P3 contract management tool provides insights to client perspectives

Stronger public sector oversight and contract management are essential to realizing the true value of investment through public private partnerships (P3s), according to new guidance from the Global Infrastructure Hub, an organization formed in 2014 by the G20 dedicated to infrastructure in both developed and emerging markets.

With the launch of its Public Private Partnership (PPP) Contract Management Tool—the international organization is offering a free online resource that provides practical, user-friendly guidance for public officials in charge of managing PPP infrastructure projects after financial close, through construction and operations.

In a media release, CEO of the Global Infrastructure Hub, Chris Heathcote, says that governments need to focus on the importance of managing PPP infrastructure projects to ensure that the public is receiving the full benefit of the infrastructure services.

“A great deal of attention is paid to the preparation, procurement and negotiation processes of PPPs,” says Heathcote.

“However, this is only the start of delivering a successful project, and in many ways the hard work begins after financial close. Simply signing a PPP contract and letting it run its course will not automatically lead to the private sector delivering the public service to the level of quality expected, and has the potential to undermine the entire process of project preparation and procurement.”

Governments need to monitor and ensure that scope changes are managed effectively to ensure value for money and minimize the risk of disputes, according to the Global Infrastructure Hub. Governments also need to ensure that community stakeholders are consulted in relation to disruptions through construction and operations.

The aim of the PPP Contract Management Tool is to help government officials address these types of challenges and prevent potential setbacks and disruptions throughout the construction and operations phases of a project.

“Our research finds that up to 48% of PPP contracts globally are renegotiated within the first 12 years. The key issues associated with renegotiation are that they don’t typically benefit from a competitive tender process and often lack transparency.

“Therefore, it’s important that the government’s contract management team has the capacity and resources required to successfully manage a renegotiation.”

The Global Infrastructure Hub tool provides case studies and sets out the skills and expertise required to both procure and manage programs across their whole lifecycle.