The Government may be assisted in its monitoring/ management function by third parties. For example, an independent specialist may be appointed under the contract to act as the monitor of compliance with contract obligations by the parties.26 Equally, the sector regulator (e.g. the water sector regulator) will be monitoring the project company's compliance with their obligations under law, which may well coincide with their obligations under the relevant contracts. The difficulty with this approach is the need for the regulator to operate in accordance with its mandate, with the usual discretion given to regulators. Often, this discretion cannot be limited (or "fettered") and therefore the regulator must comply with his legal mandate first and the contractual role as a secondary function.
| Box 4.8: Squeezing the Stone |
| The UK has identified potential savings during implementation, including • Renegotiating the scope of contracts, removing services no longer required. • Improving risk allocation by taking back energy consumption risk and improving energy efficiency through improved technology and using government purchasing power to lower utility and consumables costs. • Cutting waste by finding alternative uses for under-utilised assets • Avoiding additional costs through better contract management. Source: Infrastructure UK, "A new approach to public private partnerships" (December 2012). |
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26 Tremolet, Shukla and Venton, Contracting Out Utility Regulatory Functions (World Bank 2004).