Ppp project life cycle
-
Upload
audrey-mwala -
Category
Presentations & Public Speaking
-
view
551 -
download
1
Transcript of Ppp project life cycle
1
Kick Starting a PPP project
Presentation by :
Mrs. Audrey Mwala
Director of Project Finance & Risk Analysis
The Public Private Partnership Commission,Malawi
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
2
Session 3- Outline•PPP Project life Cycle:
•Egypt•Mauritius•Kenya
•Knowledge, skill, attitudes for PPP delivery•The readiness of state institutions•Reorienting the public sector•Working with the private sector•Initiation and planning of PPP programme•Importance of legal, Institutional, financial, fiducially framework for capacity building•Project Finance and financial Modeling•Risk Management
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
3
What it is a PPP project Life Cycle
• Logical sequence of activities to achieve project’s objectives. • All projects go through a series of stages. • Lifecycles differ across:
– countries, – sectors and – by the chosen implementation method
• A life cycle is used to: – Control progress through a project; – Provides review points– Project’s likelihood of success is validated – Decision to move to the next phase made.
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
4
Key Life Cycle Stages
1. Project Identification
1.1 Project selection and definition
Identification Output specifications
1.2 Assessment of the PPP option
Affordability Risk allocation Bankability Value for money
2. Detailed Preparation
2.1 Getting organised
Project team Advisory team Plan and timetable
2.2 Before launching the tender
Further studies Detailed PPP design Procurement method Bid evaluation criteria Draft PPP contract
3. Procurement
3.1 Bidding process
Notice and prequalification
Invitation to tender Interaction with bidders Contract award
3.2 PPP contract and financial close
Final PPP contract Financing agreements Financial close
4. Project Implementation
4.1 Contract management
Management responsibilities
Monitoring service outputs
Changes to the PPP contract
Dispute resolution PPP contract
termination 4.2 Ex post evaluation
4.2 Ex post evaluation Institutional framework Analytical framework
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
5
Mauritius
• PPP Act of November 2004.• Amended in June 2008 to:
– provided set up of a PPP Committee and – provided for unsolicited bids
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
6
Key Institutions/ Parties• Contracting Authority-
– Identify, appraise, develop and monitor a projects
– Carry out feasibility studies– Submit results to the PPP Committee– Prepares RFP on the approval of the
study
• Central Procurement Board– Examine and evaluate bids– Recommend to CA to negotiate with
preferred bidder– Approve the award of the project
A PPP Unit •Set up in July 2002 •Drafted the legislation•Produced PPP guidelines Manual•Reports to the PPP Committee•Works with CAs to select PPP projects•Deals with matters referred by PPP Committee•Source of PPP information•Develop PPP awareness.
PPP Committee•Assessments projects, recommends to CA•Develop PPP best practice guidelines•Formulate PPP policy in relation
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
7
PPP Cycle – Govt. initiated PPPs
Feasibility Study- • To assess if a project may be implemented under PPP.• The feasibility study must demonstrate:• comparative advantage for implementation under a PPP
– Affordability, VFM, Risk transfer• Show contracting authority’s capacity to effectively:
– enforce agreement, Monitor implementation and performance • The extent to which functions can lawfully and effectively be
performed by a private party • The most appropriate form of PPP
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
8
Procurement
Pre-selection• The CA obtains approval of CPB conduct pre-selection.• The pre-selection documents are approved by CPB.Request for Proposal• The CA submits the RFP to the CPB for approval.Evaluation and award of bids• The CPB is responsible for the evaluation of bids -but
may set up an evaluation committee.• The award of the contract is approved by the CPB.
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
9
Procurement unsolicited Proposal
• Private party submits project concept & feasibility study cost to CA.
• CA examines project in line with sector strategies & investment programme and if its suitable for PPP.
• CA submits it to the PPP Committee within 15 days. • The PPP Committee may approve or reject the project concept. • If the CA within 5 working days requests the proponent to
submit:– details of technical, commercial, managerial and financial
capabilities;– a feasibility study– the nature of information which is proprietary.
• No price proposal at this stage.
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
10
Unsolicited bid’s Cont1’• The PPP Committee assesses the feasibility study and evaluates the
technical proposal. – (a) If its accepted, the PPP Committee requests CA to proceed with an
Invitation to bid. – (b) If its rejected, the process ends. No compensation for feasibility study
costs.• CA prepares RFP based on information in the technical proposal. • The RFP is approved by the CPB before bids are invited.• The proponent is requested to submit only a financial proposal. • The other bidders submit both technical and financial proposals.
