Operations Phase

The transition from construction to operations is an ongoing process, with each irrigation sector starting operations once its construction is complete. This is taking longer than expected, as the landowners have to commit to joining the scheme before irrigation can begin and this does not always occur prior to construction works being completed.

An additional complication of the operations phase was agreeing the total duration of the PPP contract. The full operation of each sector begins once construction is complete and the landowners have committed to join the scheme. However, due to the size of the project, there was always going to be a significant time period between the completion of construction of the various sectors. The PPP contract stated that the operations phase was to last for 30 years, however it was unclear on how this would be measured. One clause stated that this 30-year period would begin once all construction was complete, implying that operations would take place on most sectors for longer than 30 years. Another clause suggested that the 30-year period would begin to be counted for each sector individually, so that no sector was in operations for longer than 30 years. This was finally clarified, and it was agreed that the contractual start date of operations for the purpose of determining the total duration of the PPP contract will be the day on which every irrigation sector is operational (that is, when construction of all sectors is complete), and the PPP contract and the operation of each section of the works will run for 30 years after that date.

The monitoring and reporting system for the operations phase is not as comprehensive and detailed as it is for construction. During the operations phase, the Project Company reports only water consumption and maintenance expenditure to the Procuring Authority, compared to a much wider range of performance metrics which are reported during construction. This is driven by the contractual arrangements, as construction costs are currently paid for by the Procuring Authority (as is detailed under the heading "Key Events" below), who therefore pay close attention to the construction works. Operational revenue comes entirely from user charges levied on landowners, and hence, there is less need for Procuring Authority involvement.