Bringing the specific efficiencies, discipline, focus and mindset of for-profit businesses to bear on the public and non-profit sectors is an old idea, but one that is gaining momentum with the success and proliferation of public-private partnerships (PPPs) over the last two decades.
Challenges such as poverty, public health and education – long considered purviews of government – have proved stubbornly resistant to government-only solutions. However, collaborative efforts between the public, private and civil sectors to address major societal challenges have delivered progress. Working together, the three sectors are often able to accomplish far more than any can do alone. Indeed, the very mixture of differing approaches and expertise is the added value which these partnerships bring, making them far more than just the sum of their parts.
Through a comprehensive range of services, we assist public authorities and prospective investors during the complete structuring/ bidding process, aligning all elements for long-term, successful partnership for all parties involved.
What we do
Definition of objectives and strategies: As PPPs usually have long durations, an incorrect definition of objectives, targets and models may result in a long-term burden for the public administrations. Through an in-depth analysis of current indicators and benchmarking of alternative models of service provision, we are able to assist public authorities to properly define objectives that are ambitious but achievable, as well as associated strategies to be adopted.
Analysis of economic/ financial viability: Based on objectives and strategies defined, we should perform a detailed evaluation of market fundamentals, in order to estimate required investments and expected cashflows for the concessionaire. These parameters are essential for the definition of specific targets and indicators to be achieved, eventual subsidies to be offered and acceptable pricing ranges for the bidding.
Legal & Engineering alignment: The complete structuring of the process requires the preparation of a set of legal documents, ranging from bidding rules to the contract to be signed. In many cases, it is also necessary to prepare associated engineering projects, in order to refine investment estimates and present indicative designs during the bidding process. Although we do not directly provide the legal and engineering services required, we may help authorities to select the best providers and coordinate their work, in order to assure alignment with objectives/ strategies/ models defined and assure that the services are provided with adequate timing and quality level, increasing probability of auction success
Roadshows & Attraction of investors: In order to assure that the bidding is a success, it is usually necessary to establish a dialogue with potential investors. Through this dialogue, it is possible to assess validity of most relevant assumptions and raise market interest on the underlying business opportunity. We support public authorities to approach the private sector in a manner that is consistent with regulation, assuring information security and neutrality among potential bidders.
Valuation & definition of bidding strategies: In addition to public sector support, we also may support prospective investors to assess the business opportunity at hand. In this range of services, we evaluate the validity of economic/ financial assumptions presented by the public sector, prepare a valuation of the opportunity according to embedded risks and opportunity costs of our clients and support them to define bidding strategies that maximize winning probabilities. We also work with clients to design financing models and resource mobilization strategies to drive the required funding throughout the lifetime of the concession.