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
11
Unsolicited bid’s Cont2’
• The RFP indicates that: • (a)the project has emanated from a proponent whose
technical proposal was accepted• (b)the proponent will be awarded the project if their price
is within 10 % of the price of the preferred bidder; and• (c) If the original proponent is not successful, the CA will
compensate the cost of the feasibility study which will be claimed from the successful bidder.
• The CPB evaluates the bids gives and approval of the successful bidder.
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
12
Egypt
• PPP Law (Law 67/2010), Partnership with Private Sector for Infrastructure Projects & Public Utilities
• Regulations 2011• Policy
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
13
Key Institutions• Line Ministry
– (CA)- identifies projects• Minister of Finance• Satellite Units in Line Ministries
(Nodal Agencies)A PPP Central Unit•Promote the national PPP initiative• Facilitate solutions to legal and institutional obstacles for PPPs•Develop PPP best practices, models•Validate and develop PPP proposals •Shepherd pilot procurements of PPPs •Build capacity in the Public sector•Assist in selection of advisors, Investors
PPP Supreme Committee•Approve projects•Appoints advisors •Prepare Contract Award Requirements
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
14
The Cycle
– Line Ministry Submits Project Proposal to
– PPP Central Unit for Screening/ modification
– PPP Central Unit submits to
– PPP Ministerial Committee for Approval
Project Pre
paration
Approval by Supre
me Com
mittee
Tendering
Implementa
tion& Post Contra
ct Monitoring
Project initiation
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
15
Competitive Dialogue
– with the qualified bidders
– with each bidder separately
– to obtain explanations for the contents of the technical and financial elements
– basis of equality amongst the qualified Investors
Challenge of disqualification•Disqualified Investors can object to the Prequalification Committee’s decision.•An objection shall besubmitted to the PPP Central Unit to study and issue its binding decision.
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
16
Approval of draft contracts
– Line Ministry has the right to :• approve third part
contracts to be entered by the Project company for the delivery of the project works & services
• Object such appointments
Challenge of disqualification•Disqualified Investors can object to the Prequalification Committee’s decision.•An objection shall besubmitted to the PPP Central Unit to study and issue its binding decision.
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
17
Kenya“A center of
PPP Expertise”
• PPP Policy November 2011• PPP Act 2012• A Project Facilitation Fund to provide an avenue for
government support to PPP projects.
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
18
Project Implementation Structures
• PPP Nodes– responsible for the development
and management of PPP projects; • The PPP Unit
– domiciled at the State Department responsible for Finance,
– a national centre for PPP expertise; – develop and distribute PPP
Operating Guidelines and Manuals
• PPP Committee -responsible for developing and implementing PPP policy initiatives;
• Cabinet-Final approval but delegate to PPP Committee
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
19
The Cycle• Project Identification, Selection and Prioritization
technical profile, operations, service delivery targets, and future income and costs (Scooping)
• Project Preparation and Appraisal: a full investment appraisal
• Project Tendering• Project Negotiation• Project Monitoring and evaluation- The CA to establish
clear procedures for monitoring. The PPP Unit and the PPP Committee has an oversight role
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
20
Competitive dialogue
• A contracting authority may, hold a competitive dialogue with each bidder to define technical or financial aspects of the project
• may require a bidder to submit to the authority a technical and financial non-binding proposal for discussion
• held with each bidder on the basis of equality and transparency.
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
21
Privately Initiated Investment Proposals
• Limited to projects that demonstrate:– genuine innovation and/or – use of proprietary technology, – economic viability and – satisfy the principles of public interest
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
22
Privately Initiated Investment Proposals
• A contracting authority, before negotiations:– prescribes a criteria against which the outcome of
negotiations shall be evaluated; – submits the proposal to the PPP unit for consideration
and recommendation – apply for approval from the Committee to negotiate the
contract – conduct the negotiations and award the tender
• Key issues: VFM, Affordability, Risk transfer
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
23
Knowledge skills & Altitudes for PPP project delivery
• Project Development skills- – Privately financed infrastructure project structuring skills– Go to Market with a Solid Transaction Structure
• Economic and financial appraisal skills– Evaluating traditional vs. PPP
• Communication skills: with general public• Procurement/ evaluation
– Sensitivity to the objectives, political environment, public• Technical skills- understand the technical details
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
24
Knowledge skills & Altitudes for PPP project delivery
• Negotiations -to finalise agreements• Contract management skills
– Reporting- on matter of general policy and projects – Dispute resolution
• PPP transaction/ process management skills – Approvals, what stages, whom.
