For brownfield projects which are in operation during construction activities, operational KPIs should be tailored to reflect the difficulties of operating during construction as opposed to during the steady operational phase.
It is challenging for the Project Company to meet operational KPIs while carrying out construction works concurrently. For this reason, it is preferable for the KPI measurement methodology during the construction phase to be adapted to the challenge that this period presents for the project.
Provision in the PPP contract setting out a process to adjust the KPI methodology may be useful to facilitate agreed adjustments based on review by all parties.
As outlined above, the contract allowed for a revision of the methodology used to measure the KPIs in order to adapt to the situation faced when operating the project. The review and agreement reached involved the Procuring Authority and the Project Company, as well as the appointed monitoring party.
Workshops and continued coordination between staff involved in structuring and those joining after contract award are useful in ensuring knowledge transfer.
To assist with knowledge transfer, workshops were carried out with new staff joining after contract award, representatives from the ANI central knowledge teams, and the ANI team and consultants that structured the contract. The external consultants involved in the structuring, also worked hand-in-hand with the Procuring Authority for six months after contract signing and provide continued support, as and when necessary.
It is beneficial to provide adequate incentives for the Project Company to complete construction on time.
The Procuring Authority learned lessons from previous projects where the Project Company failed to carry out construction at the required rate of progress. For the Barranquilla Airport project, the Project Company does not receive its full revenue until construction is complete, and the Procuring Authority sees this incentive mechanism as an important factor in ensuring that construction progresses in accordance with the programme agreed in the contract.
Heavy concentration of construction activities during a limited period, especially when carried out on an operational asset, requires well-planned management and monitoring to overcome the intrinsic challenges associated with uneven distribution of capital works.
Carrying out construction activities on an operational asset is always a challenge due to the constraints of the working environment, disruptions created by construction activities and all associated impacts on health and safety, the environment, the level of service, etc. The objective is therefore to advance the majority of the construction works as much as possible, which then leads to uneven distribution of capital works. In this case, 60% of the value of the capital works was scheduled to be completed in period one, out of the total eight periods. This created particular challenges in terms of managing and monitoring the progress of construction works. To manage this situation, ANI increased the typical meeting frequency of the management committee from once a month to every two weeks. While the pressure to complete construction works as soon as possible will still lead to a heavy concentration of works during the first period, even in future contracts, the contracts are now structured to allow for tailored KPI methodologies for construction and operations and for a mechanism to adjust the contract if necessary to overcome the challenges emerging from unevenly distributed construction works.
Lessons learned from contract management should inform future procurement.
Lessons learned from PPP contract management should form a virtuous cycle with the project initiation and procurement where one phase is informing the other. The Procuring Authority in this case evaluated its future PPP procurement on the basis of lessons learned on KPIs and construction activities from this project. This becomes particularly important when a PPP project is the first of its type to be launched following a particular law. Although in this case the Procuring Authority adopted international leading practices, it became evident that it is important to adapt the KPI methodology to the local environment and carefully consider local practices, as practices which work well in some regions may not be successful everywhere and adaptations may be necessary.