H.6.4 Relationship management, dispute resolution and issue management

Given the long-term duration of PPP projects, it is imperative to maintain a strong relationship between the government party and the private party. Good relationship management enables the parties to anticipate risk events more effectively and deal with risks that do materialise.

Good relationship management in a PPP project creates a long-term relationship of mutual benefit between the parties. Common features of good PPP relationships include the following:

• The parties appreciate one another's objectives, strategy and point of view;

• The parties are prepared to work collaboratively when required in order to resolve issues and disputes that may arise during the lifecycle of the project;

• There is open and clear communication between the parties at a number of levels;

• A degree of commercial trust has been established between the parties; and

• The relationship is championed at senior levels in each organisation.

Good communication and a strong relationship are essential, especially if issues arise which go to the heart of the contract's operation. It is also important to recognise that disputes and service delivery issues most likely will arise and will need to be appropriately managed. If the parties have strong dispute and issue management principles and procedures in place, these will help minimise damage to the relationship and help the parties achieve success in the project.