Testing and commissioning issues can pose a significant risk to the relationship between parties. Stakeholder management with respect to the Project Company in detailed in Section 3.3 (Stakeholder management).
The research indicated that the Project Company and Procuring Authority sometimes retreat to an adversarial contractual position when disagreements arise during testing and commissioning. On one side, the Project Company is interested in ensuring that testing and commissioning is completed on time, as it typically triggers available payment. Agreed compensation is also typically payable to the Procuring Authority if completion of construction is delayed. On the other side, the Procuring Authority typically wishes to utilise the full duration of the period contractually available to complete testing and commissioning and to ensure that the quality of the asset matches its expectations and standards.
The skillset required during the operational phase is different from the management and oversight expertise needed during construction. There may be a need to change staff at this stage to account for the change in tasks required, although key staff need to be retained over both phases to ensure knowledge continuity. In addition, this is the period when there is a distinct team change on the Project Company side.
The changes in staff on both sides can create an opportunity for the establishment of a new relationship and different team dynamics. The time needed to rebuild the relationship with the Project Company at this stage should not be underestimated. Joint training and inductions may be valuable at the start of operations and service commencement to help build the relationship.
Notwithstanding the opportunities to build a strong relationship during this transition, several of the projects studied experienced delays in reaching the operations phase in part due to adversarial relationships that were created during the testing and commissioning stage. This implies that this period may also carry a higher risk of disputes. For example, a dispute over commissioning on one waste PPP in the study has gone to court and is threatening the viability of the project itself. This is also a time when there is an increased likelihood of the Project Company bringing forward claims for cost overruns, as this stage gives the Project Company and/or the construction contractor a clear view of the overall cost position for the construction phase. Claims are detailed in Section 3.5 (Claims) and disputes are detailed in Chapter 5 (Disputes).
EXAMPLE Staff training The parties on the Queen Alia International Airport Expansion project in Jordan understood the challenges of transition phases from an early stage, and careful planning started two years before the transition from construction to operations. The effective transition management, as well as early planning and training, ensured good transfer of knowledge from the construction team to the operations team and helped overall readiness for service commencement. For more information, see the Queen Alia International Airport Expansion Case Study. |
EXAMPLE Construction to operations Sections of the completed Segarra Garrigues Irrigation System project in Spain began operations while construction was ongoing in other sections, so there has been a crossover period of many years. This is a challenge for the Procuring Authority, who has to manage both the construction and operation phases simultaneously. For more information, see the Segarra Garrigues Irrigation System Case Study. |