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Body of Knowledge:
Strategy Delivery and Commissioning
From a practical perspective, the Value for Money generated through a PPP depends on the quality of the private partner and the government’s contract management systems and teams. This is especially true for PPP contracts that have some form of risk retention on the part of the government, be it in...
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Body of Knowledge:
PPP Introduction and Overview
This PPP Guide focuses on PPPs as a method for procuring infrastructure development and management on the basis of private finance, as introduced in box 1.3. The definition of a private finance PPP provided in this PPP Guide implies a number of features which need to be present in a PPP contract to...
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Body of Knowledge:
Structuring and Drafting the Tender and Contract
This subsection introduces a list of the most relevant risks as they are commonly identified in different guides and protocols (while acknowledging that there may be material differences in the classification of risks from some country practices to others).
Appendix A provides a deeper explanation...
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Body of Knowledge:
Appendix Bid Preparation and Submittal the private sector perspective
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.
Implementing the PPP project will require the implementation of material construction, operations,...
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Body of Knowledge:
Strategy Delivery and Commissioning
The following key activities typically occur during the Construction Phase of a PPP.
The private partner must establish itself on site and obtain the necessary permits and clearances to enable it to carry out the construction works;
The private partner must finalize the design for the construction...
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Body of Knowledge:
Establishing a PPP Framework
The diversity of legal traditions and PPP types shows there is no single best way to document and give force to a PPP framework. Rather, the right way to establish a PPP depends on the administrative and legal traditions in the country, and the government’s objectives. This section looks at the...
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Body of Knowledge:
Appendix Bid Preparation and Submittal the private sector perspective
6.8.1 Negotiating with Banks
The consortium’s financial advisory team prepares the Project Information Memorandum (PIM). The PIM sets out details of the PPP project, including the anticipated key contracts and projected revenues. Assuming a financing competition, a group of funders will be asked to...
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Body of Knowledge:
Strategy Delivery and Commissioning
4.2.1. The Role and Responsibilities of the Private Partner
To enable the government to effectively manage the contract, certain roles and responsibilities must be required of the private partner through the contract. It is very important that the reporting system of the private partner complies...
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Body of Knowledge:
Operations and Handback
As in the Construction Phase, during the Operations Phase, the immediate mechanism to deal with non-compliance and contract breaches is typically a mechanism that has financial consequences for the private partner. However, the system and instruments for managing under-performance (by providing...
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Body of Knowledge:
PPP Introduction and Overview
This section explains further the basic structure of a private finance PPP, assuming the form (or the scope) of a DBFOM that was first introduced in section 4.
Figure 1.10 illustrates the basic structure of a common PPP (in which all of the equity in the SPV is provided by the private sector). This...
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Body of Knowledge:
PPP Introduction and Overview
a) The Challenge of the Availability of Long-Term Finance
Private finance PPPs require long-term finance, the majority of which should be in the form of debt so as to maximize financial efficiency through gearing[51] (see section 7).
A sound financial structure requires that the debt is denominated...
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Body of Knowledge:
Establishing a PPP Framework
Countries vary widely in how they document and give force to PPP frameworks. Countries with “common law”[27] legal systems tend to rely on policy documents and administrative guidance materials. Countries with “civil law”[28] legal systems are more likely to enact the PPP framework in statute law,...
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Body of Knowledge:
Establishing a PPP Framework
Many governments with successful PPP programs have created a dedicated unit (either as a separate entity, or within an existing department) tasked with implementing, facilitating, or advising on PPPs. (see box 2.15 for example) These are referred to as PPP units. Their roles often include the...
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Body of Knowledge:
Structuring and Drafting the Tender and Contract
Evaluation criteria
Broadly speaking, there are two main types of processes in terms of evaluation criteria.
Processes based only on price (also referred to as least cost selection) in which the technical factors are evaluated on a pass/fail basis. This is sometimes called an auction; however it...
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Body of Knowledge:
Establishing a PPP Framework
The scope of the PPP framework indicates the types of projects for which the framework will apply. Scopes are generally defined by jurisdiction, sector, size, and contract type. It is good practice for designers of a framework to consider each of these dimensions, and to be explicit in the...
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Body of Knowledge:
Establishing a PPP Framework
As an alternative approach to originating and developing PPP project ideas, some governments accept unsolicited or privately-initiated PPP projects. By welcoming “privately-initiated” projects, governments can harness information and ideas that private firms have about how to provide services...
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Body of Knowledge:
Operations and Handback
Variation management is closely connected with PPP agreement management and relates to the creation of mechanisms to enable changes to the PPP agreement. Such changes may be necessary as a result of a change in circumstances that could not be anticipated or quantified when the PPP agreement was...
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Body of Knowledge:
PPP Introduction and Overview
7.2.1. Sources of Funds
The two main types of funds raised by a project company, as in any corporate finance structure, are debt and equity.
Debt may be in the form of loans or bonds. Equity may be take the form of pure equity or capital shares, and quasi-equity products (junior or subordinated...
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Body of Knowledge:
PPP Introduction and Overview
A framework is defined by the Oxford English Dictionary as “a basic structure underlying a system, concept or text”.
The Spanish dictionary defines framework as “limits or circumstances that surround an issue or a period of story”.
PPPs involve complex process management on a number of fronts (...
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Body of Knowledge:
Appendix Bid Preparation and Submittal the private sector perspective
The complexity of the procuring authority’s PPP project requires the consortium to adopt a project management approach to ensure that all necessary experts and skills are managed in an effective and timely manner. Upon signing the Letter of Intent (LOI), Memorandum of Understanding (MoU), or...
