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How to Integrate Claims in Public Private Partnerships

Indian International Airports

 

STUDENT PAPER

By Yashwanth Mula

SKEMA Business School

Lille, France

 



ABSTRACT

Public-Private Partnerships (PPPs) are increasing daily in most developing nations such as India, for bringing innovation with proper expertise to deliver services or products. However, the inefficiency in PPP projects occasionally is because of several reasons which mainly arise due to the claims made without prior commitment of the contracting parties. The motto of this paper is by using Multi-Attribute Decision Making analysis and in that with additive weighing technique to determine which is the best alternative method to ensure that the claims are properly integrated in PPPs.  Based on the analysis, contracting parties should understand well a concession contract model and adopt it. Also, considered in it, with a detailed planning and allowing appropriate change order requests as soon as possible.

Key words: Claims, PPP, Construction, Concession, Agreement, Contract, Greenfield, India.

INTRODUCTION

A PPP or 3P is Public-Private-Partnership, which is defined in many ways, generally, it can be referred to as a contractual arrangement between a public-sector entity and a private sector organisation, ensuring that skills, risks and assets are shared together for the provision of products and/or services. There are several types of contracts in PPP such as Build-Operate-Transfer (BOT), Design-Build-Finance-Operate-Maintenance (DBFOM), Concession and few more etc.[1]

There are many issues causing failures in PPP contraction projects in India. Issues, such as the implementation of improper contract models like Concession, BOT, DBFOM, Management etc, inflated traffic projections, corruption, land acquisition, red tape, lack of safety clearances on time.[2] These can result in a compounded issue like improper risk transfer between the parties which create controversies that could delay or stall the overall process and delivery of the intended services. Such issues can be minimised by understanding the requirements, the socio-economic benefits of the intended service and by initially considering that the appropriate contract models are well interpreted and selected by the respective contracting parties. In addition, clear-cut claims of both the parties must be negotiated initially, which can reduce the controversies towards the later stages of the project.

For mega-infrastructure projects, claims made in accordance to their own obligations will often cause controversies between parties. Therefore, “How can Claims help contracting parties perform efficiently in PPP projects”. So, in this case, considering that claims can be an efficient way to ensure both parties face minimum or no issues, is mainly by taking into account that, the additional clauses of claims which are beneficial for either parties are evaluated and then to be incorporated, considering the reasons particularly for arise of claims issues such as, delay in payments, force majeure, schedule delays, liquidated damages, disputes, change order and proposal requests etc.

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Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Mula, Y. (2018). How to Integrate Claims in Public Private Partnerships: Indian International Airports, PM World Journal, Volume VII, Issue VII – July.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/07/pmwj72-Jul2018-Mula-integrate-claims-in-public-private-partnerships.pdf



About the Author


Yashwanth Mula

Lille, France

 

 

 

Yashwant Mula is an MSc student in SKEMA Business School, Masters in Project and Programme Management & Business Development (PPMBD). He graduated from National Institute of Technology-Calicut, India and holds a Bachelor’s in Technology degree in Civil Engineering. In 2016, he worked at Sri Vatsa Engineers, a local construction company, as assistant site engineer in Visakhapatnam, Andhra Pradesh, India. He has both project management and civil engineering education and background. He currently lives in Lille, France and can be contacted at [email protected].

 

[1] See Yong Hee Kong (2007). Different models on PPP  https://ppiaf.org/sites/ppiaf.org/files/documents/toolkits/Cross-Border-Infrastructure-Toolkit/Cross-Border%20Compilation%20ver%2029%20Jan%2007/Session%204%20-%20Private%20Sector%20Participation/Private%20Sector_02%20Diferent%20Models%20of%20PPP%20-%2029%20Jan%2007.pdf 

[2] Arindum Chaudhuri (2013). Why the public-private partnership model has failed in India http://www.thesundayindian.com/en/story/why-the-public-private-partnership-model-has-failed-in-india/46608/