5.3. Relationship Management

Relationship management aims at maintaining a harmonious relationship between the contract parties, the key elements of which are:

1. Mutual trust based on an understanding of mutual benefit: The parties to the agreement should view the PPP arrangement as a mutually beneficial enterprise.

2. Understanding objectives: The institution and the private partner must understand and respect the independent objectives of each entity and also the overall project objectives.

3. Open communication and information sharing: The institution should foster an environment for sharing information with, and obtaining information from, the private partner on matters directly or indirectly related to the project. The key to developing an effective long term relationship is the establishment of a collaborative working arrangement along with systems and communications that actively support the partnership throughout the life of the project.

Communication is the essence of a good working relationship. Such communication happens in the following ways:

a. Strategic level communication focuses on discussing the partnership, its management, and any initiatives within it that they could promote or initiate. The idea is to promote the relationship and commitment to a healthy relationship by leading through example.

b. Business level communication is more formal and structured. Changes to the contract are managed at this level and any issue that arises may be dealt.

c. Operational level is where the actual service delivery occurs and is monitored by the contract management team. Day-to-day problems in the delivery of services may be resolved here. If this is not possible, they can be escalated to the contract manager.

Successful relationships in contract management are typically spearheaded by the top management by establishing a collaborative rather than a confrontational approach to contract management. A collaborative approach is encouraged when officials of both the public entity and the private partner to engage in meetings and discussions. The objective should be to review information and engage in a constructive and collaborative dialogue. Points of discussion could include contract performance, KPIs, operations, etc., evolving risks and issues; use the registers and joint plans to address issues.

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