The success of a Building with Nature program depends to a large extent on the ability to build organisational and contractual arrangements which support the realisation of BwN-type projects. To provide guidance in achieving such, the following questions are addressed:
The contracting phase is preceded by activities such as seeking opportunities for BwN, putting it on the agenda of relevant stakeholders, building relationships and trust, and collective learning (see sections on networks and knowledge). These are all voluntary activities by separate legal entities, and the boundaries around participating groups are fuzzy. The ultimate proof of the pudding is in pro-actively organising the project environment, such that the results of all efforts can be harvested. In the realisation phase important resources such as finance and space will be committed, and so the aims, inputs and responsibilities need to be formalised. Therefore, attention should be paid to an appropriate 'realisation framework'.
The guidance is structured as follows:
Involving stakeholders and entering a dialogue with them, as is described in the section on networks, is already a great start of a 'good governance' approach. In the scoping and agenda-setting phase this may not be very systematic; therefore, in the realisation phase it is helpful to use the 'good governance building blocks' of the Dutch Water Governance Centre (WGC) as a checklist in order to repair potential gaps.
Good water governance is defined as governance that leads to effective, efficient and sustainable water management, to achieve the desired results in the control of water pollution, the prevention of disastrous flooding, and the effective, efficient and well-balanced dealing with periods of water shortage (Havekes et al, 2016).
The Building Blocks for good water governance (Havekes et al, 2016) have been developed to assist Dutch engineers, consultants and scientists in developing water projects abroad in an effective and legitimate way. General principles of good governance are applied and steps are proposed to include local knowledge and prevent social barriers like distrust from arising. The basic questions are in the table below. In the references list the full document can be found.
Procurement is a process of finding and acquiring goods, services or works from an external source. Procurement comprises more than just buying stuff. With mass products or simple services such as a taxi drive, the contact between buyer and seller can be very short. A process of procurement is in place when a prolonged buyer - seller arrangement is the aim, when it concerns a service or a product that is still 'invisible' at the time it is bought, and when larger sums of money are at stake. The process is used to ensure the buyer receives goods, services or works at the best price-quality ratio.
Procurement can be business-to-business or business-to-government. In the case of BwN, it is practically always business-to-government. Public bodies often define processes intended to promote fair and open competition while minimising risk, such as exposure to fraud. Governments also make (sometimes mandatory) use of economic analysis methods such as cost-benefit analysis. Where risk is involved, either in the costs or the benefits, the concept of best value will often be employed.
Governments have to follow an open tender process when they outsource works and contracts. The rules, procedures and requirements for this can be traced in national legislation. The bid process typically includes prequalification or integral qualification criteria, including technical and organisational qualification for similar work and financial eligibility, expressed in terms of total turnover. Such rules that frame competition and determine who is eligible influence the line-up of private parties interested in tendering, such as consultants and contractors. Often a consortium of organisations is called for, to convince authorities that the best value can be delivered. This also leads to high entrance barriers and doesn’t stimulate the development of a BwN-market.
In the project implementation phase BwN becomes concrete. The definition of tasks and responsibilities in projects is of crucial importance since this defines the domain in which procurement and contracts have to be organised. Traditional procurement focuses purely on competition, which is suitable for simple and standardised projects with low uncertainty. However, BwN projects involve complexity and uncertainty. Procurement aiming for collaborative schemes, in which it is expected that relationships between project participants will be encouraged, can improve project outcomes.
So if BwN changes project settings, it is important to understand how.
Inevitably, the question needs to be answered how to deal with procurement and contracts if a project is to be realised in an environment with reshuffled tasks and responsibilities while embracing BwN.
This section gives guidance on the case by case application of the redefined procurement and contracting procedures. It is written for all parties that can be involved in a BwN process: a government that needs a BwN type of solution; contractors, NGO's and research institutes aiming to develop BwN projects further and consortia or project developers who just stepped into a BwN project.
This Guidance section addresses the following topics:
Not all projects are realised through regular competitive bidding by contractors; especially in the phase of technology development, a test bed is needed in which contractors, research organisations, governments and/or land owners cooperate. Together they work on a new technology that may solve a problem in their environment, but may also help out in other locations. Because of this wider applicability, higher scale governments such as a national government or the EU may be willing to invest in it. The project will have a smaller scale and will be accompanied with a relatively large research component for monitoring and modeling. Because of novelty, the risk of failure is also present, as well as the chance that adaptive steering is necessary. Such risks can be contained with specific agreements between involved parties, for example a bandwidth within which the technical solution will be regarded as a success; the measures taken when the technology does not perform within that bandwidth; and a decision structure (a committee) that can take action in the case of unforeseen developments.
