Partnership Victoria groups the tasks during the operative stages of a PPP project (construction and operation and maintenance) in four general topics (see Box 2).
BOX 18 : Partnership Victoria - Contract Management Issues
Manage: | Construction | Operation and Maintenance |
Performance | • Manage performance by government • Monitor construction progress and management quality • Consider detailed designs | • Manage performance by government • Monitor private party's performance, management etc. • Seek user feedback |
Relationships | • Continue and strengthen communications • Manage stakeholders | • Maintain and strengthen communications • Manage stakeholders • Ensure the right participants are involved in committees |
Change | • Manage transition from procurement to contract management • Manage contractor claims • Manage commissioning issues | • Manage changes to output specifications • Manage automatic contractual changes, such as indexation of payments |
Contingency events | • Maintain contingency plans and review prior to commencement of service delivery • Respond to defaults and disasters | • Maintain and review contingency plans • Scan environment for potential impacts • Respond to defaults an disasters |
These four groups identified by Partnership Victoria - performance, relationships, changes and contingencies - summarize in a clear and concise way the phases of construction, operation and maintenance.
The monitoring of performance requires detailed information about the service and the market in which the service is provided. Moreover, analytical instruments should be available so as to permit a clear understanding of the firm's operation and the "business" of the private partner.
Within this performance supervision, the handling of the transition between stages is a key aspect that needs to be accounted for. In some contracts, the termination of the construction stage and the beginning of the service provision raise some particular challenges that must be clearly acknowledged. Moreover, the transition to contract termination - at the end of the contract period or in case of early termination - will require special actions and mechanisms.
The Management of the relations between stakeholders involved in the process is another central aspect that is fundamental to the nature of the PPP. This requires participation mechanisms such as public hearings, consultation documents, and conflict resolution mechanisms between the government and the private partner or between other stakeholders. Among the latter, the mechanism of alternative solution of disputes is particularly suitable for PPP contracts.
Finally, the management of changes is another important aspect in the tasks to be developed in these stages. The long duration of the PPP contracts in infrastructure and the dynamic nature of services and markets where these are provided make necessary to have mechanisms that allow for the updating of the contract in order to assure that all partnership objectives are met in the most efficient way, maximizing the Value for Money of the contract.
Within this management of changes, an institutional memory of the contract (knowledge management) is required from the beginning and should include all variations, updates and interpretations agreed between the parties in order to reach efficient decision making.