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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...
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Body of Knowledge:
Strategy Delivery and Commissioning
It is crucial that the government is aware, at all relevant times, of the development and progress of the project. The most efficient way to ensure that this is done under the circumstances is by requiring the private partner to liaise with the government on a regular basis and report on progress...
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Body of Knowledge:
Strategy Delivery and Commissioning
For the purposes of this PPP Guide, quality management is defined as a set of policies, processes, and procedures required for planning and execution (production/ development/ service) in the core business area of an organization. A Quality Management System (QMS) needs to integrate the various...
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Body of Knowledge:
Strategy Delivery and Commissioning
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Body of Knowledge:
Strategy Delivery and Commissioning
One of the common questions asked about PPPs is why, despite the great development of standardized PPP contracts, so many PPP contracts are varied or amended during their term. With standardization in all areas of PPP project development and implementation, why would any form of change or amendment...
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Body of Knowledge:
Strategy Delivery and Commissioning
It is common for the private partner to seek to change its shareholding arrangements and thereby, its owners. Provided that such a change does not increase the risk to the government or diminish the public benefit, it should not be prohibited by the PPP contract. The following circumstances are...
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Body of Knowledge:
Strategy Delivery and Commissioning
Scope management is essential to ensure that the project actually delivers that which the ultimate users of the project works require. The output specifications, which are set out in the PPP agreement, should take into account the government’s current, as well as future, requirements to the extent...
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Body of Knowledge:
Strategy Delivery and Commissioning
As noted, the general risk of implementing the PPP contract lies with the private partner. Exceptions to this general principle are limited to areas of specific relief such as relief events, compensation events, and force majeure events. In such cases, the PPP contract must specify the manner in...
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Body of Knowledge:
Strategy Delivery and Commissioning
Managing the changing environment and emerging risks through amending and adapting contracts is key to de-stressing projects. As such, there are very few, if any, absolute prohibitions on amendment of PPP agreements in any jurisdiction with significant PPP projects. The European Union (EU) has one...
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Body of Knowledge:
Strategy Delivery and Commissioning
In troubled projects, financial restructuring may be considered. A method of dealing with a project in financial difficulty is for the PPP contract to be auctioned by the government, whereby a new bidder will pay the actual worth of the project and then continue to provide the service. This is...
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Body of Knowledge:
Strategy Delivery and Commissioning
The cost of complying with a law that is current or foreseen at the time of entering into the PPP contract is usually built into the price that the private partner bids in order to provide the services. It may, however, not be possible for the private partner to price specific costs that may arise...
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Body of Knowledge:
Strategy Delivery and Commissioning
9.1. Importance of Claims Management
A claim in the context of PPP contract management is somewhat of a misnomer. Well-structured PPP contracts allow for specific consequences for specific failures by one party to meet its obligations to the other party. These failures normally give rise to a...
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Body of Knowledge:
Strategy Delivery and Commissioning
The private partner will have a limited set of events for which it can claim to:
Extend the completion date by which the asset must be created, commissioned, and operated
Extend the expiry of the PPP contract (effectively an extension to the period in which it can earn revenue from operating the...
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Body of Knowledge:
Strategy Delivery and Commissioning
Force majeure events are a limited set of events which may arise during the term of the PPP contract through no fault of either party. These are best managed by the private partner. They are more severe than relief events, will typically last longer and may result in termination of the PPP contract...
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Body of Knowledge:
Strategy Delivery and Commissioning
A very strict process of processing claims, as listed below, must be followed.
· The government must be notified of all claims within a limited period of time after the event. Claims submitted long after the event become impossible to evaluate, and the private partner will struggle to show how it...
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Body of Knowledge:
Strategy Delivery and Commissioning
Monitoring the performance of the private partner is a primary function of the contract management team of the government. In most PPPs, the performance monitoring and reporting is done by the private partner, making the function largely one of assurance that the reporting is accurate and auditing...
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Body of Knowledge:
Strategy Delivery and Commissioning
When dealing with under-performance and non-compliance in the Construction Phase, the issue is not the standard of services provided but rather the time taken to complete the asset and the quality of the asset on completion. In general terms, the private partner is incentivized to bring the asset...
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Body of Knowledge:
Strategy Delivery and Commissioning
In PPPs, liquidated damages are the preferred remedy for late service commencement. Liquidated damages are a payment representing a genuine pre-estimate of the actual losses or damages suffered if the private partner fails to achieve service commencement on time. The events giving rise to...