Innovative organisation of procurement and contracts
The reshuffling of tasks in BwN projects compared to traditional procurement processes call for a redesign of the setting in which project realisation takes place, such that the partners involved in a BwN-approach can rely on a relatively long term security of the arrangement. It means that both authorities and private organisations have to be willing to rethink their roles in the process, to think differently about how they can make best use of each other's competences and resources, and to act differently in their new roles. Possibly, contractors (hired for design & construction works) will also play a more substantial role during the initiation and planning phases, or during to operation and maintenance phase (Design, Build, Finance and Maintain (DBFM)-contracts). This has implications for the enabling procurement and contract types.
In practice, two upscaling strategies to meet the qualification criteria are observed: the formation of substantial main contractor - sub-contractor consortia, in which the ex-ante assessment of the subcontractors is often weak, or a joint ventures of small ineligible sub-contractors seeks for a big main contractor. Another form of contracting are the so-called Public-Private Partnerships (PPP). These arrangements concern long term cooperation between one or more governments, private companies and sometimes also NGO's.
Organise procurement pro-actively
It is important to understand the relevance of pro-actively organising the procurement model.
Types of procurement
The three main types of procurement can be ordered from conventional to innovative:
Generally speaking the first model is still mainstream, the second model is regularly applied and the third model is considered as novel. BwN can be used in all three models, but flourishes best in the third model.
The second and third type of procurement are meant to mobilise the competences and innovation-power of the private sector. Governments do this by focusing upon the desired output and organising a balanced cooperation process including the private sector. The desired output, goals and ambitions, are expressed in functional terms. The arrangement assumes that responsibilities allocated to the market enable the private sector to develop more effective and efficient input. In most cases the actors from the private sector are contracted for a substantial period to design, build and/or to maintain (so called Design-Build-Maintain contracts - DBM contracts). Lately this often also includes finance (so called Design, Build, Finance and Maintain contracts DBFM contracts). This should lead to added value, projects of a better quality at an identical price or identical quality at a lower price. An additional argument is that private financing also might up speed realisation.
Competitive bidding is not the only way to realise BwN projects: see also the pre-competitive arrangements and the Public Private Partnerships.
The procurement process
In the third generation model the procurement process includes three phases:
The third generation procurement type aims to cover the complexity of infrastructural projects, because they always need to be tailored to a specific physical situation: water and soil conditions, a built or non-built environment, a historic or dynamic landscape. Consortia need to qualify on the specific types of expertise required and on their responsivity to the local needs. In BwN projects, an extra dimension is added to this complexity, namely fitting a project in the social context. Actually it is the question if the third generation of procurement is advanced enough for BwN projects.
In regular projects, the authorities will aim towards ownership of the land on which they want to develop the project. Land is bought from the owners, and if they do not cooperate, they will be disowned in a legal procedure. This simplifies the social context significantly. In BwN projects, this often is not the strategy; instead, cooperation is sought with the existing owners, such as farmers, nature organisations and governments. This is a process that implies a lot of communication and trust-building, as can be read in the Networks section of this website.
Looking back at the first step of the procurement procedure (preselection), it is hard to imagine that three (or fifteen) consortia are trying to build up such a network in the surrounding area of a BwN project. Likely, one or more government bodies will take the lead in investigating the problem and the potential solutions, and they will hire consultants, designers and engineers as they go for different parts of the work. To function with success, the experts that are hired should not only listen to the organisation that paid them but also to the wider network around a BwN project. A failure to incorporate legitimate wishes of relevant actors may delay the project significantly.
The process can be time consuming, and several ‘loops’ may be required. If a deadline has been set, the decision makers may be seduced to ignore a few actors whose cooperation is also needed in the end. This will destroy trust between local actors and if the disadvantaged parties go to court, it may also seriously delay the project. Avoiding such a time trap requires starting the procedure early or avoiding strict deadlines.
Effective management of procurement and implementation
Managing the process described above requires:
Feasibility of innovative procurement
Some further issues to take into consideration:
Further information on these topics can be found on Project phases Planning and design.
