5.1. Performance Monitoring, Repotting & Review

Performance Monitoring and Reporting deals with keeping a check on the project progress and its sub- activities throughout the lifecycle so that an appraisal can be done for the same from time to time and necessary corrective actions can be employed to get it back on track.

Along with constant monitoring it is also important that the public entity should report any exceptions and provide feedback to the private partner from time to time. Also, a review of the existing frameworks and policies for Performance monitoring is important from time to time to improve and incorporate newer challenges and complexities which evolve over time.

Performance monitoring and reporting is a critical aspect of contract management plan and it addresses the following aspects of contract management:

a. Confirm that the private partner is performing according to the output specifications in the contract and evaluate it on the basis of those specifications;

b. Give the public entity an understanding of the sustainability of the contract;

c. Help so that best project value is realized;

d. Give the public entity a clear idea on the project progress;

e. Monitor change;

f. Manage risks;

g. Conduct contingency planning for ensuring continuity of services and potential Government step-in under the contract;

h. Apply remedial measures, improvements is service quality hasn't been met with and check for effectiveness;

i. Amend the output standards if they are impossible to achieve / have been defaulted on a regular basis by the private partner because of external factors;

j. Monitor that meetings are held on a regular basis and in accordance with the contractual requirements;

k. Ensure obligations for payments of Annuity / Tipping Fees, bonus etc.;

l. Encourage appraisal of existing practices.

The guidelines document on post award contract management issued by the Department of Economic Affairs, Government of India sets out a checklist for managing and monitoring performance.

What are Key Performance Indicators (KPIs)?

KPIs are metrics to track the progress or performance of a project in terms of its service objectives. They should be defined in such a manner that they describe the desired output or performance levels and not the means or methods of achieving such output.

The process of developing KPIs begins at the procurement stage of the PPP project lifecycle when the contract manager/team provides a support role to the procurement team in developing the KPIs. At the tendering and contracting stage, the performance requirements are identified and defined. Later, the KPIs are developed and detailed. At the next level, area-specific KPIs are defined. The reporting requirements for the KPIs are also detailed at this stage.

Indicative KPIs:

• Service Quality: Quality of Road, 24x 7 water supply

• Financial Efficiency: Average cost of ambulance trip, average cost per water connection

• Process Related: Arrival processing time at airport, average connection time

Source: Knowledge Series, Training of Trainers Curriculum, PPP, Module II - Project Analysis and Structuring, Department of Economic Affairs, Ministry of Finance, Government of India