The government party should ensure that it collects adequate information to confirm that the output specifications and services specification in the project deed are being met by the private party; and to ensure long term service continuity by enabling the government party to understand the sustainability of the project. |
Performance monitoring in a Partnerships Victoria project should focus on what the private party is required to achieve, rather than how it achieves it. However, from the government party's perspective, monitoring outcomes is unlikely to be sufficient to provide all the information needed to assess the full range of control actions that may be appropriate. If the government party only monitors the private party's short-term performance against the output specification and services specification, it may not alert the government party to longer term issues that may eventually result in project failure, such as the private party experiencing financial distress.
As discussed in section 2.2, the government party carries the ultimate risk of non-delivery of services under a Partnerships Victoria project. It is therefore essential that the government party has access to information that goes beyond short-term monitoring of service performance standards, and attempts to understand the long-term sustainability of the project (e.g. gathering information about the financial health of the private party may provide signs that the party is in financial distress, potentially placing ongoing contract performance at risk).
The information required may include information related to subcontractors and/or investors in the private party. In identifying and gathering such information, there may be efficiencies for the contract director in taking a collaborative approach with contract directors for other Partnerships Victoria projects that involve the same project sponsors, subcontractors and/or investors.