• Monitoring -Implementation and compliance• Legal & regulatory skills• Experience in dealing with the private sector • Market sounding: check with lenders to understand
their perspectives of their own market challenges
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
25
Monitoring skill…• Monitor, transparency and accountability of PPP
unit work / State Authority / PPP partner– Audit of PPP procurement processes– Audit of PPP project performance – independent
reviews, Director of Audit• Effectiveness / performance audit
– to see if projections regarding PPP procurement against traditional procurement were realised
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
26
The state of readiness of state Institutions
• Establish PPP policy and Legal frame work– Need for clear mandate for state institutions– Draft PPP contract
• Strong National Political Backing – Clear Public Sector Commitment
• A realist pipeline of bankable projects – Sound understanding of the needs of a particular sector– be Bankable for Private Sector financing i.e. large, attractive size
• Establish clear ownership ( risks resistance by CAs)• Adequate capacity for the PPP unit and the Nodal agencies
– To carry out rigorous project feasibility– Risk-allocation structure must be clear
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
27
The state of readiness of state Institutions
• Access to local and international financing institutions• Affordability by Govt.
– Creditworthiness to make unitary payments • Project development fund ( revolving fund)• Viability Gap fund• Communication with stakeholders• Professional and effective monitoring of the private
party • Proper advisory support
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
28
Reorienting the Public sector• Capacity Building, PPP training• Targeted seminars• Role of advisors• Political will• Political Champion• Public awareness• Low hanging fruits
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
29
Working with the private sector• Project preparation- project scooping• Procurement
– Technical specifications– VFM– evaluation
• Negotiation • Implementation/ construction phase
– Reporting– Technical issues/ standards- Payments
- Post implementation monitoring• Contract Compliance
– Legal• Streamline process - speed
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
30
PPP Programme initiation and Planning
• Legal framework (Law and Policy)• PPP guidelines• Institutional framework• PPP sector nodes• Personnel Capacity;• PPP expertise, legal, finance, economic, ‘sector specialists”• PPP advisors• Institutional roles & approvals• Financial resources for:
– administration, – project development & – monitoring
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
31
PPP Project preparation• Project pipeline Selection
– Potential candidates for further analyze– Not too small, clear private sector interest – conceptual stage – limited information– Project Desirability (public interest)
• APPRAISAL -structured, prepared, Ranking & Concept Paper– Project Achievability/ deliverable output– Project Ability (Policy and Program): Is the it a priority– Project Viability (Financing)– investment size and useful life– Sequencing- low hanging fruits first
• APPROVAL – final approval to proceed to implementation i.e. Developing a Business Case
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
32
PPP unit• Many countries with a successful
PPP programme have created a dedicated PPP unit.
• Roles of PPP Units include:– Regulating the PPP process– Promoting PPPs within Govt.– Helping agencies to implement PPPs– Providing channels to investors– Help in monitoring
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
33
Business case Development
• Assess if the project:• Meets government’s policy sector objectives• Is ‘feasible’: technically, financially, economically,
environmentally, • Is ‘deliverable’- output standards; • Is ‘affordable’ to the public authority • Is ‘bankable’ to the private investors & lenders• Management & Contract enforcement capability.
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
34
Plan
• for:• Procurement• Implementation• Post construction • Contract expiration
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
35
Success factors• Stable macro economic environment• Willingness of the Public Client to accept innovative solutions • A detailed contract• Professional and effective monitoring of the private contractor• Selection of appropriate project candidates • Good detailed preparation:
– Clear business cases, – clear output specifications, – A PPP project procurement team
• Proper advisory support• A well structured, transparent, competitive PPP procurement process. • A clear and consistent methodology for evaluating FVM• Proper monitoring of the entire operational phase. • A determination by all parties and stakeholders to make the PPP work• Management of contingent liabilities
05/03/2023 Presented by: Mrs Audrey Mwala, Director Project Finance and Risk Analysis, The PPPC, Malawi
36
Importance of legal, institution; fiduciary, financial framework in
Capacity building• legal
– Sets Objectives to build capacity– Sets Institutions for targeted capacity
building– Gives legal mandate of the institutions– Gives investors confidence to predict the
process– transparent, and competitive procurement
• Institution – Allows for building of a team of
professionals – Capacity building to include the private
sector to understand PPP framework before they invest.
•Fiduciary• Reporting provides accountability
excellence• Approvals provide national will• Audits provide confidence and due
respect of the process•Financial
• Allows capacity building to happen• Public awareness programmes• Allows project preparation• Allows PPP payment & investment