1. Public Private Partnerships Lessons Learned John Davie Chairman, Altra Capital April 2017

2. The public – private continuum
…and
ignore all this
nonsense
Public
Private 
Public Private
Partnerships (PPP)
Private Finance Initiative (PFI)
Private
Concessionaire
(Operator)
Operator
Engineer
Concession
Build-Own-Transfer (BOT)
Contractor
Design-Build-Finance-Operate
Public or Private
Ownership
Affermage
Build-Transfer-Operate (BTO) 
Direct works department
Traditional
Public Sector
Procurement
Traditional tender
Design-build
Public Owner/
Operator/
Financier
Operator
Contractor
Engineer
Privatisation / Divestiture
Asset Capitalisation
Operator
Contractor
Engineer
Private Sector
Procurement
Build-Own-Operate 
Private Owner
Lets not forget that the private sector will only seek involvement in new infrastructure schemes if it is convinced that it will make a profit. There is nothing wrong with profit; it provides the motive to be successful and herein lies the importance of incentivising all partners.
We are looking at long-term contracts with PPP

3. investor’s perspective
…and
concentrate on preparing a robust and accurate business case
…that considers the project from the
investor’s perspective

4. Eight common problems
Lack of a clear link between the project and the organisation’s key strategic priorities, including agreed measures of success
Lack of clear senior political and management ownership and leadership
Lack of effective engagement with stakeholders
Lack of skills and proven approach to project management and risk management
Too little attention to dividing development and implementation into manageable steps
Evaluation of proposals driven by initial price rather than long-term value for money (especially securing delivery of business benefits)
Lack of understanding of, and contact with, the supply industry at senior levels
Lack of effective project team integration between clients, the supplier team and the supply chain

5. Some important overall issues
the need to take time in the early stages to establish the right management capabilities, the right project and the right framework – it is very difficult to fix these in the later stages
early contact between the public and private sectors to enable an understanding of relevant issues is very helpful 
both the public and private sectors need to perform effectively to achieve success
the public sector needs to adapt to a fundamentally different role - becoming a commissioner, sponsor and contract manager rather than a provider of services
the private sector needs to adopt a contracting approach suitable for a sustainable long term partnership
robust programme and project governance at an early stage, looking beyond immediate needs, makes the process smoother and quicker

6. Where is the finance?
Today the problem is that of matching the supply of finance from the private sector with investable projects
The main forms of financing infrastructure remain:
government funding
traditional procurement
design-build-operate
corporate finance or on-balance sheet finance
corporate financing – which would involve getting finance for the project based on the balance sheet of the private operator
the mechanism used in lower value project
project finance
“limited recourse” or “non-recourse” financing
in general, ‘funding’ applies when an organisation fills the need for cash from its own internal reserves.. …. the term 'financing' is used when the need is filled from external or borrowed money

7. PPP - conclusions
Building the right capabilities, management and culture
Choosing the right technical solution
Ensuring the project is affordable and value for money
Agreeing the right programme/project governance framework
Agreeing a sensible commercial structure
Developing sound, predictable legal, institutional and regulatory frameworks
Abiding by Saudi and Shari’a Law
Taking social/environmental factors into account

9. Thank You www.altracapital.com johndavie@altracapital.com