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8/8/2019 VandenBroek Introducing PPP May2010
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V!"#$"B%&$'C&"()*+,"-GLOBAL SOLUTIONS FOR PUBLIC PRIVATE PARTNERSHIPS
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Preface
IamanindependentconsultantspecializedinPublicPrivatePartnershipscommonly
referredtoasPPP.
IbelievethatPPPcansignificantlyenhancetheeffec
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Contents
I. DefiningPPP
II. Accelera
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I. DefiningPPP
II. Accelera
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NoCommonDefini
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PPPisanAlterna
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ModesofPPP
7
Definedbynatureofriskalloca
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ContractualStructure
8
Structureisgeneric,thoughpaymentmechanismdifferspermodeofPPP
PPPCompany
(orSpecial
PurposeVehicle)
Contrac
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I. DefiningPPP
II. Accelera
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InfrastructureDeficit
10
4.0%2.9% 2.6%
7.5-9.0%
5.5-7.0%
3.0%
LowIncomeCountries
MiddleIncomeCountries
HighIncomeCountries
Actual Needed
November26,2007Canadas$123billionmunicipalinfrastructuredeficitisnotthefinalprice
tagforallitsinfrastructureneeds,saysaconstruc
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FiscalConstraints
11
Limitpossibilitytoincreaseinfrastructurespending
Sources:CIAFactbook2007and2010,Visualeconomics
2.5%
Canada:60.8%
$814billion
11.9%
US:60.8%
$8.7trillion
1.3%
Argen
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PrivateInfrastructureFinance
12
Significantgrowthinthedevelopingworldtosupportfundingofinfrastructuredeficit
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
1990199119921993199419951996199719981999200020012002200320042005200620072008
InvestmentinPhysica
lAssetsinUSDmillion
EastAsiaandPacific EuropeandCentralAsia La
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PrivateInfrastructureFinance
13
andalsoinsomeofthematuredeconomies
1.29 1.05 0.70
4.95
8.92
7.37 7.35
4.96
2001 2002 2003 2004 2005 2006 2007 2008
e.g.mainlandEurope e.g.UK
0.431.17
2.21 2.48 2.4
4.73
3.32
8.19
3.46
5.254.26
9.61
7.326.54
19951996199719981999200020012002200320042005200620072008
Sources:PublicPrivateFinance
CAGR
21%CAGR
17%
Valueofprojectscontractedinbillion) Valueofprojectscontractedinbillion
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PPPLeaders
14
Deliveringsome10-30%oftheirinfrastructureservicesthroughPPP
100
5055
50
32
935
450400
215
126100
19
0
100
200
300
400
500
600
700
800
900
1000
0
20
40
60
80
100
120
UK2008 India2009 Korea2010 MainlandEurope2001-2008
Australia2005 Canada2010 SouthAfrica2009
Numberof
Projects
Valueofprojects
inbillionUSD
ValueofProjects( inUSDbil lion) NumberofProjects
Sources:www.pppindindiadatabase.com,UniversityofSydney,IFSL,The
ConferenceBoardofCanada,Na
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I. DefiningPPP
II. Accelera
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InfrastructureRisks
16
90%
73%
40%
Flyvbjerg'sReview
of258projects
worldwide
NAO'sreviewofcostoverrunsinthe
UK
KPMG'sreviewof
1,035projectsin
India
Costoverruns
82%
70%
60%
KPMG'sreviewof
1,035projectsin
India
NAO'sreviewof
delaysintheUK
EIBreviewof50
projectswithdelay
>1year
Delays Lessdemand(e.g.roads)
PercentageofProjects PercentageofProjects
Deliveringinfrastructurethroughtradi
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Effec
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CostSavings
18
11%
20%
28%
Netherlands
UK
Australia
AverageCostSavingsofPPPversusTradiJonal
PublicSectorComparatorOutcome
Pros
Ra
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PerformanceImprovement
19
12percentincreaseinresiden
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Transac
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CostofCapital
21
Costofpublicfinanceappeartobelowerthancostofprivatefinance,butaretheyreally?
PublicFinance
Costofcapitalisdefinedbytheriskfreeinterestrate
approximatedbytheinterestrate
ongovernmentbonds
PrivateFinance
Costofcapitalisdefinedbytheriskfreerateplusariskpremiuminvestors
andbanksrequirefortherisksthey
incur
Atfirstsight
creditworthinessoftherespec
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I. DefiningPPP
II. Accelera
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PPPscanFail
23
TollRoadsinMexico
Between1987and1995,52projects(25compe
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PPPscanFail
24
HospitalsinAustralia
TheVictoriagovernmentcontractedwithconsor
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PPPscanFail
25
EurotunnelbetweenUKandFrance
In1986,theEurotunnelgroupwasfoundedtocarryoutajointprojectbetweentheUnited
KingdomandFrancetobuildarailtunnelundertheEnglishChannel.
Thees
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I. DefiningPPP
II. Accelera
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PPPPolicy
27
Ensureacohesive,coherentandcomprehensivepolicytailoredtoyourobjec
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PPPLifeCycle
28
EnsurebankableandaffordablePPPsthatprovidevalueformoneyandapplytransparentand
compe
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Disclaimer
Theinforma
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