Master Slide

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The Private Sector Perspective on PPP
Projects/Concessions
Stephan Eldh Finanskonsult AB, Independent
Advising Company
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PPP/BOT projects

• Roads
• Trams
• Water Projects
• Hospitals
• Prisons
• Ports/ Harbors
• Airports

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General PPP Structure
Guarantees ?
Public Authority
Concession agreement
Project sponsors
Equity Sub. debt
Senior debt
Concession company SPV
Senior Lenders
Shareholders
Dividends
Repayment
Periodic Maintenance, renovation
Operation maintenance
Construction
Design
Construction
Operation and maintenance
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General about Suppliers

• Suppliers/Sponsors Perspective
• Deliver the services and merchandises
• Core business own commercial risks
• Get paid (as soon as possible)
• After completion move forward to other projects

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General about Investors (within the Suppliers
Parent Company)

• Investors Perspective
• Deliver money (Equity)
• Core business financial risks
• No commercial risks
• Transparency (allocation of the risks)

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How to select a country for PPP activities?

• Suppliers Perspective
• A number of potential PPP projects in the area of
  interest coming up
• Apatite from the International banking and
  Insurance system
• Investors
• Developed legal system
• Developed Institutional framework
• Access to local partners

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How to select a country for PPP activities?

• Investors Perspective
• Apatite from well-known Suppliers
• A number of potential PPP projects coming up
• Apatite from the International banking and
  Insurance system
• Developed legal system
• Developed Institutional framework

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Tendering, general

• Time consuming
• Expensive

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Bid for a PPP project?
Some considerations

• Area of special interest
• The volume of the project (substantial)
• Evaluate tender procedure and documents
• Search for Consortium partners
• Evaluate the changes for the potential Consortium
  to be awarded
• The competitors

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Tender procedure and documents

• What kind procurement process?
• (Prequalification process)
• Risk matrix? Expectations of risk allocations
• Question marks in the tender documents
• Quality of the documents
• Timetable, realistic or not

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Tender procedure and documents
A piece of advise..

• Spend some time and effort to think the hole PPP
  project cycle thru
• Special attention to procurement procedures
• Start the collaboration with the Private
• Partners in early phases
• Special attention to risk allocation (risk
  matrix)
• Be realistic in term of time schedules

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Establishment of the Consortium
Typical issues to be discussed between consortia
members

• Supply of services at different times in the
  project life cycle
• Minimize the risk expose real apatite at own
  risks only
• No apatite on joint and several
  liability/responsibility/guarantees

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The complexity of a PPP project

• Long time commitment
• ( Economically, Politically, Legally and
  Commercially)
• Life cost perspective
• (many considerations)
• Many different Partners involved
• Different perspectives (Suppliers/Banks/Investors/
  Authorities)
• To many decision makers not aware of the
  complexity of a PPP Project
• To find an effective and realistic risk sharing
  structure (e.g. Shadow Tolls, Rider ship,
  Availability)

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The benefits of PPP projects

• Cost efficient - live cost perspective
• save 10 -25
• Projects will come to reality
• Time cut in implementation phase
• over 30 (road project)
• Transfer risks (to the party which has the
  ability to monitor and prize at the lowest cost)

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Finally

• Consult International experts with experiences of
  PPP Projects (carried out PPP Transactions)
• We hope for PPP Projects coming up soon in Turkey

Thank you for your attention finanskonsult_at_telia.c
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