A key component of PPP projects is the inclusion of lifecycle maintenance provisions within the Project Agreement. Most PPP projects include an operational maintenance period of 25 to 30 years. With the exception of the main structural components and the utilities infrastructure, most components can be expected to expire within this operational period.
Project Co will typically be required to submit its plans for lifecycle replacement annually for the forthcoming year, however, the Authority does not always have specific mechanisms to influence its content significantly due to maintaining the risk allocation noted above, subject to the contractual standards continuing to be met. While the Project Agreement will have specific provision in respect of lifecycle plans, the plans are ultimately considered a deliverable under the contract and are usually subject to the review procedure. The Authority should utilise this opportunity to seek information and dialogue around lifecycle plans and costings and to object timeously where appropriate and necessary. This may include requesting any underlying condition surveys that have been undertaken to support the plan and may identify areas that are less immediate but may allow early dialogue between the parties on the achievement of NZ objectives in the future.
Authorities should have a clear understanding of any provisions to comment, amend or influence lifecycle replacement including any FM SLS provisions around the selection or impact of replacement plant or equipment.