The Importance of Stakeholder Management in Projects

Write about the Stakeholder Review on Mangawhai Community Wastewater Scheme.
 

The Mangawhai community wastewater scheme is a project that was implemented for wastewater treatments and sewerage system. The project was managed and owned by Kaipara District Council (KDC) between the years 1996 and 2012. The planned execution of the Mangawhai community waste water scheme was through a public private partnership but later changed to a service provider who still worked under the PPT arrangements.  The owners of the project were motivated to transfer risks to third party and to keep debt off the balance sheet.  The auditor’s report on the completion of the project revealed several weaknesses including relating to tendering processes, project costs and governance issues (Burke, 2013). The management of the project is reported to have relied totally on the advice of experts in all key decisions that were made in which others were misleading. There were several stakeholders taking part in decision making that contributed to significant risk to the project.

The auditor’s report further mentions a key problem of the project was on the way information was share and communicated to relevant stakeholders. In other instances there was no clear communication mechanism that was employed to provide required information when it was required (Gido & Clements, 2014). The report did state that there were no proper consultations were conducted on the legal, technical, and social benefit of the project.  The auditor identified some of the governance and management problems in which could have been avoided if proper consultations could have been done. The Wastewater Scheme has led to major significant concerns raised some emanating from the community on the nature and the cost of the project. The community has continued to raise questions regarding how its financial structure was arrived at, some of decision making process, total costs that were used to execute the project, and information provided to the required parties (Hedman, 2013). The current report will be seeking to complement the auditor’s findings by establishing the extent to which stakeholders were involved in the entire process. That will provide necessary information to justify the contribution of stakeholders in management and governance of the projects. 

The stakeholders are key components of any process this is because they represent individuals or institutions with direct and indirect contact with the project (Bourne, 2015). Projects require stakeholder management to be carried out through a stakeholder analysis process. Stakeholder analysis involves a process of identifying different stakeholders directly linked with the project (Heagney, 2016). For the Mangawhai waste water project there were two types of stakeholders: members within the project and others external to the project. The members within the project are those involved with execution and management of the project while external members are those affected by the performance of projects (Ferguson, Brown, Frantzeskaki, Haan & Deletic, 2013). The auditor’s report included an assessment of different members related to the project in order to obtain their views on how the project was managed and executed. Interviews and forums were conducted to each of the members to seek their opinion on the extent of the problem (Dibrell, Craig & Neubaum, 2014). Each of the stakeholders identified was able to give necessary information that was used for the project.

Stakeholders Involved in the Mangawhai Community Wastewater Scheme

The findings of the report conducted by auditor majored on the role played by external agencies towards the project outcome. There were several stakeholders that were involved with the project they included: KDC, community, legal representatives, Auditors (New Zealand), office of the Ombudsman, Northland regional council, Ministry of conservations, technical teams from the state departments. Each part had a role in ensuring success of the project. The report will be seeking to review each type of stakeholder and their role towards the final outcome of the project (Felix, 2013). 

The community was among the key stakeholders in Mangawhai wastewater project who represent users and beneficiaries of the project. Implementation of any project requires that community to be consulted on the need of their project. The consultation process was focused on establishing whether the wastewater project was necessary for it to be implemented as per their needs (Heagney, 2016). The auditor’s report showed that other several people of the community were suggesting a better and different way of management of waste should have been done. One of their suggestions was to have strict rules on management of septic tanks. The essence of having the strict rules is that it will help to manage the environment and to be compliant (Lock, 2014). It was further noted from the members of the community that KDC had imposed the project to them. The findings on the community clearly affect the outcome, ownership and sustainability of the project among community members. But although the community was not fully involved in selecting the project the construction of the project was exonerated by the auditor’s findings that Mangawhai needed a centralized reticulated wastewater scheme to mitigate the problems. 

The preferred report documented in April 1999 regarding consultation with the community noted that land based disposal was highly preferred over the current treatment using on-site disposal. They argued that the method was feasible and their concerns were supported by the regional council. Later Beca sent out newsletter on the implementation of the project giving out current flows estimates to the members of the community seeking feedback. From the feedback it showed that majority are supporting the centralized waste water treatment system but are fearful on the affordability of it (Walter. Armstrong & Wallance , 2001). Findings reveal that although the members of public were involved during initial planning of the project but their main concern of cost were ignored by the implementing parties.

Role of the Community in the Project

Other stakeholder involved with the project was the Northland Regional council a body concerned with investigating issues related to the scope of the project. NRC conducted the studies in 2001 and identified and confirmed water quality problems. The NRC took a major role in justifying the project execution by providing findings on water contamination levels warranting site sewage water treatment and disposal systems. That was complimented by the service provider engineer who concluded that in Mangawhai village the absorption fields are too ineffective and unreliable for disposing affluent. In terms of expert opinions and consultations the project was able to pass the required test to justify its implementation (Pinto, 2014). The required stakeholders were consulted and relied upon to ensure that the project is implemented. The reliance of experts during the initiation process was exonerated on the basis of correct decision that was made as per the auditor’s report. KDC conducted their own study and also relied on the expert findings which led them to implement a centralized treatment wastewater scheme.