Dealing with stakeholders in the implementation stage
As is explained in the section on Stakeholder network management, both support and opposition can be expected from people and organisations who may be affected by a BwN project. Scanning the social environment for relevant stakeholders is part of the initial phases, however, in the realisation phase new actors can become relevant. A systematic actor identification scan (Enserink et al, 2010) can help to identify new stakeholders who may need an adapted communication strategy:
In a stakeholder involvement strategy, it is advisable to have an open attitude to all stakeholders (i.e., for legitimacy it is unwise to try and lock stakeholders out); however, it is not necessary to actively involve all stakeholders. Power and interest are two main factors with which the most important stakeholders can be selected. Power (or influence) refers to the resources that actors have with which they can influence the decision on a BwN project: financial resources, land ownership, legal decision making power (e.g. on a permit), etc. Interest refers to the potential impact a BwN project can have on the activities and livelihoods of actors. Questions to ask about these two factors are:
Typically, there will be actors who have both power and a high interest; and these are the ones that absolutely need to be involved (‘Players’). In most cases, it won’t be hard to convince them. There are also actors without power, but with a high interest, for example, individual citizens living near a project (‘Subjects’). And there will be actors who have power, but a low interest; for example, a government seated in a distant location (‘Context setters’). Including these two categories will take an extra effort; but excluding them will be a risk for the project. For a conscious assessment who to involve actively, actors can be positioned on interest/ power gradients ore more simply an interest versus power grid (see figure). Thus four categories are created for which generally the course of action is:
Organising an effective process of actor involvement is not easy. This is illustrated by the fact that a rather cynical description of citizen participation, the famous Ladder of Participation by Arnstein, from 1969 is often still valid today.
Even though stakeholder participation is still difficult in practice, many methods for public participation have been developed and tried. Some useful resources and overviews can be found in the references section.
Stakeholder involvement does not lead to an ever expanding list of people who want to be involved in the decision making. Instead, it generally has the shape of a rugby ball: first the number of parties involved is only small, in the next phases it expands and towards the end of decision making it converges again to a small group of organisations who take the final decisions and provide the funding. The rugby ball model can be used to convince people who prefer to involve as little stakeholders as possible (out of fear that no decision can be made at all), to widen the scope.
Due to the fact that innovative procurement and contracting is still nascent the examples given below are of a descriptive nature. Each example includes a link towards documents that include analysis of the case or guidance for handling of similar cases.
The port of Melbourne is a city port in Melbourne, in the state of Victoria, Australia. The Port of Melbourne is the largest cargo port in Australia. The Melbourne Channel Deepening Project has been initiated by the Department of Infrastructure of the Victorian government, to allow larger ships to enter the Port of Melbourne. Without deepening the port would have become the shallowest port in Australia, as the ports of Adelaide, Sydney and Perth have already upgraded their entrance channels. The port could thereby lose its strong position of being a main node in the network of maritime shipping.
The project is located in Port Phillip Bay, a large but shallow bay, connected with the Bass Strait through a small entrance. Through this entrance runs a deep (80 m) canyon, the remains of the former Yarra river bed. The city of Melbourne has spread around the bay. Due to this position the project is subject to engineering, environmental and social concerns. Deepening the bay’s entrance had previously been done by destroying the rocky sides and pinnacles of the canyon using dynamite. Due to the environmental implications of this practice, this was not considered an appropriate method. A new technique that is able to remove hard rocks while dealing with strong currents had to be developed during the project development. Another open question at the start of the project was how to deal with deposition of dredged material, and especially the contaminated material from the Yarra River. The proposed project plan also had to deal with ecological concerns, such as invasive species, coastal erosion, dredging plumes, the ecosystem in the canyon, and the health of the two penguin populations. The high human population around the bay also asks for considerations as the bay is heavily used as recreation area and as means for a living. Users of the bay, such as divers, boaters, commercial- and recreational fisherman are all concerned that their livelihood will be destroyed due to the dredging program. All these concerns have to be integrated in the project planning and design.
The Melbourne Channel Deepening project is not a pure example Building with Nature case. However, it addresses some design- and governance characteristics that can be used to understand enabling and constraining conditions for Building with Nature projects. Firstly, the Port of Melbourne Corporation entered into a 'partnership' with Boskalis. This partnership, that was based on a 'no blame' agreement, allowed for an integration of planning and construction considerations. Secondly, an ecosystem approach for the environmental risk and impact management was adopted. This also gave sustainability and environmental safe design principles priority, leading to a situation in which design parameters and engineering solutions became subordinate to environmental risks. A third characteristic is the switch from a ‘closed’ public community communications strategy towards an ‘open’ approach in which community representatives are briefed and open information meetings were held in different places along the bay.
The case study Melbourne port extension addressed the applied project arrangements.
