Holding project bonds requires more resources than holding sovereign or corporate bonds due to the need to respond efficiently to the numerous waivers, change consents and other issues which will inevitably arise during a PPP Project's construction phase. A key difference to bank lenders is that institutional investors may not have the same capacity to be actively involved with the Issuer and the Private Partner, however, particularly in Europe, there are more and more active private investors who will wish to be - and be capable of being - closely involved with a PPP Project on an ongoing basis. The Contracting Authority and its advisers need to be aware of this and check that the bondholder decision making mechanisms in place will not inhibit the Private Partner's ability to perform the PPP Contract.
In monoline-guaranteed bonds, this risk was mitigated by the monoline acting as "controlling creditor" and taking decisions on behalf of the bondholders. This structure has, however, caused problems where monolines have been downgraded, but still continue to be entitled to take such decisions, despite not offering tangible credit enhancement. There are other mechanisms, known as monitoring advisers or similar, designed to facilitate effective decision-making, although these have not met with universal acceptance in the market since the monitoring adviser does not provide credit and therefore has no risk position alongside the bondholders to protect in its decision-making. Credit enhancement structures may achieve a similar result where there is a "credit provider". See Section 9.5.