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Body of Knowledge:
Strategy Delivery and Commissioning
Once the PPP contract is signed and financial close has been achieved (refer to chapter 6), the Construction Phase commences. This culminates in a form of commissioning, which triggers the beginning of the Operations Phase. While the structure of the PPP Certification Guide treats the Construction...
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Body of Knowledge:
Strategy Delivery and Commissioning
This general introduction shows the main components of PPP contract management, together with steps that need to be taken in order to be effective. The learning objectives are outlined in box 7.1 below.
BOX 7.1: Learning Objectives for Part A
After studying part A of this chapter, the reader...
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Body of Knowledge:
Strategy Delivery and Commissioning
The objective of PPP contract management is to obtain the services specified in the output specifications and ensure ongoing affordability, Value for Money (VfM) and appropriate management of risk transfer.
PPP contract management is the process that enables both parties in a contract to meet their...
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Body of Knowledge:
Strategy Delivery and Commissioning
A tangible contract management function assists in managing obligations in an effective manner; this saves the two parties significant time and effort and provides benefits in terms of business strategies and procedures.
Contracts dictate every aspect of key business strategies and relationships....
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Body of Knowledge:
Strategy Delivery and Commissioning
Contract management is a complex function, which consists of multiple activities. However, the primary activities can be divided into four main components.
Establishing governance and the contract management team.
Planning, establishing, and executing contract administration.
Relationship...
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Body of Knowledge:
Strategy Delivery and Commissioning
From a practical perspective, the Value for Money generated through a PPP depends on the quality of the private partner and the government’s contract management systems and teams. This is especially true for PPP contracts that have some form of risk retention on the part of the government, be it in...
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Body of Knowledge:
Strategy Delivery and Commissioning
4.2.1. The Role and Responsibilities of the Private Partner
To enable the government to effectively manage the contract, certain roles and responsibilities must be required of the private partner through the contract. It is very important that the reporting system of the private partner complies...
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Body of Knowledge:
Strategy Delivery and Commissioning
4.3.1. Process for Planning of Administrative Process
Management and control of risk is one of the most important factors during the PPP life cycle. Properly implemented administrative processes are imperative for effective risk management. However, the planning and establishment of...
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Body of Knowledge:
Strategy Delivery and Commissioning
PPPs, by their very nature, span a very long time frame. They are detailed and complex when it comes to managing relationships between the various parties in the PPP contract. There are many stakeholders within a PPP, including the parties, lenders, SPV shareholders, end-users, regulators,...
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Body of Knowledge:
Strategy Delivery and Commissioning
Service performance should be monitored and measured in order to ensure that contractual compliance is achieved and demonstrated.
Management of service performance is fundamental to the PPP contract, as it is through this process that payments to the private party are calculated and any deductions...
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Body of Knowledge:
Strategy Delivery and Commissioning
Where are We in the Process Cycle?
This part of the PPP Guide covers management of the contract during the Construction Phase of the PPP life cycle (delivery of the asset up to and including the commissioning of the asset). Therefore, all the general issues discussed previously in this chapter will...
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Body of Knowledge:
Strategy Delivery and Commissioning
This is the phase during which the project finance is drawn down and the construction contractor and subcontractors engaged by the private partner begin construction, testing, and commissioning of the different components of the project according to an implementation schedule. The major...
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Body of Knowledge:
Strategy Delivery and Commissioning
There is nothing that illustrates complexity better than the implementation of mega-projects. In this case, mega projects are PPP projects that are of high value, and are complex and lengthy by nature[15]. It can be demonstrated that a distinction among four different types of complexity helps to...
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Body of Knowledge:
Strategy Delivery and Commissioning
Several studies show that some PPPs were cancelled during the Construction Phase due to the lack of or a poorly executed contract management function[17]. See table 7.4.
TABLE 7.4: Examples of Projects Cancelled during the Construction Phase
Project
Reason
Light Railway Transit (LRT...
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Body of Knowledge:
Strategy Delivery and Commissioning
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Body of Knowledge:
Strategy Delivery and Commissioning
The following key activities typically occur during the Construction Phase of a PPP.
The private partner must establish itself on site and obtain the necessary permits and clearances to enable it to carry out the construction works;
The private partner must finalize the design for the construction...
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Body of Knowledge:
Strategy Delivery and Commissioning
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Body of Knowledge:
Strategy Delivery and Commissioning
Performance monitoring may be defined as an assurance role played by the government (primarily through the contract management team although other affected agencies and departments may also be involved) where assurance is obtained that the private partner has:
· Adequate systems, policies,...
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Body of Knowledge:
Strategy Delivery and Commissioning
As the Construction Phase progresses, the private partner (and the government in cases where the government makes a capital contribution) must make payments that match the progress made by the construction contractor in completing the construction works. These payments are typically made against...
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Body of Knowledge:
Strategy Delivery and Commissioning
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...
