Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.
-
Upload
jeffry-warren -
Category
Documents
-
view
224 -
download
0
Transcript of Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.
![Page 1: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/1.jpg)
Learning from UK PPP Experience
Andrew FraiserAllen & Overy
24 March 2004
![Page 2: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/2.jpg)
Overview
Background to PPP in the UK
How the UK PPP market has developed
Case Study
![Page 3: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/3.jpg)
State of the Nation….early 1990s
Lowest ever levels of taxation Strains on the Government purse Construction industry suffering from effects of
recession Significant backlog of maintenance in government
accommodation New build projects consistently over budget Working for Government seen as the “last resort”
![Page 4: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/4.jpg)
The Maintenance Backlog
15 billion Euros backlog in government social housing
Hospital waiting lists longest in history due to lack of accommodation
6 out of 7 schools at end of their design lives
MOST CAPITAL INVESTMENT FOCUSSED ON REPAIRS
![Page 5: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/5.jpg)
The Case for PPP
21st century buildings bring 21st century benefits
New buildings allow civil servants to divert time to better causes
Acknowledgement that private sector more innovative than the public sector
Accounting - off balance sheet treatment of asset
Transfers the risk of whole-life costing to the private sector
No government borrowing required
![Page 6: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/6.jpg)
What does it involve?
The purchase of a service, rather than an asset
Transferring the responsibility for the asset that delivers the service to the private sector
Allowing management of risks to be carried out by parties that are best placed to manage risks
In some cases the transfer of staff from the public sector to the private sector
![Page 7: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/7.jpg)
Central Government Projects
Transport Roads
Bridges
Trams
Underground
Prisons
Defence
![Page 8: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/8.jpg)
Local Government Focus
Schools
Courts
Housing
Hospitals
Street lighting
Fire Stations
![Page 9: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/9.jpg)
RESULTS
![Page 10: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/10.jpg)
By 1999…
First schools project closed with more than 20 stalled in procurement
Average procurement timetable more than 3 years
All housing pathfinder projects had stalled
Most hospital projects had been cancelled
Significant number of projects unaffordable
![Page 11: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/11.jpg)
Summer, 2003
50 schools projects closed with 20 operational
More than 20 hospital project closed
First three housing projects closed
More than 50 other Local Government accommodation projects closed
![Page 12: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/12.jpg)
April, 2004
![Page 13: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/13.jpg)
Leeds Primary Schools
Design and build of 10 new primary schools and sports facilities
25 year maintenance 60million Euros capital cost Soft Services
Catering Cleaning Grounds maintenance
![Page 14: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/14.jpg)
The Leeds Timetable
March 2003 – OJEC issued
May 2003 – three bidders shortlisted
June 2003 – ITN issued
September 2003 – ITN Bids received
January 2004 – winning bidder announced
March 31, 2004 – contract signature
April 26, 2004 – start of construction
![Page 15: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/15.jpg)
What changed?
![Page 16: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/16.jpg)
What changed?
Legal difficulties addressed
Prioritisation of projects
Approvals process for allocation of funds
Production of standardised contracts
Increased support from Central Government
More sophisticated advisory community
![Page 17: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/17.jpg)
Case Study
![Page 18: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/18.jpg)
Scope of the Project
Design and build of a new school
Maintenance of schools for 25 years
Provision of services for 25 years – Catering
Cleaning
Grounds Maintenance
![Page 19: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/19.jpg)
Some issues to consider
![Page 20: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/20.jpg)
Construction Issues
Title to land
Ground Risk
Planning
Contamination
![Page 21: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/21.jpg)
Operational Issues
How will the Contractor be paid?
What Services should the Contractor provide?
Do any labour unions need to be consulted?
Are there any interfacing issues?
What risks is the Contractor unable to control?
![Page 22: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/22.jpg)
Legal issues
Does the Authority have the powers to enter into the PPP Contract?
Employment issues
Property issues
![Page 23: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/23.jpg)
Lender Issues
Credit risk of sponsoring Authority
Compensation on termination
Can the contract be transferred to another Government department?
![Page 24: Learning from UK PPP Experience Andrew Fraiser Allen & Overy 24 March 2004.](https://reader035.fdocuments.us/reader035/viewer/2022062300/56649e6a5503460f94b67a7b/html5/thumbnails/24.jpg)
Risk MatrixPublic Private Shared
Change in Law
Design Strikes
Useage