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MANAGING AND MITIGATING RISK DURING THE DELIVERY PHASE OF A PPP

NOVEMBER 2016

T O M R O C H EE G M , D E V E L O P M E N T & I N V E S T M E N T S

JOHN HOLLAND DEVELOPMENT & INVESTMENTS

D&I was formed to introduce new skills to

enhance John Holland’s origination

capabilities.

D&I’s primary focus is:

• Infrastructure Development: Including

PPP’s and brownfield investment

• Property Development: Urban

renewal and Transport-oriented

development (TOD)

• Mergers & Acquisitions: Enhancing

capability

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Old Royal Adelaide Hospital

PPP EXPERIENCE

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Ravenhall Prison

Sydney Metro Northwest

Capital Metro

New Grafton Correctional Centre

Southbank Education & Training Precinct

Eastern Goldfields Regional Prison

UPCOMING PROJECTS

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Melbourne MetroParramatta Light Rail

KEY SUCCESS FACTORS FOR PPP’S

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Key success factors:

Planning Approvals

Design Review process

Completion and Commissioning

Success requires:

Considerable up-front planning during the

bid phase

Even more coordination between

the consortium and the

Government during the delivery phase

Capital Metro, ACT

PLANNING APPROVALS

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Two stage planning process:

- Stage 1 – high level, sought by

Government prior to bids

- Stage 2 – based on final design and

lodged on Contract Close

Stage 1 Planning Approval needs to

be as broad as possible and to have

community support

Stage 2 is Government responsibility:

- Private sector has no ability to control or

influence (except quality of submission)

Time often more important than minor

conditions

Calvary Adelaide Hospital, SA

DESIGN REVIEW PROCESS

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What packages can be lodged early

(soon after Contract Close)?

Acceptance or rejection – comments vs

conditions

Partial vs full re-submission of packages

following rejection

What constitutes compliance with the

Brief – objective vs subjective tests

Proceed at risk – when and how much

Government resourcing and role of the

Independent Certifier

Sydney Metro Northwest, NSW

TECHNICAL COMPLETION AND COMMISSIONING

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Substantial planning required –

begins 18 months out with dedicated

resources

Completion and commissioning plans

must be followed – to the letter

Fit for Purpose must be objectively

measurable and independently

measured

One party must be completely

responsible for this task

Ravenhall Prison, VIC

COMMERCIAL ACCEPTANCE

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Coordination between D&C and

Operator

Role of the Operator in Technical

Completion as well as Commercial

Acceptance (CA)

Role of the Government and the

Independent Certifier

Fault Free Periods and Defects

Who is responsible for CA?Eastlink, VIC

PARTNERSHIP

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A true partnership in PPP’s requires:

- Sufficient skilled resources – SPV, D&C,

O&M and Government

- Collaboration rather than confrontation

- A willingness to compromise where

appropriate (but not on quality or standards)

- A common goal – the project’s success

- A legal framework that has appropriate

levels of flexibility embedded

The most important thing is communication

– early and often

CONCLUSION

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There are so many ways for PPP’s to go

wrong but only one way for them to go right

(at least in the delivery phase) – substantial

planning and a strong client relationship

Planning and the strong client relationship

are inter-linked – you won’t be able to build

a strong relationship if you cannot

demonstrate your team’s competence and

commitment to the project to the client

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QUESTIONS & ANSWERS