Regular review of projects is a significantly important exercise for Contract Management. It helps in keeping both the project information and the issue management activities up-to date. At all points of time, new and more complex challenges surround project managers and hence these new problems might cause severe delays in the project execution and management. Thus, reassessing the risks involved is a necessary foundation for ongoing review of the project's contract management framework.
| Renegotiation of PPP Agreements Given the characteristics of PPP arrangements and the fact that PPPs have been used in great numbers in many jurisdictions around the world, it is no surprise that a number of such projects have become distressed in terms of the emergence of risks that may not have been contemplated at the time of signing. Many such projects have been renegotiated over time. The forms of distress may vary but factors that lead to such distress could include any or a combination of the following: • Lower than expected revenue; • Higher than expected costs; • Delays; • Variations in contractual specifications and; • Disagreements between the parties as to cause and effect of actions/inactions. Any of these could give rise to a call for amending the terms of the Project Agreement / Concession Agreement to better reflect the project realities. However, it is observable that such calls typically (but not always) originate from the private partner to the Concession Agreement and, since the objectives behind such a call will be biased towards maintaining a required return on investment, or preventing a default under financing agreements undertaken by the private partner or avoiding a risk or set of risks, the amending of the Concession Agreement may not be in the best interests of the public entity (acting on behalf of the Government). It is therefore sensible to develop and implement a framework for dealing with such proposed amendments. Department of Economic Affairs, Ministry of Finance, Government of India, has developed a framework for renegotiation of PPP Contracts. The document could be used as reference material while renegotiating PPP arrangements. The framework document is available for download in the weblink given below: |
An indicative timeline for reference of the public entity given below:
| Activity | Indicative Timeline |
| Appointment of Contract Manager | Up to 15 Days prior to commencement of Bidding |
| Appointment of Contract Management Team | Within 7 days of selection of Preferred Bidder |
| Team Briefing & meeting as per project Requirements | Within 7 days of formation of Contract Management Team |
| Development of Contract Management Plan | Within 2 months of signing of Concession Agreement |
| Execution of Contract Management Plan | Right after the approval of pPlan from thr Authority Chief |
| Regular Review of Contract Management Plan | Every month depending upon project progress updated in the a project stage |
| Regular Public Communication Activities | Every 1-3 months depending upon project progress updated in the a project stage |
| Commencement of project Exit Plan | 5-6 months prior to the Completion Date |
| Completion of Asset Handover & maintenance of service continuity | Within 1 month of the Completion Date |
Source: Post Award Contract Management Guidelines for PPP Concessions, PPP Cell, Infrastructure Division, Department of Economic Affairs, Government of India