PPP Contract Management Design and Implementation March 2021

PPP Contract Management Design and Implementation March 2021 Presented by: • Philip J Kelly

PPP Project Contract Management • • /Implementation of Contract Management takes place after PPP Project Agreement / Financial Close Design and Preparation for Contract Management takes place from Project Selection to Financial Close Project Cycle Phase Indicative Time months / % of total 1 Selection of Project to enter PPP project cycle 2 (0. 6%) 2 Project Preparation – business case / PPP feasibility 6 -9 (2. 6%) 3 Procurement, Selection, Award, PPP Project Agreement 9 -12 (3. 6%) 4 Private Partner Financial Close 6 -12 (3. 6%) 5 PPP Contract Management 240 -300 (89%)

PPP Project Contract Management 1 • Economic Regulation • Contract Management process, resources, roles • Performance and Service Delivery Management and Monitoring • Financial Management and performance-based payments

PPP Project Contract Management 2 • Relationship Management • Contract Administration documents, processes • Resolution of Issues / Disputes • PPP Agreement Terms and Conditions

PPP Programme Contract Management • Management of aggregated PPP contracts • Monitoring and evaluation to identify recurring issues • Are aims of PPP programme being achieved? • Recurring Issues and Disputes • Fiscal impact – availability payments / contingent liabilities • Renegotiations • What improvements are needed in programme?

Economic Regulation • Address weak / no competition in infrastructure with networks or economies of scale • Bring competitive tension, protect consumers, promote cost recovery, return on investment, ensure quality services • Regulation: transparent, accountable, proportionate, consistent, targeted • Regulation by Contract or Regulation by Regulator operating under authority of general or sector legislation • See World Bank PPPLRC Regulation of Sectors and Regulatory Issues Impacting PPPs and links to other sources at https: //ppp. worldbank. org/public-private-partnership/regulation-sectors-and -regulatory-issues-impacting-ppps

Contract Management: Resources, Roles • Programme Contract Management (FMFBNP / ICRC? ) • Project Contract Management (MDA) • MDA contract manager on project team during project cycle • Continuity: output specifications, KPI, performance-based payments, issues and disputes, relationships • Renegotiation (FMFBNP and MDA) • Contract management costs include in project costs?

Contract Administration • Contract Management Manual and Plan agreed MDA – PPP Co • Record of documents, communications, meetings • Contract Management team / contacts for relationships

Contract Management: Relationship • Failure to communicate greater problem than failure to perform • Timely information sharing and trust • Strategic and structural issues • Different levels of issues and different contact persons in PPP Company, shareholders, lenders, MDA, FMFBNP, other MDAs

Performance Management • Processes, reporting, records, progress meetings - MDA • Operational issues and service delivery - MDA • KPI, Performance Payments (deductions / penalties / step-in rights) – FMFBNP / MDA • Risk management, transfer, mitigation on-going assessment and implementation - MDA / FMFBNP • Project affordability and value for money - FMFBNP

PPP Contracts are Incomplete • Incomplete because of the length of contract and near certainty of unforeseen circumstances • Built in adaptability while limiting renegotiation within foreseen circumstances • Encourage raising of problems before they become disputes

Resolving Issues and Disputes • Classify issues and address by agreed route • Document issues and disputes and resolution efforts • Escalate when necessary to next layer of resolution • Communication / Mediation / Arbitration / Litigation • Consider role of a Dispute Resolution Board (see note) • Termination last resort

World Economic Forum The Boston Consulting Group Strategic Infrastructure Steps to Prepare and Accelerate Public-Private Partnerships May 2013 http: //www 3. weforum. org/docs/AF 13/WEF_AF 13_Strategic_Infrastructure_Initiative. pdf

Contract Management Implementation • GI Hub Managing PPP Contracts after Financial Close guidance and case studies https: //managingppp. gihub. org/ • Contract Management Team Set up and Training • Routine Contract Management • Renegotiation • Disputes • Insolvency • Default and Termination

PPP Case Studies https: //content. gihub. org/live/media/1446/gih_contract-mgmt_case-studies. pdf • • • • Brabo I Light Rail Hydropower Plant Piracicaba 440/138 k. V Substation 500 k. V Tucuruí-Jurupari Transmission Line Qiaoxi District Central Heating Barranquilla Airport Queen Alia International Airport Expansion Daang Hari-SLEX Link Road Gautrain Rapid Rail Link Segarra Garrigues Irrigation System Zaragoza Tramway Central Berkshire Waste Project Intercity Express Programme I-495 Express Lanes Port of Miami Tunnel