite DRMs. This scenario is also responsible for the inability to surmount challenges accrued to contract disputes. Therefore, the policy must amplify the constitution of a think-tank at the centre. The think tank will serve as a central advisory board with its membership drawn from all categories of professionals in the construction industry and legal practice. This board will liaise with the PPP-AU of each institution from time to time as oversight functions. Any contract dispute rebutting PPP-AU interventions will be successfully managed by the central advisory board.

• All-inclusive Memorandum of Understanding (MoU)

The importance of contract agreement or MoU in PPP concessions cannot be overemphasized. The articles or clauses guiding the rights and responsibilities of each participant are asserted in the MoU. Similarly, the scopes and or limitations of the concessions are equally affirmed. Since the NUC policy is silent on having a holistic template of MoU, each university resorted to a unilateral PPP agreement which is myopia about dispute resolution among others. Therefore, solving this shortcoming is long overdue. It is an urgent responsibility of the NUC to develop a unified dispute-resolution policy that will be integral to the MoU intended for the regulation of PPP contracts in educational institutions.

• Mandatory PPP project feasibility study

The policy should emphasize project evaluation as a prerequisite to PPP contract award. The over-expectation of private investors is influenced by the quest for profit maximization. On the other hand, the procurement authorities will want to forestall any cutthroat profitability that can negatively affect the interests of the end-users of the PPP infrastructure. To prevent disputes related to the stakeholders over expectations, the execution of feasibility studies must be compelled on the parties through the policy.³¹ Thus, the feasibility study report will set the limit for the expectations of individual participants, and the potential disputes in this regard will be avoided.