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SADC PPP Network PPPs in SADC

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Presentation on theme: "SADC PPP Network PPPs in SADC"— Presentation transcript:

1 SADC PPP Network PPPs in SADC
Public Private Partnerships Kogan Pillay Head SADC PPP Network 7 March 2014

2 Public Private Partnerships
Contract Management

3 Contents The Concept of Contract Management, Monitoring and Regulation
The Objectives of Contract Management The Methodologies of Contract Management

4 Contract Management Functions
Varies from project to project, BUT - Has three main functions and can - considerable overlap Partnership Management Contract Management Service Delivery Management Contract Administration

5 Contract Management Framework

6 Contract Management – Approach by Government
Government does not row – government steers Must respect transfer of responsibilities to service provider Focus is on Output/Outcomes through Quality assurance Performance monitoring Corrective actions, where required

7 Contract Management – Government’s Roles and Responsibilities
Primary Government persons – Government’s Project Representative (HoD) and the Project Officer Government’s Project Representative Senior official, responsible for all project activities Mobilizes & maintains political support Appoints the Project Officer Obtains approval for Contract Management Plan Signs the PPP contract Delegates necessary powers to Project Officer, post contract signing Resolves disputes not sorted by Project Officer Provides executive commitment to partnership management Provides financial oversight to ensure PPP operates in the public interest Appointed as soon as PPP identified Provides continuity throughout entire PPP process

8 Contract Management – Role of the Project Officer
Accountable to Govt’s project representative Has delegated authority to: Manage project on behalf of government Ensures continued affordability, value for money & transfer of risk during the PPP Ensures both parties meet all contractual obligations Ensures Output Specifications all met Appoints Contract Management Team Builds strong partnership with private sector service provider Prevents/resolves disputes Manages risks Monitors private sector performance & corrects if necessary Helps develop Contract Management Plan Implements Contract Management Plan Reports on management of the Contract Manages variations – changes – in the Contract Develops effective communication network Organises Contract Management reviews Administers remedies for a breach Is the liaison officer with the private sector service provider for all aspects of the project

9 Contract Management Team
Provides support to Project Officer in managing Contract Composition of Team varies, but may include: Technical Financial Legal Human Resources disciplines Composition reflects competencies required by the project, during each phase Composition may change from phase to phase To extent necessary, outside expertise obtained to supplement skills possessed by Team Team should be established early on PMT from Procurement Processes a good place to start Team members interact with private sector counterparts

10 Partnership Management Function
Key dimensions: Corporate Governance Communication and information sharing Dispute Resolution

11 Partnership Management Structure

12 Partnership Management – Corporate Governance
Corporate Governance – structures, systems, policies and mechanisms of accountability within an organisation South Africa has King Code of Corporate Practices & Conduct Broadens financial focus to include environmental and social aspects Applies fairness, accountability, responsibility and transparency to all activities Requires accountability to the organisation and stakeholders

13 Partnership Management – Communication and Info Sharing
Communications can make or break a partnership Failure to communicate causes more problems than failure to perform Information sharing based upon trust and balancing negotiating positions Communications take place between different levels in both organisations Strategic level – government’s project representative and CEO of private sector service provider Business level – project officer and the private sector service provider counterpart Operational level – government staff and private sector service delivery management Important that communication levels be maintained when problems arise – Do Not “take this straight to the top”

14 Partnership Management – Dispute Resolution
Dispute Resolution processes in PPP Contract All disputes must follow same route from project liaison personnel on both sides to the government’s project representative and private sector’s CEO Important to: Record problems as they occur Notify of problems by correct route at correct level Document approaches to resolving problems Escalate only as per Contract

15 Service Delivery Management
Two Principal Areas Risk Management – managing project threats Performance Management – ensuring the project continues to be affordable, provide value for money, and that significant risks stay with the private sector service provider

16 Risk Management Central component of contract management
Contract risk allocation reflected in Contract Management Plan Project Officer allocates “ownership” of each risk to member(s) of the Project Management Team Risk measures determined and implemented Assessment of mitigation measures is on-going

17 Performance Management
Ensures contract anticipated affordability, value for money and risk transfer Performance monitoring methodology Level of performance to achieve Outputs Methods government can use to promote performance Consequences to private sector for failure to perform Reflects contract provisions & includes: Reporting obligations Performance management system to review quality management system Govt officials responsible for monitoring Estimate of resources govt will require Performance monitoring systems

18 Performance Management – Monitoring Mechanisms
Check progress to ensure milestones met Regular performance progress meetings Regular and random inspections Feedback mechanisms from stakeholders/end users Inspecting deliverables to ensure quality Maintaining comprehensive performance monitoring records

19 Consequences for Failure to meet Service Levels
Monitoring should provide basis for measuring performance against outputs Failure to meet outputs dealt with per contract Formal warnings Penalty deductions Step-in rights Should be implemented to achieve positive response

20 Contract Administration
Administrative process to manage all documents and processes Contract Administration Plan

21 Contract Maintenance Processes and procedures to ensure Contract & related documents up to date & consistent Accessible to all relevant parties Provides basis for common view of contractual obligations Relevant reports are produced

22 Financial Administration
Systems and procedures to: Make and receive financial payments Keep records of all financial statements, per contract Making Unitary and Incentive payments Administering penalty deductions Calculating inflation Dealing with late payments Receiving financial reports

23 Contract Management - Summary
Contract Management Plan a critical document Contract Management Framework for implementation Partnership approach by government essential – “rowing” Government’s Project Representative & Project Officer Contract Management Team & “ownership” of issues/risks Partnership Management Performance Management Contract Administration

24 Thank you Kogan Pillay T: F: Or visit us on the web:


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