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1
FINANCIAL MODELLING
AND THE BID PROCESS
STEPS TO MAKING BETTER
DECISIONS WITH MORE CONFIDENCE
2
CORALITY / INFRASTRUCTURE MODELLING
3-4 June 201414th Annual National PPP Summit
3
CASE STUDY: CHILE
LA SERENA-VALLENAR TOLLROAD
"THE ENTIRE MODEL WAS PREPARED
BY THE JUNIOR ASSOCIATE AND
NEVER CHECKED B...
4
WOULD YOU BET >$1 BILLION THIS
IS RIGHT?
=-
IF(DEBT.BOND1.FLAG=1, J$434*IF(AND(J$434=1,K$434=0),
I924+SUM(J920:J922), IF...
5
GLOBAL CHALLENGE
• RUSHED PROCESSES
• EXTREMELY COMPLEX ASSETS
• MAJOR INVESTMENTS
• INEXPERIENCED MODELLERS
3-4 June 20...
6
CAN YOU TRUST THE
FINANCIAL MODEL?
• ~2,000 – 6,000 FORMULAE
• 100-300 “FINDINGS”
• 4-6 ITERATIONS
• MOVING TARGET –
FUN...
7
IS THE MODEL FINISHED YET?
3-4 June 201414th Annual National PPP Summit
8
TEAM STRUCTURE
• LEAD COMMERCIAL MODELLER
• LEAD TECHNICAL MODELLER
• SUPPORTING ANALYST
REF: SOCCER WORLD CUP
3-4 June ...
9
DIFFERENT CHALLENGES AT EVERY STAGE
3-4 June 201414th Annual National PPP Summit
2013 2014 2015 2016 2017 2018 2019 2020...
10
GETTING BUY-IN THROUGH TRANSPARENCY
3-4 June 201414th Annual National PPP Summit
11
BUILDING A FRAMEWORK FOR ANALYSIS
12
SUCCESS FACTORS
• MODELLING IS A TEAM
SPORT: COMMERCIAL AND
TECHNICAL
• UNDERSTAND MODEL
LIMITATIONS AT EVERY
STAGE
• S...
13
CORALITY FINANCIAL GROUP
Rickard's passion for financial modelling is built on specialist roles in the highly
quantitat...
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Rickard Warnelid - Corality Financial Group - Financial Modelling and The Bid Process – Steps to Making Better Decisions With More Confidence

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Rickard Warnelid delivered the presentation at 2014 National PPP Summit.

The National PPP Summit is the leading annual event for industry stakeholders to gather and discuss the issues across the national and global PPP markets. The 2014 agenda reviewed current and emerging financing models as well as showcasing best practice strategies for the procurement process, risk transfer and whole-of-life project management.

For more information about the event, please visit: http://www.informa.com.au/PPPSummit14

Published in: Business
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Transcript of "Rickard Warnelid - Corality Financial Group - Financial Modelling and The Bid Process – Steps to Making Better Decisions With More Confidence"

  1. 1. 1 FINANCIAL MODELLING AND THE BID PROCESS STEPS TO MAKING BETTER DECISIONS WITH MORE CONFIDENCE
  2. 2. 2 CORALITY / INFRASTRUCTURE MODELLING 3-4 June 201414th Annual National PPP Summit
  3. 3. 3 CASE STUDY: CHILE LA SERENA-VALLENAR TOLLROAD "THE ENTIRE MODEL WAS PREPARED BY THE JUNIOR ASSOCIATE AND NEVER CHECKED BY THE OTHER PEOPLE ON THE TEAM" • LIFE TIME COSTS 27% UNDERSTATED • CONSORTIUM FINED USD 10M • SCOTIA BANK BLAMED BY CONSORTIUM 3-4 June 201414th Annual National PPP Summit
  4. 4. 4 WOULD YOU BET >$1 BILLION THIS IS RIGHT? =- IF(DEBT.BOND1.FLAG=1, J$434*IF(AND(J$434=1,K$434=0), I924+SUM(J920:J922), IF(AND(DEBT.BOND1.TERM*P- (J$11-1)=0),(I924+SUM(J920:J922))/ (DEBT.BOND1.TERM*P- (J$11-1)+1), (I924+SUM(J920:J922))/( VLOOKUP($B919,TABLE.DEPRECIATION,4)*P ))),J$368*IF(AND(J$368=1,K$368=0),I924+SUM(J920:J922),I F( AND((DEBT.BANK1.TERM+DEBT.BANK3.TERM)*P-(J$11- 1) =0),(I924+SUM(J920:J922))/ ((DEBT.BANK1.TERM+DEBT.BANK3.TERM)*P-(J$11- 1)+1),(I924 +SUM(J920:J922))/(VLOOKUP($B919,TABLE.DEPRECIATIO N,4)*P)))) 3-4 June 201414th Annual National PPP Summit
  5. 5. 5 GLOBAL CHALLENGE • RUSHED PROCESSES • EXTREMELY COMPLEX ASSETS • MAJOR INVESTMENTS • INEXPERIENCED MODELLERS 3-4 June 201414th Annual National PPP Summit
  6. 6. 6 CAN YOU TRUST THE FINANCIAL MODEL? • ~2,000 – 6,000 FORMULAE • 100-300 “FINDINGS” • 4-6 ITERATIONS • MOVING TARGET – FUNDING, DEBT, TAX, CAPEX • MODEL AUDIT COMPLETED DAYS/HOURS BEFORE BID 3-4 June 201414th Annual National PPP Summit
  7. 7. 7 IS THE MODEL FINISHED YET? 3-4 June 201414th Annual National PPP Summit
  8. 8. 8 TEAM STRUCTURE • LEAD COMMERCIAL MODELLER • LEAD TECHNICAL MODELLER • SUPPORTING ANALYST REF: SOCCER WORLD CUP 3-4 June 201414th Annual National PPP Summit
  9. 9. 9 DIFFERENT CHALLENGES AT EVERY STAGE 3-4 June 201414th Annual National PPP Summit 2013 2014 2015 2016 2017 2018 2019 2020 Feasibility Construction start Bidding Construction reporting Operations start Reporting
  10. 10. 10 GETTING BUY-IN THROUGH TRANSPARENCY 3-4 June 201414th Annual National PPP Summit
  11. 11. 11 BUILDING A FRAMEWORK FOR ANALYSIS
  12. 12. 12 SUCCESS FACTORS • MODELLING IS A TEAM SPORT: COMMERCIAL AND TECHNICAL • UNDERSTAND MODEL LIMITATIONS AT EVERY STAGE • STAKEHOLDERS REQUIRE TRANSPARENT MODELLING 3-4 June 201414th Annual National PPP Summit
  13. 13. 13 CORALITY FINANCIAL GROUP Rickard's passion for financial modelling is built on specialist roles in the highly quantitative fields of derivatives and project finance, a career path complemented by an academic grounding in engineering physics. Born in Sweden and with global consulting and leadership experience, Rickard is an internationally recognised authority, speaker and thought-leader on the organisational benefits of best practice financial modelling. Rickard Wärnelid | Group CEO P +61 2 9229 7450 E rickard.warnelid@corality.com
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