Some disagreements and disputes result from actions or inactions and risks transferred to the Project Company's construction or operations contractors or some other third party. This may complicate negotiations. The Procuring Authority should make an assessment of which parties should be involved in the negotiations to settle a dispute as it may be beneficial for the construction or operations contractor to be present as well as the Project Company. This will particularly be the case where there is a corresponding claim made by the relevant contractor or other third party against the Project Company. In such circumstances, what the Project Company is able to agree to may be conditional on agreement by the relevant contractor. Additionally, the Project Company's contractors may have a greater level of expertise and more detailed information available which will assist in crafting a reasonable resolution for all.
The Procuring Authority should, however, be hesitant to open the door to a variety of parties without good reason and without clear agreements over the role each will play in the process. Without this the cost and timescale of the process can quickly escalate. Care should be taken to avoid the risk of the private sector entities 'ganging up' on the Procuring Authority.
EXAMPLE Senior management meetings to prevent issues escalating into disputes On a transport project in a developed market, the Procuring Authority instigated a 'chairmens' Meeting', which included representatives of the project advisory board, the Project Company, and the construction and operations contractors. These meetings proved very useful in solving issues, and also helped to enhance the relationship between the two parties. |