The private partner should be solely responsible for the design. Although the government should have a right to review the design (see section 6.1.2 above), it should have no rights of approval in respect of the design. Accordingly, all changes in the design to ensure that the output specifications are achieved should be at the risk of the private partner. The government will want the reassurance that the construction or development is capable of delivering the services on time and in a way that meets the output specifications in the PPP contract. Should this principle not be applied for an exceptional reason, then the approval rights must be exercised in a very carefully crafted and specific regime explicitly set out in the PPP contract.
7.3.1. Design Development Process
Most of the preliminary design should have been done during the Tender Phase, and the government will have done some design review as part of the process of selecting the private partner. The risk is that the private partner’s design proposals included in its bid will not achieve the required output specifications. Design proposals submitted at the bid stage are typically conceptual in nature and are more often than not substantially modified in later phases.
In this context, the government should ensure that:
· The private partner’s design does not extend beyond the extent of the land to be provided. If it does, the cost and risk that may result from the acquisition of additional land is the responsibility of the private party;
· The private partner’s design proposal that is current at contract award is incorporated into the PPP contract so that a record of what was designed remains in the formal agreements;
· The PPP contract is sufficiently flexible to allow for changes and improvements to the preliminary design in order to allow for any planning, environmental, or other requirements; and
· The private party is required to submit for review all revised designs.
7.3.2. Certifying, Inspecting, and Obtaining Approvals
A certification service is typically provided to both the government and the private partner by the independent certifier who will inspect the completed construction works; if satisfied, the independent certifier will issue the required certificates for commencing operations (section 6.1.3 above). Whereas the government must be entitled to monitor the work during the Construction Phase, it should not have any approval rights in respect of the works. The responsibility for obtaining all consents and approvals from third parties should be that of the private partner with the reasonable assistance of the government.
7.3.3. Performance Tests and Verifying Asset Suitability
Before commencement of operations, the private partner should be obliged to demonstrate that the assets will meet the required output specifications. The method of demonstration to be used by the private partner will be project specific, but may take the form of inspections, demonstrations, acceptance or commissioning trials, or other performance tests.
7.3.4. Private Party Obligations when Delivering an Asset
The private partner must give adequate prior notice of any performance test which requires it to provide access to the tests, as well as the documents required to evidence the results thereof. The independent certifier should be responsible for assessing the success or failure of the performance tests, and there must be a process for the private partner to remedy any defects arising from such tests.