Regional Platforms and Smooth Public-Private Dialogue: Nine Lessons from MLIT's Three-Year Effort

In recent years, local governments have increasingly engaged in public-private dialogue (sounding etc.) regarding the possibility of PPP/PFI introduction and use of public spaces. At the national level, MLIT has implemented efforts including manual creation, planning and operation of sounding on regional platforms over three years, and opinion exchanges with municipal mayors.

In January 2020 (Reiwa 2), MLIT compiled the lessons obtained through these activities and published "Points for Smooth Public-Private Dialogue Obtained from Regional Platform Efforts" as a reference for local governments and private operators engaging in public-private dialogue.

This article organizes the structure of the overview document and summarizes nine lessons.

Block Platform Sounding Results

Since FY 2017, MLIT has implemented sounding in "open format" (open-format sounding). In FY 2019, dialogue was conducted with private operators on 84 cases from 71 entities at six venues nationwide.

The block platform sounding flow has three steps.

1. Solicit cases from local governments for which they want to conduct sounding
2. Publish the solicited cases and recruit private operators to provide advice
3. For each case, the local government and the private operators advising on that case gather and exchange opinions (open-format sounding)

Private Proposal Event

On February 8, 2019, the dialogue-format event "Public Space Use Strategy Meeting" was held between local governments and private operators. Six companies selected through public solicitation presented their businesses to local governments.

Six participating companies and their proposals:

This served as a venue where private operators directly proposed their businesses to local governments.

MLIT organizes six lessons for municipalities, divided into two items during public-private dialogue and four items in regular work.

Lessons Toward Public-Private Dialogue

1. Clarify What You Want to Ask Private Operators

To obtain clues for case formulation through public-private dialogue, you need to clarify the items you want to ask private operators. "Broadly welcoming opinions" alone leaves private operators unable to prepare.

2. Four Points for Drawing Out Private Opinions

To draw out effective opinions from private operators, hold the following four points.

1. Basic advance information organization
2. Creating triggers to draw out opinions
3. Presentation of schedule and the like
4. Presentation of administrative commitment

For reference, the basic information that private operators seek in public-private dialogue:

• Basic policy and business purpose of the local government
• Financial performance (income and expenditure) of the facility for about the past three years
• Location conditions of the facility including transport access
• Legal constraints attached to the facility
• Facility specifications (age, scale, area, seismic capacity, etc.)
• Past review history and schedule
• Status of consensus building internally, with the council, local residents, and related agencies

A structure that can organize and present these in advance is the precondition for effective dialogue.

Practices in Regular Work That Lead to Dialogue

3. Raise Your Antenna

Both valuing connections with private operators and studying public-private cooperation cases conducted in other regions are important. Daily information gathering influences the quality of public-private dialogue.

4. Implement Continuous Public-Private Dialogue

Actively create opportunities for public-private dialogue according to case maturity. Sounding is not a one-shot event but a continuous series of staged dialogues that match case maturity.

5. Improve Information Dissemination

Consideration of information dissemination using diversifying information resources is needed. Beyond the homepage alone, multi-channel deployment including trade press, related associations, SNS, and related municipal networks is desirable.

6. Formation of Regional Platforms

Regional platforms are expected to make cases more stably proposed and to make continuous public-private dialogue take root in the region. Building a continuous framework on a regional basis is positioned as a lesson.

1. Appeal Without Waiting for Administrative Action

Although there are wishes to incorporate the ideas and case insights private operators have through public-private dialogue, for local governments that do not know how to draw them out, private operators should hold opportunities to appeal their know-how.

Private operators should not be passive but actively disseminate their business characteristics, performance, and successful cases in other regions.

2. Understand the Administrative Process at Local Governments

In carrying out projects, local governments have certain processes such as consensus building until project realization. It is important to know what kind of review process they have to go through, and what kind of schedule sense they have.

The timing of private operator proposals needs to be designed in line with the local government's decision-making process.

3. Continuous Know-How Acquisition and Case Research

Continuous information gathering and case research are important so that proposals can respond to local government wishes. The attitude of not ending with one sounding participation but continuously tracking trends in other regions and projects is required.

The review process shown in the overview document flows: concept review (about one year) → basic plan formulation (6 months to 1 year) → tender requirements review (about 6 months) → tender opening (3 to 6 months) → operator decision and contract (2 to 3 months) → project implementation.

Market sounding is standard at the business method review stage. Private operators should position the timing of their proposals within this overall picture as they prepare.

For Municipal Staff

Use the six lessons for municipalities as a checklist for pre-sounding preparation.

1. List the items you want to ask private operators
2. Confirm preparation status of the four points for drawing out opinions (advance information / triggers / schedule / commitment)
3. Confirm operational status of the four practices in regular work that lead to sounding (antenna / continuous dialogue / information dissemination / regional platform)

For Private Operators

When designing your proposal approach, use the three lessons for private operators as a starting point.

1. Set up venues for active appeal rather than waiting for administration (individual municipal visits, industry events, regional platform participation)
2. Research the administrative process and schedule sense of target municipalities in advance
3. Continuous study of successful and failed cases in other regions

Regional platforms are local coordination bodies that MLIT has promoted to enable continuous public-private dialogue. From FY 2017 over three years, including FY 2019 open-format sounding at six venues nationwide with 71 entities and 84 cases, dialogue with private operators has accumulated.

The lessons obtained from these are six for municipalities (clarify what you want to ask, four points for drawing out opinions, antenna, continuous dialogue, information dissemination, regional platforms) and three for private operators (active appeal, understanding administrative processes, continuous case research), for a total of nine.

Designing sounding not as a one-shot event but as a continuous public-private dialogue framework on a regional basis is said to raise the success probability of PPP/PFI introduction.

• Primary Source Library: MLIT PPP/PFI Guidance Series (January 2020 updated edition)
• Related guidance: The Regional Platform Smooth Public-Private Dialogue document is document 05 in the same archive
• Related articles: How to Conduct Market Sounding / MLIT Priority Review Regulation Guide