KDC on the other part contributed to project problems through its contractual management inefficiencies. There were no proper consultations with the relevant parties on the suitable contracting method (Phillips, 2013). The method chosen to deliver the project was flowed because KDC focused on the cost and not on the delivery of the project. KDC were concerned with reducing costs forgetting other useful metrics that defines project outcomes and performance. Procurement experts could have been consulted to provide the best alternative method of evaluating suppliers or service providers. Procurement experts should have been part of the stakeholders of the project. The contract management problems were reflected when KPC delegated all the responsibilities to executing team forgetting they were supposed to carry out an oversight role of the project. Findings showed that nobody within the KDC was directly responsible for the project. Delegated responsibility is suicidal in project delivery because it lacks necessary accountability. Consultations should have been done with relevant stakeholders on contract management and related policies that could have eliminated any contract related risks (Dibrell, Craig & Neubaum, 2014). In terms of funding KPO did well by consulting a financial consultant. The individual provided the current status of the project and justify the method that can be applied factoring the future. A private public partnership (PPP) hybrid in which KPO acting as a community agent was adopted and a plan created.

In terms of project delivery methods and techniques auditor’s findings showed that there was no suitable consultations that was done with relevant stakeholders. Different methods were outlined by implementing body to be performed but none was settled upon (Kloppenborg, 2014). Beca a service provider company was given the task to advice on how the project would be managed and executed. To support further information sharing a community advisory group was constituted to provide advisory decisions on the PPP options.  That was complimenting what the financial adviser and KDC officers had pointed out in their concerns that decisions need to be conducted interactively. Through an open tendering process Beca was settled upon and awarded the contract. The awarding of the contract was based on Beta initial involvement and experiences in construction management and water related solutions. Later Beca announced that a consortium of three Australian firms will form part of the project team. KPC on the other hand decided to form a project steering committee to oversee the implementation of the plan. But although the committee was formed there were no evidence of any responsibilities or agreed terms of reference for them. That showed that project steering committee was given a raw deal in the process. 

Role of External Agencies in the Project

A community liaison group formed another kind of stakeholders which was constituted in order to provide information and project status to the members of public. It was a good initiative in involving and communicating to the key stakeholders in the process (Larson, 2011). But as per the findings it only happened during the initial stages years. The years that communication took place were 2001-2002 through monthly reports, and copies of meetings. But the practice thereafter ceased completely no communication took place henceforth. Lack of information sharing and communication was a good indicator of deficiencies in stakeholder management in the project (Kendrick, 2013). Other teams involved in consortium by Beta firm included firm from New Zealand and Australia. The companies include: North power, Fletcher construction, Earth Tech engineers and Simon engineering. The consortium firms were expected to provide specialized skills and increase performance of the project in terms of delivery. One notable finding including stakeholder management was the public meeting that was conducted by several stakeholders before negotiation was done with Simon Engineering Company that was helpful in clarifying certain project elements.

There were several concerns that were reported from general communication with the community (Chen, 2012). Many of the concerns raised were on the tendering process but whatever was done during the initiation and planning phases of the project was good and useful. Ratepayers were other parties included in project management and suggestions. From letters obtained from them they wanted the tender process suspended and system designed with local communities. A special council meeting in Mangawhai clarified on the findings of the ratepayers on the best solution to the tendering process. The public meeting clarifications originating from public meeting with several stakeholders outlined concern whether to contract out wastewater treatment services with sector providers. During the implementation of the project the council did not consult various parties on the scope and increased capital costs.

The project team did not take advantage of Victorian state government guidance to ensure that good project and contract governance and monitoring is done. The public entity could have been a representative that would have ensured project management and major decisions are executed as part of expertise. KDC was lacking suitable mechanism to communicate with consortium of external project managers that provided extra risks to the project despite Beca providing a structure that was not utilized. Communication with stakeholders was important during management, budget and planning purposes (Hedman, 2013). In terms of work delivery KDC council councilors and staff were interacting well and executed functions well. The use of workshops and meeting were useful avenues for transmitting making information and decisions. Involvement of consultants was another challenges because they refuse to provide documents on the basis they are protecting their intellectual properties (Chapell, D & Dunn, 2015). 

Role of Consultants in the Project

Conclusion

Stakeholder management involves a process of analysis each stakeholder with different stakes they offer to the project. In the wastewater project stakeholder management was done but was not part of the project management process. Each of the stakeholders in the project were contacted and consulted to provide the required information. KDC was able to contact several indirect and direct stakeholders to the project. It was reported that some of the opinions provided by the stakeholders form part of the decisions while others were ignored. The case study provided different methods that were used to communicate with the stakeholders for example public meeting, workshops, and written reports. Lack of communication plan is another failure that was established in the case study. The communication plan could have specified the type of stakeholder, the nature of information communicated, frequency and mode of communicating to the stakeholders. That was evidenced when community advisory group was formulated to provide necessary information but in the end the information delivery was not executed. Some of the wastewater project failures emanated from stakeholder related risks that contributed to failure of the project.

Stakeholder management is important in mitigating risk related to projects. Future projects should learn from the Mangawhai wastewater project learning experiences of managing different stakeholders. There are several positives and negatives that can be learnt from the project. Implementing groups need to formulate a communication plan after they have carried out stakeholder analysis. In addition a stakeholder register need to be documented to establish the nature and levels of each stakeholder that will enable easy management of stakeholders. 

References

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