4.3.2 A successful relationship in a long-term service purchase under PPP will lead to the delivery of services that meet the requirements as stated in the PPP contract. The commercial arrangement under the PPP contract must be acceptable to both parties - offering value for money for the GPE and adequate profit for the PPP provider. Nonetheless, just as these commercial aspects are important, the relationship between the GPE and the PPP provider - the way they regard each other and work together during the PPP contract life - is vital to ensuring that the PPP does indeed lead to value for money.
4.3.3 Good relations between the GPE and the PPP provider should foster a climate which encourages both parties to suggest or make improvements in the quality of services delivered. However, the relationship must not be at the expense of the PPP contract. Throughout the life of the contract, the GPE, for instance, has the responsibility of monitoring the PPP provider's compliance with its contractual obligations.
4.3.4 Management of the relationship between the GPE and the PPP provider is thus the process of ensuring that both parties can work together in meeting the requirements of the project. This entails the following two aspects:
a) formal reporting and management arrangements - that is, governance; and
b) "soft" issues around the informal communications and cultural aspects.
4.3.5 Some key factors to be considered in establishing management structures for the relationship are as follows:
a) Ensure that the partnership is championed at senior levels in both the GPE and the PPP provider;
b) Recognise that the relationship demonstrated by the senior management of the GPE and the PPP provider will influence the tone of the relationship between both parties over the PPP contract life. The 'message' comes from the top;
c) Make the governance arrangements equitable and the relationship as being peer-to-peer. If not, imbalances will occur;
d) Avoid a proliferation of structures for managing the relationship, especially if the structures are seen as rigid and bureaucratic. Nonetheless, some differentiation of structures is required to ensure that long-term strategic issues underlying the PPP contract are considered, as well as the more day-to-day service delivery issues;
e) Set clear roles and responsibilities for the different structures for managing the relationship between the GPE and the PPP provider at different levels;
f) Empower the staff involved in each structure; and
g) Institute escalation procedures which should be understood and used properly - encourage an approach that seeks to resolve problems early, without escalating up the management chain unnecessarily.