Relevant generic issues arising from this case study are:
- Management commitment and support. Under specific circumstances it may be preferable for service providers to be given an opportunity to resolve operational lapses rather than the public partner applying abatement for all instances of under-performance to encourage positive working relationships. Failure to follow through on service improvement commitments, resulting in continued poor performance, should (although this is not always the case in practice) lead to abatement being applied, retrospectively.
- Employee capability and expertise. A lack of resourcing can make it difficult for public partner contract managers to monitor the effectiveness of service provider performance, particularly over an extended period of time. Skill limitations may also impact on the public partner's ability to effectively manage contracts which may hinder the achievement of genuine VfM outcomes and compromise public safety.
- Conflict management. Delays, cost overruns and contractual disputes can impact on the attainment of service delivery outcomes. Partners should seek to continue to work together under these situations to avoid further delays and costly litigation. Relationship breakdowns can have a significant effect on partnership relations due to the long-term nature of PPP contracts.
- Implementation of operational transition plan. Ineffective implementation of transition plans can impact on operational delivery (leading to delays or scope changes) as well as damaging relations between public and private partners.
- Change of consortium members / change to public partner's agency authority. Re-structuring of the public partner entity could expose government to new and unintended risks (including how existing risks are managed / resourced) and corporate memory loss due to staff transitioning.
- Reputation damage. Government may choose to intervene in operational matters (that they are not responsible for under concession agreements). They may do so to avert negative media attention directed towards the public sector for issues or mistakes that the private partner is legally accountable for resolving.
- Contract monitoring systems modification. Contract monitoring regimes should be regularly reviewed to identify and manage performance / systems shortfalls. These may include deficiencies that relate to, for instance, asset management plans, data integrity, KPI measurement and management reporting.
- Availability (and integrity) of performance data. Inaccurate data can potentially give rise to undetected or unreported incidents as well as intentional fraud, all of which could detract from the achievement of VfM outcomes.
- KPI modification. If KPIs are difficult to measure, they can adversely impact on the public partner's ability to successfully monitor and review service provider performance.
- Contract management. Public partner performance management systems should be designed to capture outputs that do not meet stipulated standards as well as complaints lodged against operators. Regular performance reviews should take place (particularly in instances where operators have a track record of failing to maintain expected delivery standards).
- Penalties and abatements. Financial incentives are offered to operators (in the form of regular structured payments from the public partner) and conversely, deductions can be applied (typically due to an accumulation of penalty points which are then used to calculate an abatement) for failing to meet KPIs for instances of under-performance or non-compliance. Penalties and abatements should be consistently applied unless there is a properly justified case for not doing so (e.g. to improve positive working relationships - see 'Management commitment and support').