There are typically two key types of scope changes that may require different approaches from the Procuring Authority to manage:
• Minor scope changes. Minor scope changes should be manageable within the scope change provisions of a PPP contract without having a significant impact on the agreed risk allocation.
• Significant scope changes. A significant proposed scope change may be more complex to assess and to implement. Procuring Authorities should be aware that the contract may impose limits on the ability of either party to initiate changes of this nature within the scope change mechanism set out in the PPP contract. Renegotiation may be the appropriate mechanism to use where such changes are required, but termination may also need to be considered. Significant scope change will also have the potential to affect the risk allocation agreed in the PPP contract. Renegotiation is detailed in Chapter 4 (Renegotiation) and termination is detailed in Chapter 7 (Default and termination).
Typically, either the Procuring Authority or the Project Company may request a scope change. The Procuring Authority will often have the right to direct a minor scope change. Such a change will be subject to agreement on time and costs and this will affect how the process is managed by the Procuring Authority. The specific procedure will depend on the PPP contract and the underlying legal framework.
| EXAMPLE Accelerated airport expansion The Queen Alia International Airport Expansion project in Jordan experienced a significant scope change when it became evident that passenger numbers were higher than had been predicted. The original plan had been to expand the airport in two stages, however it became clear that the first stage of expansion would not be sufficient to account for the passenger growth. While construction was continuing, both parties agreed that it would be more efficient to change the design so the expanded terminal was able to handle higher volumes than had been originally estimated. This was a situation where a clear benefit was visible and, with the extra revenue of higher passenger numbers, the negotiation was relatively simple. The incentives to both sides were aligned and a superior service to the users was achieved. For more information, see the Queen Alia International Airport Expansion Case Study. |