Understanding PPP: Improving Delivery & Value for Money

This course forms module 2 of the Public Procurement for Infrastrcuture & Understanding PPP: Improving Delivery & Value for Money Training Week. Attend both modules to save 15% on the combined price. All PPP infrastructure projects originate from within the public sector. The definition of public procurement covers both conventionally funded contracts and more innovative types of procurement such as Public Private Partnerships (PPP) and Private Finance Initiatives (PFI).The procurement process spans the whole life cycle of the procurement from conception and definition of need through to the end of the useful life of an asset or the end of a contract. It includes pre-contract activities such as market sounding, sourcing and post contract activities such as contract management and supplier relationship management activities. Public procurement is regulated in many countries and overseen by public procurement agencies. For example, throughout the European Union (EU) procurement is regulated through the provisions of the Treaty on the Functioning of the European Union (TFEU, formerly known as the EC Treaty) and the EC Directives. Best practice public procurement is subject to; inter alia, the following principles of: Freedom of movement of goods Freedom of establishment Freedom to provide services and the principles derived from these such as: Equal treatment Non-discrimination Mutual recognition Proportionality Transparency Legislative and policy framework PPP contracts are complex, time consuming and expensive to procure. Authorities cannot issue a standard complete contract and expect bidders to accept its terms without comment. The nature of PPP Contracts makes them unsuitable for simple straightforward procurements for various reasons including: risk allocation, Scope of Works / Supplies / Services, funding and structure. The process to be followed by an Authority in awarding a PPP Contract should be designed to ensure the Authority has the best chance of selecting the PPP Private Sector Partner best able to deliver the Authority's required outcomes in a cost effective way. Course objectives In this programme the delegates will gain the knowledge and business acumen on the following key areas: Stages in the Public Procurement of PPP projects Legislation covering Public Procurement How Authorities can generate and maximise market interest in their PPP project Key issues Authorities should consider at each stage of the process How Authorities can get the best outcome from each stage of the process How to avoid common procurement pitfalls Promoting PPP opportunities amongst potential investors Infrastructure needs analysis Skills in the development of strategic service models Project funding versus project financing – matching needs to affordability Investment decision making - best practice business case approval methodology Who should attend? Public Sector Senior Officials and Investment Decision Makers Public Sector Planners Policy Development Directors Government and Public Service Officers Project Financiers/Investors Contractors Facilities Management Companies Utilities Commercial Banks Project Law Firms Financial Advisors Environmental Consultants Development Agencies Programme objectives By the end of programme delegates will be able to understand: Principles of Public Procurement Strategic service modelling Project appraisal Project finance/project funding PPP structures Project preparation and Value for Money Successful procurement and delivery, including the use of PPP Post contract / Operational aspects of infrastructure projects Training methodology This programme is designed to encourage delegate participation through a combination of group discussion, video, site visits, practical exercises and case studies.
Day 1 Understanding Public Private Partnerships Video: A quick introduction to the concepts of Public Private Partnerships Definition of PPP Relationships between government and the private sector Provision public infrastructure Contractual agreements Private sector finance Range of PPPs Operate and maintain Build and finance Design build finance and maintain Design build finance and maintain – operate Concession Video: A public-private partnership reshapes healthcare for the people of Lesotho Lesotho's new hospital, with its three filter clinics, is bringing modern healthcare to half a million people. The new hospital, a public private partnership also serves as the national teaching and referral hospital. Principles of PPP Output specification Long-term contractual arrangements Value for money Transfer of risk Market competition Whole life costing Structure of special purpose vehicle PPP and traditional procurement Governance Participation Decency Transparency Accountability Fairness Efficiency Case study: UN good governance guidelines Good governance in managing PPPs is essential to ensure that the private sector’s involvement yields the maximum benefit for society. Implementing the 7 key principles for good governance will significantly improve the successful development of PPPs. The case study utilises the UNECE: ‘Guidebook on Promoting Good Governance in Public Private Partnerships.’ Day 2 Site Visits Two site visits are arranged for day four of the programme. Visit 1: University College Hospital London (Morning) University College London Hospitals NHS Foundation Trust (UCLH) is one of the most complex NHS trusts in the UK, serving a large and diverse population. The Trust has a turnover of £882 million and contracts with over 70 primary care trust commissioning bodies to provide services. The hospitals see over 950,000 outpatients and admit over 156,000 patients each year. The Trust is a Public Private Partnership. Format for the visit Presentation on the development of the Hospital PPP with a focus on the contract award process, design, construction, contract award and contract management. Guided tour of the key areas within the facility. Particular emphasis will be placed during the walking tour on facilities management. The visit will conclude with a question and answer session. Participants will have the opportunity to ask questions relating to any aspect of the presentation or tour. Visit 2: Treasury Building (Afternoon) In 1999 Exchequer Partnership Plc (EP), a consortium of architects, developers and service providers was granted the lease of the building and a contract to provide high standard serviced office accommodation for 35 years through a Private Finance Initiative agreement. The complete refurbishment of 1 Horse Guards Road, formerly known as Government Office Great George Street (GOGGS), has allowed all Treasury staff to be housed in one building for the first time in 50 years. Format for the visit Presentation on the development of the facility with a focus on the contract award process, design, refurbishment, contract award and contract management. Management of the redesign of an old building to modern standards. Guided tour of the key areas within the facility. Particular emphasis will be placed during the walking tour on facilities management. The visit will conclude with a question and answer session. Participants will have the opportunity to ask questions relating to any aspect of the presentation or tour. Day 3 Improving Delivery and Value for Money (VfM) Funding Non-recourse finance Limited recourse finance Debt and equity Cash flows Gearing Tax benefits Public sector use of revenue Long term debt funding Why use PPP? Focus on outputs Projects affordability VfM More efficiency in procurement Faster project delivery with more projects in a defined timeframe Risks are allocated to the party best able to manage the risk Sustainability Asset utilisation Risks in PPP Optimal risk sharing Developing a risk matrix Risk management Identification Allocation Mitigation Workshop: Creating a risk register All infrastructure projects are subject to risk: at the planning and consultation stage, the implementation stage and even during the contract management phase. In the PPP planning process, one of the first tasks is to identify all the risks at the different stages of the project. A key aspect of the PPP structure is its ability to help facilitate the transferring of risk to the party that is best suited to manage or minimise it. Participants will create a risk register based around a case study of a DBFO project. What makes a successful PPP? Political will Government commitment PPP champion Clear output specification Appropriate risk sharing Value for money Performance management Course summary and close