Phase IV : Implementation
In general, the municipality’s role during the implementation phase has four subphases:
1. Pre-construction
2. Construction
3. Operations
4. Handback
Managing a PPP agreement requires a different approach from managing a conventional public procurement contract. A conventional public procurement contract is short term (usually at most two or three years) and pertains to the execution of precisely defined activities. A PPP agreement, on the other hand, is long term and output based. The key success factor of effective contract management is a good relationship between the municipality and the private partner. The essence of PPP is that both parties proactively work together to manage conflict, avoid defaults, and deliver public services.
During project development, the municipality is represented by a project manager. During implementation, the project manager is replaced by a contract manager to act as the primary point of contact of the municipality with the private partner. Depending on the complexity of the project and the resources of the municipality, the contract manager may be assisted by a contract management unit that combines the various disciplines that are needed to monitor the performance of the private partner and manage the PPP contract.
To learn more about the PPP Contract Manager and contract management unit, download the full Guidance Note.
The contract management plan (CMP) describes:
- The composition and responsibilities of the contract management unit;
- Procedures for dealing with contractual events in the various stages of the implementation of the PPP project;
- The performance criteria, monitoring system, and other deliverables/liabilities under the PPP agreement; and
- Procedures for reporting and disclosure of PPP performance to the municipal government and stakeholders.
The CMP is prepared (usually by the transaction adviser) even before the award and signing of the PPP agreement, and is updated after the signing of the PPP agreement.
This section sets out some of the key issues to be addressed by the Contract Manager. (See Module 12: Contract Management). Topics include:
- Performance Monitoring
- Changes, Variations and Amendments
- Payment Adjustments
- Compensation and Relief Events
- Refinancing
- Conflict Management and Dispute Resolution
- Expiry of PPP Agreement and Handback of Assets
To learn more about Contract Management, download the full Guidance Note.
