1. How To Attract Bidders Presented By Sandy Bremner 24 th March 2005 Bremner Management Services Limited

2. TODAY’S PRESENTATION Sandy Bremner’s background and experience The PPP market The private sector’s perception Who are the bidders and what do they want? How to attract bidders

3. COMPETING MARKETS IN THE UK England, Northern Ireland and Wales –Courts –Defence –Education –Health PFI LIFT –Housing –Prisons –Roads –Waste Scotland –Education –Health –Prisons –Roads –Waste Signed Projects (586) - £40,161 millionSigned Projects (85) - £2,441 million

4. SCOTTISH SCHOOLS PORTFOLIO Capital Value - £2,872 million The Market

5. SCOTTISH SCHOOLS’ MARKET Comhairle nan Eilean Siar Schools Falkirk Schools PPP2 Scottish Borders Schools Inverclyde Schools Moray Schools (A) Aberdeen City Schools (A) East Dunbartonshire Schools (A) West Dunbartonshire Schools £48 m £70 m £50 m £80 m £50 m £80 m £100 m £578 m

6. PRIVATE SECTOR’S PERCEPTION Confusion Disappointment False promises Lack of urgency Lack of confidence Poor and inaccurate communication Poor business practice

7. PROCUREMENT TIMINGS WEEKSSAMPLE SIZE AVERAGEMAXIMUMMINIMUM OJEC to ITN12253914 ITN to Preferred Bidder 12346513 Preferred Bidder to Financial Close 12396121 OJEC to Financial Close 129712270 ITN to Financial Close 127310252

8. PPP MARKET PARTICIPANTS Project Sponsors –Construction companies –Facilities managers –Advisory consortia Equity Funds Funders Advisors

9. THE PRIVATE SECTOR DRIVERS Budgets bettered. Certainty. Planned financial returns achieved or bettered. Quality repeat business. Reputation enhanced. Risks mitigated and managed.

10. RISK MANAGEMENT ELIMINATE or AVOID ACCEPT TRANSFER REDUCE

11. HOW TO ATTRACT BIDDERS Commitment Command Communication Confidence Content Culture

12. PROJECT STRUCTURE Quality Components –Confidence –Location –Political Support –Right Mix –Focused Business Plan –Affordable –Process Driven

13. PROJECT SCOPE Realistic –Do-able –Deliverable –Uncomplicated –Few issues Don’t be excessive Be prepared Affordable –Know the benchmark economics Funding Capital cost Facilities Management Life Cycle Management and administration –Know the interrelationships –Budget from top down –Demographics to be satisfied

14. THE MIX New build 75 : 25 - New build / refurbish 50 : 50 - New build / refurbish 25 : 75 - New build / refurbish Refurbish Attractive Unattractive

15. AUTHORITY’S PROJECT TEAM Dedicated team –Well led –Delegated authority –Commercialism –PFI experts –Experience Experienced external advisers –Procurement –Operational Project knowledge –Know what you want –Be realistic –Stretching to create “Best Value” –Continually analyse the market

16. PROCUREMENT CONUNDRUM Clearly describe the procurement process and its various stages. Keep it simple. Stick to the rules. Use published guidance. Categorically state the evaluation methodology. Demonstrate that you know and can manage the process from all angles: –European –UK Government –Scottish Executive –Partnerships UK –Local Authority

17. OPTIMAL PROCUREMENT PERIODS WEEKSSAMPLE SIZE AVERAGEMAXIMUMMINIMUM OJEC to ITN12253914 ITN to Preferred Bidder 12346513 Preferred Bidder to Financial Close 12396121 OJEC to Financial Close 129712270 ITN to Financial Close 127310252

18. THE SOLUTION Don’t do this Do this Communicate

19. A VERITABLE TALE “Never in all history have we harnessed such formidable technology. Every scientific advancement known to man has been incorporated into its design. The operational controls are sound and foolproof.” …………….E.J. Smith (Captain of the Titanic)

20. Bremner Management Services Limited Contact Details Sandy Bremner T – 01383 861504 M – 07906 856035 E – sandy.bremner@bremner.uk.net

21. abcdefghij Financial Partnerships Unit Local Authority Training Seminar