The factors affecting project-level performance, including cash flows and risks - and how they influence the private party (and its management, sponsors or parent company) - will change over the project lifecycle. For example:
• the release of performance bonds or guarantees at particular stages in the project lifecycle can significantly alter the risk profile of the project from the private party or its parent's perspective; and
• towards the end of the project term, the private party may have reduced incentive to fulfil maintenance and replacement capital expenditure requirements. As a result, if the government party takes ownership of the asset at the end of the contract term, the contract manager must understand, monitor and enforce any handback requirements outlined in the project deed to ensure that the State receives a properly maintained asset.
The contract director should maintain an up-to-date understanding of the factors that may influence project-level performance. When these factors change, the contract director should consider how the change affects the performance reporting and monitoring regime for the project, and make any necessary changes to this regime.