This presentation by Giju Varghese was delivered at the 'Concessioning tourism opportunities in conservation areas and maximising rural development' workshop, held in Maputo between 19-22 March 2012 (Day 2, Session 4, Concessions Contract Management)

1. Presentation Objectives
Contract Management Basis
Objectives of contract management
SANParks’ Approach
Knowledge, skills and attributes
Management Framework
Concession Operations Manual
Communication Channels
Concession Contract Management & Monitoring Benefits
Risks
Contract Management Basis Contract Management
PPP Project Life Cycle What is Contract Management?
Contract engagement is a critical process; A process designed to enable state institutions and
Accuracy, compliance etc are extremely critical concessionaires to meet their respective obligations
Short process
High exposure / focus Objectives of Contract Management
Contract Management: To manage the partnerships and establish good working
Relationship management relationships
Longer process/periods To define roles, responsibilities and protocols;
Mundane / lower exposure To measure outputs against required objectives and regulate
But, the most important part where value is extracted from partnership performance;
Contract end To enable administrative processes required for effective
Planned processes management;
“Contract Management requires structure as in the other 2 phases” To react timeously, manage variations and settle disputes
SANParks Approach SANParks Approach
High risk projects with large capital investment Formal and systematic monitoring system:
Repeated measurement of selected variables to detect changes;
Small, strong contract management function with specialist (legal, ECO)
where necessary for contentious issues Comparison of actual performance / conformance against preset levels and
standards;
Contract Management elevated in the organization with established
mandates Provides early indications of progress or lack thereof in the achievement of
commercialization objectives.
Responsibilities and accountability identified
Resources are established at inception stages to ensure management in a
Management framework is established – allows for consistency in our highly effective, efficient and professional manner.
approach to all PPP projects

2. Knowledge / Skills / Attributes Management Framework
Combination of project management, legal, analytical, financial, business Management mechanisms are supported by legal framework
acumen, market evaluation, environmental / heritage, infrastructure and
(Contract);
support skills;
Comprehensive guidelines
Understand tourism industry management and tourism industry
o Environmental
management and economic realities of concession operations;
o Financial
Knowledge of organizational policy
o Legal / technical
Ability to interpret and implement PPP legislation;
o Empowerment
Negotiation and contract management skills
Performance Bond and Penalty Systems
Concession Operations Manual Communication Channels
Used for the day-to-day management of the contract Managing Communication is critical to success
To inform SANParks and concession staff main contractual elements and to Operational Issues
measure performance.
Matrix communication structure
Defines the roles, responsibilities and protocols to promote positive and
Day-to-day management and communication between SANParks and
effective working relationships
Operator at functionary level
Supplement to legal framework
Policy Issues
Most importantly it covers
Issues not covered by legal framework or existing policies
Communication structures, Mgt principles and guidelines, reporting
requirements & administrative Management. Communication channels to corporate
Electronic copies are available
Benefits Risks
Effectively enforcing legal mechanism Risk of organizational strategy shift
Good understanding, focus and consideration of complexities Functionary level staff not in support of the strategic objectives of
organisation
Consistency in approach
Institutional capacity problems at project level of appropriately trained and
Limiting continual scope creep
experienced staff in terms of the tourism and commercial aspects of
Ability to be firm but fair-minded and flexible where necessary projects
Overall integrity of the process has been maintained securing investor Weaknesses within institution will be exploited by the private sector
mobilization
Organizations require increased institutional training at functionary level
for the effective implementation of the concession operations manual

3. Financial Re-Modelling Seamless Replacement
Business – Dynamic Environment KNP Restaurants
Soon after / mockery of teder /Pvt sector can take advantage – pressure through Cook / BEE / Banker / Needed to go / SANParks capacity for restaurants
various bodies
Muscle Pull
Lodge Concessions: Rand / $, Swine Flu, Mugabe, etc
Fidentia / trade union / etc
Often / way of doing business / collective / Different dynamics
Initiate liquidation / first on hypothec / in charge of process
No market failure / situation still needs to be managed
Interim Contract Mgt during process
Bundling model vs unbundling
Risk transfer / residual values / retender
Appointed / Punda Maria to Bergendal
Guarantees / Min % T/O / Min Rental / Risk transferred
Nat Treasury etc, as good model / Eased material aspects renegotiation
THANK YOU
Giju Varghese
Head: Business Development
South African National Parks
Tel: +27 12 426 5276, Mobile: +27 82 906 1979
Fax: +27 12 343 3849
E-mail: gijuv@sanparks.org