Where a service is outsourced to the private sector through a PPP arrangement, the government will still need to be actively involved in the implementation of the project and monitoring performance for the operator. The following issues need to be considered in
relation to the on-going regulation and monitoring of the project:
- Is there a regulator in place or to be put in place to monitor the service provider once the project has been implemented?
- If not, what entity is to monitor performance of the operator? Is this to be established by the contract? Will the awarding authority or other entity carry out this task? Will there be sufficient resource remaining within the awarding authority following letting of the contract to monitor the operator’s performance? If not, can such monitoring be sub-contracted out?
- If there is to be a regulator, what are the powers of the regulator? Monitoring and supervising performance and costs only, or to include powers and duties such as tariff setting, enforcement of operator performance, etc.
- Are the powers of the regulator consistent with the terms of the contract? In particular, if the regulator has the power to set tariffs, is there any link required between the levels of the tariffs and the contract? What happens if the regulator does not increase tariffs to levels that correspond with the return set out in the contract?
- Is there a contractual or other relationship between the regulator and the service provider?
- Is the regulator adequately staffed to perform its duties?
- What is the relationship between the regulator and the Government – i.e. is the regulator to be independent or part of Government, can his decisions be overturned by Government?
- Is there a mechanism for the service provider to appeal against decisions of the regulator?