The project director is responsible for ensuring that the private party meets its contractual obligations during the construction phase. Variations to the contract or waivers of rights have the potential to undermine the contractually agreed project risk allocation.
During the construction phase, variations to the contract or waivers of rights may be required. However, these must be documented, and approved at the appropriate level (such as a steering committee or Ministerial level for material variations).
The Partnerships Victoria team within DTF must be consulted when considering any material modifications proposed to vary or depart from the project deed. Contract variations impacting the project's budget, liabilities, or overall affordability will need to be referred to the responsible Minister, Treasurer and/or the relevant Cabinet subcommittee for approval. For non-financial contract variations which may have a service delivery or public interest impact, e.g. changes to KPI regimes, it is the project director's responsibility to brief the Minister.
The project deed can never be detailed enough to anticipate every circumstance that may arise during the construction phase of a project. Nevertheless, it should contain processes to enable contract amendments to be made (if required). Some items may need to be resolved during the construction phase using these processes. As such, the project director should ensure that any amendments are clearly documented so that the intention and reasoning behind them are understood during later stages of the project. This is important to ensure that the government party follows the correct procedures to avoid later disputes and ensure that their conduct has followed due process.
If an issue has the potential to affect the project's risk allocation, cost, scope, or timelines, appropriate approval should be sought before committing to any resolution reached with the private party. In these circumstances, the Partnerships Victoria team within the DTF should be kept informed of potential and emerging risks to the project.