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Public Private Partnership Investment and Construction

Public Private Partnership Investment and Construction. Armando R. Araujo Cairo 2003. Government. Consumers. Investors. Concessionaire. Constructs Plant. Uses Plant. Supplies. Banks. Maintenance. Contractor. Equipment Supplier. Insurance. Operator. Investors. Banks. Government.

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Public Private Partnership Investment and Construction

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  1. Public Private Partnership Investment and Construction Armando R. Araujo Cairo 2003

  2. Government Consumers Investors Concessionaire Constructs Plant Uses Plant Supplies Banks Maintenance Contractor Equipment Supplier Insurance Operator

  3. Investors Banks Government Consumers Government Agency Concessionaire or Operator Constructs Plant Supplies Uses Plant Maintenance Contractor Equipment Supplier Insurance Operator

  4. Country Risks • PoliticalRisks (political situation / fiscal regime / expropriation / cancellation) • CommercialRisks (economic situation / inflation / exchange rate) • LegalRisks (proprietary legislation / environmental legislation / sustainability of laws / appeals / justice)

  5. Project Risks • ConstructionRisks • Design ==> output, efficiency • Cost of Construction (geology, quantities) • Completion Delays • No completion • Bad performance by Contractor

  6. Project Risks (Cont) • OperationalRisks • Other investments not materializing • technical risks (performance) • demand risks (market for services) • supply risks (consumables input) • force majeure

  7. Project Risks (Cont) • FinancialRisks • inflation • arrears or non-payment of services • exchange rate (devaluation and availability) • EnvironmentalRisks • licenses • penalties • new rules (public opposition)

  8. Turn-Key Contracts • Risks (division) • Design (responsibility / transfer ownership of technology) • Supervision of Works (partial receptions) • Payment Schedule (this is one of the most difficult issues ==> not only economic issue but risk)

  9. Pre-Qualification • Base ==> Standard Document for Works • Important Agents as Part of Applicant • Balance Risks x Restricted Competition • Experience of Sub-contractors • Requirements for Concessionaire Company • Project Information Memorandum • Advance Criteria for Award

  10. Bidding Document for Turn-Key • Design Responsibility • Supervision of Works • Price Schedules • Avoid Up-front Loading • Divide Activities of Easy Measure • Payment Schedules

  11. Bidding Documents for Concession • Two- stages x One-Stage • Technical Evaluation • Avoid Requiring Investment Plan • Use Performance Indicators • Concession Contract • Investments • Operation & Maintenance

  12. Service to provide Concession Area Rights Concessionaire Obligations Concessionaire Regulation Applicable Regulator’s Power Penalties for non-compliance Tariff Regime Guarantees Duration Contract Termination; Renewal Dispute Resolution Applicable Law Concession Contract

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