Management Review
In this chapter, the GCA shall have a goal to prepare a project monitoring and evaluation (M&E) mechanism for the PPP agreement. To fulfil the goal, the GCA shall conduct the management review. The management review document shall be a reference guide for PPP Nodes to monitor and evaluate the PPP project. The GCA’s management review shall also involve preparation of a draft of the management document for the PPP agreement. The inclusions of this draft are mentioned in the following sub-sections.
Refer to the Management of Contract Toolkit for practical guidance on management of a PPP project.
- Here, the GCA shall examine and note the possible operational structures of the PPP cooperation based on the type of PPP it is potentially evolving as, roles and responsibilities of the parties involved, the risk sharing arrangements etc. The GCA shall also describe the relationship between the parties involved in the PPP agreement (relating to the kind of agreement for the PPP, relating to the aspects of design, build, finance, operate, & maintain the asset (if all or some of these aspects are applicable to the PPP), relating to which party pays for the service or asset utilisation of the state or regional government, relating to the kind of government support required such as AP, guarantees etc., relating to income/revenue etc.). The parties to a PPP agreement could include the GCA, IBE, service users/consumers, off takers etc. The GCA shall represent the project structure showing the parties, roles, and relationships in a schematic form or a visual and explain in words the relationships shown in the structure.
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Here, the GCA shall present a summary of the PPP project’s profile developed based on the results of the analysis in previous sections. The GCA shall ensure that the project profile contains information including:
- Project name
- Project location
- Project description
- Project status (PPP stage)
- Sector and sub-sector of the PPP project
- GCA information
- Financial indicator information
- Concession period estimate
- PPP project cost estimate
- Indication of government support and/or government guarantees
- Indication of project structure (response from the previous section) and
- Indication of project milestones.
The GCA shall present this information in a tabulated form, if possible, for easy reference.
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The PPP Node appointed by the GCA has defined duties/tasks and authorities regarding the PPP project. The GCA shall explain these duties/tasks and authorities in the areas of policy formulation, synchronisation, coordination, supervision, and evaluation of construction of the PPP project and control the implementation of the PPP agreement. The Ministerial Regulations Number 07/2023 elaborates that the PPP Node has control over various stages of the PPP project including construction, service provision, and the end of the PPP Agreement. These are listed here for reference to enable the GCA to define and specify the duties and authorities of the PPP Node about the said PPP project.
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Construction stage –
- construction implementation according to the PPP agreement
- issues related to potential failure and the inability of the IBE to fulfil the PPP Agreement
- delay or change in the construction schedule of the PPP project
- design variations of the project, if requested by the GCA
- readiness of the IBE to execute the operational stage of the PPP project
- monitoring the alignment of technical planning with construction implementation
- labour-related challenges
- risk mitigation borne by the GCA
- feasibility support provided by the minister responsible for state finance
- guarantee agreements by BUPI (Infrastructure Guarantee Business Entity) or by the minister responsible for state finance and BUPI and
- regress agreement between the GCA and BUPI or between the GCA and the minister responsible for state finance and BUPI.
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Service provision stage –
- implementation of the PPP agreement
- monitoring of the service in line with the PPP agreement
- implementation of guarantee agreement by BUPI or by the minister responsible for state finance and BUPI and
- regress agreement between the GCA and BUPI or between the GCA and the minister responsible for state finance and BUPI.
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Preparation for the end of the PPP agreement (Transfer) stage -
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As the PPP service provision period approaches its end, the PPP Node shall consider:
- Asset transfer and/or asset management transfer if the PPP agreement stipulates the transfer of assets and/or asset management from the IBE to the GCA and
- The desired project conditions at the end of the PPP agreement term are in line with the PPP agreement.
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The PPP Node shall evaluate assets through the following activities:
- Review and evaluate all components included in PPP agreement. The PPP Node shall evaluate the condition or the performance and remaining life of every component based on the parameters that have been agreed upon in the PPP agreement
- Calculate the required cost for routine and non-routine O&M during the remaining life cycle of the PPP project
- Evaluate the availability of spare parts that may no longer be technically viable
- Evaluate the human resources available to the GCA and
- Evaluate implementation management efficiency during the PPP partnership
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If there is an asset and/or asset management transfer at the end of the PPP management phase, the PPP Node shall execute the following activities:
- Prepare and submit applications for inspection/testing all PPP assets for the purpose of asset transfer and/or asset management transfer
- Conduct physical inspection and testing for the purpose of asset transfer and/or asset management transfer in line with the PPP agreement
- Execute the necessary administrative actions in line with the provisions of laws and regulations to ensure that all assets are recorded in the name of the GCA
- Prepare minutes of the asset transfer, ensure they are signed by the IBE & the GCA and
- Ensure that assets are free from all material guarantees, encumbrances, burdens in any form, or third-party claims.
