2. RESEARCH
5. provide any recommendations for future PPP projects.
This section of the report discusses the overall research methodology utilised to evaluate mature social PPP projects in Australia and NZ. Additional details are provided in Appendices C and D.
As Figure 2 illustrates, the focus of the report is to assess whether the service promise, as made by government to service providers and the general community, has been filled through: • the drafting, negotiation and execution of the PPP contract, and • the performance of the contractual obligations (particularly the Key Performance Indicators (KPIs) and the Payment Mechanism (PM)) as managed by the public agency’s contract manager and the PPP Project Co’s FM operator.
2.1 The research brief The scope of work undertaken by The University of Melbourne and Drum Advisory was agreed upon by Infrastructure Partnerships Australia and the Treasury departments of Queensland, New South Wales, Victoria and New Zealand. The scope agreed was: 1. assess whether mature social infrastructure PPPs are meeting the service delivery outcomes for service provider and contract manager groups set out in contractual agreements, media releases and other community information documents 2. compare, where data is available, service provider and contract manager satisfaction with PPP assets and service delivery to that of traditionally procured and delivered assets and services 3. identify what factors contribute to positive service provider satisfaction in PPPs and what factors can be attributed to poor service provider experiences 4. assess whether value for money (VFM) is maintained over the long-term operating phase of social infrastructure PPP facilities, and
The judgements of the contract managers were observed to be heavily based on formal assessments of whether KPI targets were achieved and other contractual obligations. Conversely, those of the service providers were based on a largely excontractual assessment of how well their service needs, and those of their client community, were being fulfilled. This less formal type of assessment, which can be expected to closely correspond with the views of the general public towards PPP projects, is most useful to understanding how well the PPP procurement model is meeting identified service needs.
Figure 2: The service promise in context CONTRACT MANAGEMENT
GOVERNMENT THE SERVICE PROMISE
Public agency, with technical, commercial and legal advisers, translates the service promise into contractual terms and conditions
THE PPP CONTRACT KPIs PM
Is the service promise translated with 100% accuracy
Delivery of services for the 25 to 30 year contract period
100% delivery of stated and intended outputs and outcomes?
DELIVERY OF SERVICES TO END USERS AND COMMUNITY ACTUAL EXPERIENCE
DELIVERY ON THE SERVICE PROMISE?
2.2 Scope of the research The case study projects were selected by the participating jurisdictions on the basis that the projects were representative of their social infrastructure PPP projects. The projects sought were in the domains of health, education, justice or ‘other’.20 For a project to included, it was necessary that: • the PPP contracted services had been delivered for about three or more years of operations, and • it was representative of the current style PPP contracts.21
12
The total number of PPPs meeting these criteria in the participating jurisdictions is 28 and the nominated case study sample was 12 projects, representing 43 per cent of the total. This was considered reasonable given that all four categories of projects were represented, and that the study required access to individuals with knowledge of a project during its operational life. The projects nominated and researched are listed in Appendix C, Table C.1.
UNIVERSITY OF MELBOURNE
