D. Consider the interests of the Project Company, including any changes in its circumstances

The relationship between the Procuring Authority and the Project Company is key to the success of a PPP.  The first step in managing the relationship with the Project Company is to ensure that both parties have a good understanding of one another’s objectives and points of view. This will create a common vision and boost cooperation and also help avoid surprises. Goals and expectations should be made clear as early as possible and discussed openly. While this will often be covered in the procurement phase, they should be revisited at regular intervals, such as during transitions between project phases, when staff are likely to change, as is detailed in Section 3.1 (Transitions).

As PPPs are long-term partnerships, team dynamics and personalities play an important role in defining the primary relationship between the Procuring Authority and the Project Company.

Although the Project Company and the Procuring Authority may have different commercial and non-commercial drivers and incentives, they are ultimately delivering the same project and a collaborative approach is important. The Procuring Authority should seek information on how it is regarded by the Project Company, with a view to improving the relationship over time.

A positive relationship between the Procuring Authority and the Project Company is also a responsibility of the Project Company. Various factors may affect how the Project Company will approach the relationship with the Procuring Authority including its underlying financial situation, its equity investors’ priorities and whether adequate personnel and resources have been allocated to the project.     

For example, there may be circumstances where the underlying financial situation of the Project Company will influence its willingness to engage in collaborative behaviours. When the Project Company is making a healthy profit, it may be more likely to be more flexible and cooperative in achieving shared wins, even if those changes do not have an obvious financial benefit. On the other hand, if the underlying economics of the Project Company’s role in the project are not as positive as expected, there is likely to be pressure on the Project Company to cut costs, which may have an impact on the relationship. This situation highlights the importance of maintaining good communication between the parties, so the Procuring Authority knows what is happening and how it may be able to best work with the Project Company.

Example – Advantages of a strong relationship

The Intercity Express Programme project in the UK was forced to make changes to the train design due to delays in external infrastructure works, and the close working relationship between the Procuring Authority and Project Company allowed them to mitigate the delay.

For more information, see the Intercity Express Programme Case Study.

E. Ensure appropriately frequent meetings are held, including at the relevant strategic levels

F. Follow formal communication requirements where required

G. Be aware of the positive and negative aspects of appointing Project Company board members

H. Consider co-location of office space with the Project Company, which can benefit the relationship

I. Use contractual provisions to protect the rights of the Procuring Authority rather than as punitive measures

J. Focus on a positive relationship, even in the presence of ongoing disputes