It is important to focus on the needs and concerns of project employees, especially when staff are transferred to the Project Company.
The PPP contract required that the Project Company retain the employees of the existing operators, who were understandably anxious about the change. The Project Company addressed staff concerns by introducing 'on the job' training, as well as an incentive-based performance regime. By focusing on the concerns of the staff, the Project Company was able to motivate them to continue providing a high-quality service.
Opposition from local communities due to unexpected costs should be resolved appropriately, with such measures to be fully considered at the project planning stage.
Small boilers, which had been installed by users over the preceding years, needed to be removed as they were inefficient and causing pollution. Initially, such users were expected to bear all the new pipeline installation fees, however after resistance, the government agreed to share the costs. Any unexpected costs are unlikely to be welcomed by the local community, and this must be taken into account when project planning takes place.
Detailed arrangements and adequate preparation in advance of the transition between financial close and operations is vital to ensure utility services are delivered as scheduled by the PPP contract.
The Project Company was required under the PPP contract to provide heating services no later than the regular date of commencement of heating in the district. Between this date and financial close being reached there was only about one month for the Project Company to prepare for the transition to operations, one third of the usual time required. By arranging for the storage of additional fuel, and by a number of BYHC's experienced maintenance employees from other municipalities providing assistance in advance, the Project Company was able to carry out the transition without interruption to the services.
By government having an equity interest in the Project Company, it can typically appoint both a member of the board of directors and the head of the supervisory committee of the Project Company, giving it a greater level of monitoring and influence over the project.
There are five members of the board of directors, at least one of which must come from the government of the Qiaoxi District. Each member of the board of directors, including the Chairman, has one vote each when decisions need to be made. There are certain items, such as health, safety and environmental protection, over which the government member has veto power. The supervisory committee consists of three members, one of whom must come from the government of the Qiaoxi District and act as the head of the supervisory committee. With the government of the Qiaoxi District having representatives on each committee and board, it is able to monitor the performance of the Project Company, as well as play a role in making key decisions in relation to the project.
The experience of the private sector can help government staff gain valuable skills and training in PPP contract management.
The training for the Procuring Authority staff is primarily 'on the job' training, with employees learning from the technical staff of BYHC. This was emphasised as operations began, as it was an effective way to improve relations between the Procuring Authority and the management of BYHC. There is no structured training programme in place for Procuring Authority staff.