4.1.2 It is important for the GPE to understand and appreciate these differences, as these differences necessitate a different approach to managing a PPP provider, as compared to managing a conventional contractor.
4.1.3 A PPP project differs from a conventional procurement in the following significant ways:
a) A PPP project is not a construction project. GPEs should avoid the tendency to manage a PPP project the way they manage a conventional construction project, and inadvertently limiting the room for the PPP provider to innovate in the design and construction of the asset;
b) As the PPP provider is delivering services and not an asset, the focus should be more on the performance of the PPP provider in delivering the services according to the stipulated service levels though the GPE might need to ensure that the asset could revert to itself in a reasonable (but not new) condition at the expiry of the PPP contract should the asset still have residual economic lifespan;
c) The risk allocation between the PPP provider and the GPE is more complex than that of a conventional procurement, and the GPE must be careful that the risks undertaken by the PPP provider such as construction and operational risks are not inadvertently passed back to the GPE; and
d) Due to the long tenure of the PPP contract, managing the relationship between the PPP provider and the GPE becomes critical to the success of the PPP project.