Partnerships Victoria projects are structured to achieve optimal risk allocation between the government party and the private party. Achieving project objectives, service delivery and the agreed value for money depends on the management of risks allocated to each party. As such, the project director must ensure all key stakeholders understand and maintain the project's contractual risk allocation. Primarily, the project director will actively manage the government party's retained risks. However, they will also need to understand and monitor how the private party is managing its contractual risks.
As decisions made on issues that arise during the construction phase can impact on later stages of the project, it is important for the project director to inform and educate government party stakeholders about the risk allocation for the project, and to ensure that project delivery decision makers understand and respect the contractual risk allocation.
The project deed and the contract administration manual, as well as the various plans and reports submitted by the private party, will be the primary references on risk management and allocation. The procurement team should hand over sufficient material to the contract management team to ensure a full understanding of the risk allocation and intensions of the project deed.
The importance of these documents reinforces the need for the project director to ensure there is effective knowledge transfer during the transition between the procurement team and the contract management team.