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Construction stage –
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Here, the GCA describes the obligations of the parties to the PPP agreement. Parties include the GCA and the IBE/BUP. The rights and obligations in the PPP agreement represent risk allocation between the GCA and the IBE. Specifically, the matters related to the obligations of the parties that the GCA is required to consider include:
- Obligations of the parties relating to the terms and conditions of the PPP agreement may be effective
- Obligations of the parties to ensure that the development of the project plan complies with the construction planning documents and time limit agreed upon in the PPP agreement
- Obligations of the IBE to provide services in line with the specifications agreed in the PPP agreement
- Obligations of the GCA related to the implementation mechanism for investment returns to the IBE
- Obligations of the parties in the dispute resolution mechanism during the implementation of the PPP agreement
- Obligations of the parties in terminating the PPP agreement.
- Here, the GCA shall describe the technical and administrative requirements that are to be fulfilled during the preparation stage of the PPP project. In terms of providing the sector infrastructure for the public, the GCA shall ensure that the project plan is able to meet the standards of the facilities or infrastructure’s service as stipulated in the sector regulation and policy. Here, the GCA shall also mention any supporting activities that require administrative efforts for example, minutes of the market sounding, minutes of the public consultation, submission of application for Availability Payment (AP) support, submission of application for government support, submission of application for government guarantee, submission of location determination, formation of the PPP team, environmental approval activities, land acquisition plan, resettlement plan, utilisation of BMN/D, submission of the PPP Book etc.
- It would be easier for the GCA to develop a tabulated or sequential list for these activities to enable systematic completion and follow-up on activities regarding the technical and administrative requirements from time to time.
- The GCA shall monitor the timing of the financial close. Immediately after the financial close for the PPP project is achieved, the GCA shall describe here the indicative scheduling of the project’s implementation. The GCA shall ensure that the preparation of the project implementation schedule aligns with the maximum PPP implementation timeline stipulated in the Ministerial Regulations Number 7/2023.
- Here, the GCA shall describe the inspection activity plan. The inspection activity plan ensures that every input used is adequate and in line with requirements. The plan also ensures every process carried out is in line with the infrastructure service provision’s PPP agreement and in line with the service specifications described in the section ‘Determination of Output Specifications’ of the Commercial Review of the Pre-FS. The GCA shall also describe the inspection methods and project acceptance criteria including the schedule/duration of acceptance.
- For a concise presentation, the GCA can prepare a control table to plan verification/validation, M&E, and the inspection & testing of acceptance criteria. In the control table, the inspection numbers can occur on rows, and the various columns could include method, criteria, and time.
- Here, the GCA describes the examination, acceptance criteria, and references used for the implementation of the supervision examination of the PPP agreement at the PPP management stage. (The management of contract stage of the PPP is the stage after signing of the PPP Agreement between the GCA and the (IBE) and after the IBE has secured financing for the PPP. The management of contract stage includes six stages of Preparatory Activities, Conditions Precedent, Construction, Service Delivery, Transfer of asset / infrastructure provision and Cross-Cutting Issues). The references used can be in the form of Terms of Reference (TOR)/technical specifications, standards, or applicable laws and regulations.
- For a concise presentation, the GCA can prepare the list of the project acceptance criteria in a tabular format. In the table, the inspection numbers can occur on rows, and the various columns could include activity, criteria, reference, and information.
- Here, the GCA describes the master document list plan. This plan lists the reference documents used by the PPP Node team. The plan also lists references in the form of standards or laws and regulations related to activities at the PPP management stage.
- For a concise presentation, the GCA can prepare the Master List Plan for PPP project documents in a tabular format. In the table, the serial numbers can occur on rows, and the various columns could include name and/or record number, document publishing recording, document location storage recording, and a recording of the time of saving the document.
- Here, the GCA shall maintain documentation of the recap or recording of the checklist of worksheets/evidence of work used in the next stage of activities by the PPP Node. In the implementation of the PPP management stage, the GCA shall record the implementation activities that show that the activities have been carried out and are in line with the pre-defined rules and requirements.
- For a concise presentation, the GCA can prepare the Master List Plan for PPP project documents in a tabular format. In the table, the serial numbers can occur on rows, and the various columns could include name and/or record number, document publishing recording, document location storage recording, and a recording of the time of saving the document.
Summary
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The GCA shall mention, in brief, the key conclusions and findings of the management review during the Pre-FS preparation. Briefly mention the key takeaways from each section of the review including the:
- Project structure indications
- PPP project profile
- Duties and authorities of the PPP Node
- Obligation of the parties in the PPP agreement
- Technical and administrative requirements
- Project control and implementation schedule indication
- Plans/ methods of verification/ validation, M&E, inspection & testing of acceptance criteria
- List of acceptance criteria
- Document master plan and
- Master list plan for worksheet records/evidence of work.
