In the long-term lifecycle of Public-Private Partnerships (PPPs), effectively managing Operational and Performance Risks in PPP Contracts is paramount, as the sustained delivery of high-quality public services and the achievement of value for money hinge directly on the private partner's ability to operate and maintain the infrastructure efficiently and effectively over decades. Unlike construction risks, operational risks are dynamic and evolve over the project's lifespan, encompassing a wide array of challenges from service delivery failures and cost overruns to technological obsolescence and unforeseen maintenance issues, all of which can significantly impact the project's financial viability and public satisfaction. This comprehensive training course is meticulously designed to equip public sector officials, contract managers, project developers, operators, and legal professionals with the advanced knowledge and practical strategies required to identify, assess, allocate, and mitigate operational and performance risks throughout the PPP contract term, ensuring continuous service delivery, compliance with service level agreements, and optimal asset management. Without robust expertise in Operational and Performance Risks in PPP Contracts, stakeholders risk service deterioration, costly disputes, and a failure to realize the intended long-term benefits of their PPP investments, underscoring the vital need for specialized expertise in this critical domain.

Duration: 10 Days

Target Audience

• Public Sector Contract Managers and Administrators
• PPP Unit Professionals involved in post-award management
• Private Sector Project Directors and Operations Managers
• Performance Monitoring Specialists in public agencies
• Legal Professionals specializing in contract enforcement
• Financial Analysts involved in operational phase monitoring
• Technical Experts overseeing asset management and maintenance
• Auditors and Oversight Body Personnel
• Regulators of infrastructure and public services
• Anyone involved in the long-term management and oversight of operational PPPs.

Objectives

• Understand the specific nature and complexities of operational and performance risks in PPPs.
• Learn about the various types of operational risks (technical, commercial, contractual, external).
• Acquire skills in identifying and assessing operational risks throughout the contract term.
• Comprehend techniques for optimally allocating operational risks between public and private parties.
• Explore strategies for mitigating operational risks through contractual and management tools.
• Understand the importance of robust Service Level Agreements (SLAs) and Key Performance Indicators (KPIs).
• Gain insights into designing effective payment mechanisms linked to performance.
• Develop a practical understanding of monitoring and reporting operational performance.
• Master managing variations, renegotiations, and disputes during the operational phase.
• Acquire skills in ensuring long-term asset integrity and maintenance.
• Learn to apply international best practices and guidelines for operational risk management.
• Comprehend techniques for managing technology obsolescence and innovation.
• Explore strategies for engaging stakeholders in operational oversight.
• Understand the importance of handback planning and asset transfer.
• Develop the ability to lead and oversee effective operational risk management in PPPs.

Course Content

Module 1: Introduction to Operational and Performance Risks in PPPs

• Definition of operational and performance risks in PPP contracts.
• Why these risks are critical for long-term project success and VfM.
• Distinction from construction risks.
• Consequences of unmanaged operational risks (service failure, penalties, disputes).
• Overview of the operational phase in a typical PPP lifecycle.

Module 2: Types of Operational Risks

• Service delivery risks: quality, availability, reliability, capacity.
• Cost risks: O&M cost overruns, inflation, utility price fluctuations.
• Demand/Revenue risks (for user-pays projects): lower-than-forecast usage, tariff risk.
• Interface risks: coordination with public sector, third parties.
• Technology risks: obsolescence, innovation failure.
• External risks: force majeure, regulatory changes, social acceptance.

Module 3: Risk Identification and Assessment during Operations

• Methodologies for identifying operational risks (e.g., risk registers, workshops, incident analysis).
• Qualitative and quantitative assessment of operational risks.
• Probability and impact analysis specific to operational activities.
• Early warning indicators for potential performance issues.
• Role of performance audits and reviews.

Module 4: Optimal Allocation of Operational and Performance Risks

• Principles of risk allocation in operations (to the party best able to manage it).
• Allocation of specific operational risks between public authority and private operator.
• Impact of risk allocation on payment mechanisms and incentives.
• Balancing risk transfer with operator capabilities and market conditions.
• The "value for money" implications of operational risk allocation.

Module 5: Service Level Agreements (SLAs) and Key Performance Indicators (KPIs)

• Designing robust, measurable, and enforceable SLAs.
• Developing relevant and unambiguous KPIs for service quality and efficiency.
• Linking KPIs to payment mechanisms (performance-based payments, deductions).
• Monitoring and reporting on SLA/KPI compliance.
• Best practices in drafting performance specifications.

Module 6: Payment Mechanisms and Performance Incentives

• Types of payment mechanisms in the operational phase (e.g., availability payments, shadow tolls, user fees).
• How payment mechanisms incentivize performance and risk management.
• Deductions for non-performance and penalties.
• Gain-share/pain-share mechanisms for cost savings or revenue upside.
• Legal and contractual aspects of payment provisions.

Module 7: Asset Management and Lifecycle Maintenance Risks

• Importance of whole-life costing and maintenance planning.
• Risks related to asset deterioration, major repairs, and replacements.
• Allocation of lifecycle maintenance responsibilities.
• Performance standards for asset condition.
• Handback requirements and asset integrity at contract expiry.

Module 8: Managing Variations and Contractual Changes

• Procedures for managing changes to the contract scope or terms during operations.
• Assessing the impact of variations on performance, cost, and risk.
• Negotiating fair and transparent amendments.
• Preventing opportunistic renegotiations.
• Documenting and approving all contractual changes.

Module 9: Dispute Avoidance and Resolution in Operations

• Proactive strategies for avoiding disputes during the operational phase.
• Early warning systems and issue escalation.
• Utilizing informal negotiation and senior management intervention.
• Role of dispute boards, mediation, and expert determination for operational disputes.
• Lessons learned from common operational disputes.

Module 10: Monitoring, Reporting, and Auditing Performance

• Establishing robust monitoring systems for operational performance.
• Regular reporting requirements for the private partner.
• Public sector's role in verifying data and performance reports.
• Independent performance audits and technical reviews.
• Utilizing digital tools for real-time performance monitoring.

Module 11: Technology Obsolescence and Innovation Risks

• Risks associated with rapid technological advancements impacting project assets.
• Contractual provisions for technology upgrades and innovation.
• Balancing flexibility for innovation with public sector control.
• Allocation of costs and benefits of new technologies.
• Case studies of technology risk management in PPPs.

Module 12: Stakeholder Engagement and Public Relations

• Managing relationships with end-users, communities, and other stakeholders.
• Addressing public complaints and feedback mechanisms.
• Communicating project performance and benefits.
• Managing reputational risks from operational issues.
• Building and maintaining public support for the PPP.

Module 13: Emergency Preparedness and Business Continuity

• Planning for unforeseen events (e.g., natural disasters, pandemics, major accidents).
• Developing business continuity and disaster recovery plans.
• Allocation of responsibilities and costs for emergency response.
• Legal and contractual provisions for force majeure events.
• Lessons learned from major disruptions.

Module 14: Handback Planning and Asset Transfer

• Detailed planning for the end of the concession period.
• Ensuring assets meet specified handback conditions.
• Remedial works and rectification periods.
• Legal and financial implications of asset transfer.
• Preparing the public sector for asset takeover and continued operation.

Module 15: Case Studies and Best Practices in Operational Risk Management

• In-depth analysis of specific PPP projects with significant operational challenges.
• Discussion of successful and unsuccessful strategies for managing operational risks.
• Lessons learned from major operational failures in infrastructure projects.
• Review of international best practices in PPP contract management and oversight.
• Workshop: Identifying and mitigating operational risks for a hypothetical PPP project.

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 7 working days before commencement of the training.