The observations and lessons are included as chapter 3 in the report Infrastructure Planning and Delivery: Best practices and Case Studies (Commonwealth of Australia, Department of Infrastructure and Transport, 2010).
The report can be downloaded
The Maasvlakte 2 (MV2) expansion project of the Port of Rotterdam, comprises of a land reclamation project. This project has been initiated by the Port of Rotterdam and the Dutch government to cope with future space shortages of the port. The terms of reference were set by a societal discussion on usefulness and necessity. A conclusion hereof, besides requirements on the size and possible lay-out of the extension, was that the extension of the port should coincide with the creation of additional nature, recreational area and liveability improvements in the broader Rotterdam area (see figure 1). The further development of the project design was taken up by the then privatised port authority by the definition of ‘functional requirements’ that are based on the Terms of Reference, Dutch and EU regulations. Based on these requirements the constructors developed an engineering design. After awarding the contract, the constructors and the port authority aligned to optimise the engineering design. Of interest in this situation is that the port authority, as private entity, was able to discuss both the engineering design with the constructors, as well as the environmental permit requirements with the authorities.
Although not specific tailored towards the Maasvlakte 2 the European PPP Expertise Centre issued relevant guidance with regard to preparing and handling PPP cases such as the Maasvlakte 2 extension case.
This case description gives an example of an innovative realisation arrangement, the Consortium Grensmaas .
The Grensmaas is a part of the Meuse River that forms the border between The Netherlands and Belgium. In this area, several problems led to decades of debate and failed policy making (Warner, 2016):
Around 2005 the solution was found in the creation of a Consortium Grensmaas in which 14 private companies participated (e.g. Van den Biggelaar, Boskalis & Van Oord; L’Ortye, Geo-control), and the NGO Natuurmonumenten. This consortium was complemented with an organisation ‘RWS Maaswerken’ in which three governments cooperated: the Ministries of Infrastructure and Nature, and the Province of Limburg.
Initiation and realisation by Grensmaas Consortium.
The consortium and the governments signed a contract in 2005 for the run time of 2005-2022. For the local government and the citizens the advantages were that the gravel exploitation was not done in deep pits anymore, but in a more horizontal and landscaping manner that would lead to more water safety and an interesting nature area. Another advantage was that there was now a date, 2022, after which the gravel exploitation in their province would finally end. For the consortium the advantages were that they could keep the concessions that they had for the gravel exploitation, and that they could figure out for themselves how to realise the profit, as long as the end result was according to the agreed landscape plan. The NGO Natuurmonumenten was involved to manage the landscape once it was delivered.
Actual exploitation started in 2008 near the village of Itteren. In 2009 there was agreement on the nature management plan Natura 2000 Grensmaas. The end result will be an area with 1250 hectares of new nature and 479 hectares of existing nature. Extensive recreation will be made possible to enhance the support of the inhabitants.
In 2012 a problem arose: because of the economic crisis, the market for gravel temporarily collapsed, which was a severe problem for the private companies. This was a test for the strength of the arrangement. The government stepped in with a temporary loan and a license for temporary storage of the gravel. The companies contributed by taking one of their expensive graveling machines out of business.
The overall results at the end of 2017 can be seen as:
Figure: the Grensmaas landscape before the project started; the landscape right after finishing the project; and the final landscape after a number of years of nature management.
Communication by the Grensmaas Consortium
This Grensmaas Consortium faced another challenge prior to the economic crisis. After just a few years, the citizens of Limburg turned against the project, complaining that they weren’t getting the interesting landscape that was promised. ‘We are getting stagnant water instead of a gravel river (Dorpsraad Itteren, 2010). The consortium not only tried to respond in a serious way to these complaints, they also started to communicate actively about positive developments in the project.
In 2010, they had discovered a historic grave of war horses from the Battle of Maastricht in 1794. Pictures were sent to the local press and citizens were invited to come and have a look. The remains were excavated by archaeologists and the horses got a permanent monument elsewhere.
In 2011, a mammoth’s tooth was found, which was also reported by the local press. From 2012 onwards, regular newsletters for the local citizens were issued by the consortium (eight issues in 2012, five in 2013, two in 2014, and ten in 2015). A website informs everyone who is interested (http://www.grensmaas.nl/). The summit in the courting of the local citizens was the Grensmaas opera in May 2016. A choreography was written for excavation machines and a large audience enjoyed the show. By that time, the negative publicity had ceased to exist.
Some further reading on stakeholder engagement methods:
Some further reading on PPP in practice: