One of the most important issues the consortium has to address is structure. Its members need to decide the most appropriate structure to adopt in order to finance and implement the procuring authority’s PPP project successfully.

This PPP Guide assumes a project financing approach. As such, normally this means the consortium will create a special purpose company, known as a Special Purpose Vehicle, in order to implement the PPP project. The consortium would not normally adopt an unincorporated joint venture or a partnership type structure.

Specialized knowledge is required to ensure a winning bid, and the consortium bidding for the procuring authority’s PPP project will be keen to put this in place as soon as possible. Despite the fact that large sponsors have internal resources that can be used to deal with the preparation of the consortium’s RFP response, it is common practice to use external advisers as well. See diagram 6A.8 below that sets out how the consortium’s sponsors and staff work together with external advisers.

Following a successful PPP project screening, partnerships will be forged between like-minded organizations and a consortium will be formed with a view to responding to the procuring authority’s RFP.

Following on from a successful PPP project screening, and once partnerships have been formed between like-minded organizations in the consortium (see section 6.4), the two main activities that the consortium will carry out are preparing the response to the procuring authority’s RFP and making the investment decision about whether to submit a consortium response to it.

Section 6.7 below sets out all the key activities that need to be completed by the consortium in order for a RFP response to be completed and submitted.

There are many private parties involved in a PPP project and each has its own specific reasons for investing in such a project. Influencing factors include a party’s investment appetite, together with its corporate strategy; the mandate it has to invest in specific sectors/countries; and how expensive or costly it is to bid for PPP projects in a particular country.

This section describes the approach taken by the private party in a PPP project. The private party is the private sector entity that is successful in securing the right to implement and operate the procuring authority’s PPP project. A variety of names may be used to describe this private party. These terms include the private partner, the consortium and the Special Purpose Vehicle (SPV). Such terms are interchangeable and this section uses all of them.

See Appendix 6A

At the end of this phase, the authority has in place an enforceable and effective contract, duly executed after the accomplishment of prior conditions.

In some processes, financing has been arranged within this phase (as a prior condition to contract signature), while in other processes it will be arranged before construction commences. This can be either because of a condition embedded in the contract or as a practical consideration, since the standard approach by any investor will be to only commence work after financial close.

Some governments provide for independent oversight of the tender process while it is occurring to ensure that it is fair and transparent.

For example, governments in Australia and New Zealand appoint a probity practitioner to ensure that a transparent and robust process is followed at all times. The probity practitioner is independent of the project team and is responsible for monitoring the bidding process and for assessing and reporting on whether the process has been conducted to the required standards.