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PRIMERPUBLIC-PRIVATE
PARTNERSHIPS
About Me
• Executive Vice-President, USA Lead
(LA, Seattle, KC)
• 8 Years & $9bn direct P3 experience
• $2bn P3 Projects u...
About WTP
We are an independent advisory group founded in 1949
We do not directly procure, invest or build P3 projects,
bu...
$USD (BILLIONS)
Public Private Partnerships (“P3”)
Public Private Partnerships (“P3”)
Municipal
Gov
State GovFederal Gov
Public Funded
Entities
Developers
Institutional
Inve...
Partnership Scope
D B F O M
Design-Build Finance
D B F
You pay when the job is finished.
Developer walks away.
Design-Build Finance Maintain
D B F M
The Developer finances the design and build phase.
They then provide maintenance of ...
Design-Build Finance Operate Maintain
The Developer finances the design and build phase.
They then provide maintenance of ...
How the Public pays
Direct In-direct
Availability Revenue /
Payment “User Pays”
Total cost of the DBFOM annuitized Surrend...
Private sector returns
Availability Revenue
Payment
• Development Fee
• Commercial Revenues
(associated development)
• Ref...
Foundational Premise
• The premise of innovation is foundational to the value of
Public-Private Partnerships.
• Innovation...
One Size Fits All
• To be successful, the P3 needs to
be tailored, not off-the-rack.
• Each public body and institution
ha...
Preparation is key
•Without a robust and
structured process,
embarking on a P3 is like
gassing up the car, starting
to dri...
Process, Process, Process
• P3 procurements are expensive for both the public and
private sector.
• Embarking upon such a ...
Success Factors
INITIATION
DEFINITION
TRANSACTION
IMPLEMENTATION
CLOSE-OUT
Clear Mission
Guiding Project
Principles
HONEST...
If yougetit right,
theresults canbestunning.
If yougetit right,
theresults canbestunning.
If yougetit right,
theresults canbestunning.
If yougetit right,
theresults canbestunning.
If yougetit right,
theresults canbestunning.
• Highways, Roads, Transit (BRT) & Tunnels
• Transit Oriented Developments (TODs)
• Light Rail (LRT), Rail, rolling stock ...
It’s time for some
myth-busting
1. Public Private
Partnerships are
privatization.
1. Public Private
Partnerships are
privatization.
[PLAUSIBLE]
2. Public Private
Partnerships are
always off-balance
sheet.
2. Public Private
Partnerships are
always off-balance
sheet.
[BUSTED]
3. Government
could do it
cheaper.
3. Government
could do it
cheaper.
[BUSTED]
4. P3s are only
suitable for large
projects
(say over $200m)
4. P3s are only
suitable for large
projects
(say over $200m)
[BUSTED]
Market Overview
Sector Split (USA)
SOURCE: INFRAMATION NEWS
Activity Trend
SOURCE:INFRAMATIONNEWS
Further Reading
www.wtpartnership.com/p3
www.wtpartnership.com/p3roadmap
Contact
adam.shaw@wtpnorthamerica.com
Twitter @wt...
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P3 Primer - Adam Shaw, WT Partnership

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What are P3s? How are they best positioned? How can the P3 methodology be used? Mythbusting some common misconceptions. www.wtpartnership.com/p3

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P3 Primer - Adam Shaw, WT Partnership

  1. 1. PRIMERPUBLIC-PRIVATE PARTNERSHIPS
  2. 2. About Me • Executive Vice-President, USA Lead (LA, Seattle, KC) • 8 Years & $9bn direct P3 experience • $2bn P3 Projects under direct management today • Live in Topanga, California with wife Anita, sons Angus & Freddie and Stanley (Great Dane)
  3. 3. About WTP We are an independent advisory group founded in 1949 We do not directly procure, invest or build P3 projects, but we support those who do. Our expertise is as ‘technical translators’ to help clients structure their project in conjunction with legal and financial advisors. We are social infrastructure P3 experts, with over 15 years and $50 billion dollars of experience. InfraDeals press ranked WT Partnership as the #1 P3 Technical Advisor from 1999 to 2017 (Oceania).
  4. 4. $USD (BILLIONS)
  5. 5. Public Private Partnerships (“P3”)
  6. 6. Public Private Partnerships (“P3”) Municipal Gov State GovFederal Gov Public Funded Entities Developers Institutional Investors Consortia An Agreement Between the Parties Preceded by a ‘Transaction’
  7. 7. Partnership Scope D B F O M
  8. 8. Design-Build Finance D B F You pay when the job is finished. Developer walks away.
  9. 9. Design-Build Finance Maintain D B F M The Developer finances the design and build phase. They then provide maintenance of physical plant/building components for the Term of the contract (up to 45 years). They do not provide day to day operational support.
  10. 10. Design-Build Finance Operate Maintain The Developer finances the design and build phase. They then provide maintenance of physical plant/building components for the Term of the contract (up to 45 years). They also provide day to day operational support such as cleaning, catering, concierge and a variety of other services as required. D B F O M
  11. 11. How the Public pays Direct In-direct Availability Revenue / Payment “User Pays” Total cost of the DBFOM annuitized Surrendering all (or part) of an into fixed payments over the Term income stream to pay down the of the Contract. cost of the development.
  12. 12. Private sector returns Availability Revenue Payment • Development Fee • Commercial Revenues (associated development) • Refinancing Gains • Secondary Market • Ticket/Toll/Charge Mark-up • Refinancing • Secondary Market
  13. 13. Foundational Premise • The premise of innovation is foundational to the value of Public-Private Partnerships. • Innovation is directly constrained by the level of prescription. • The public sector must focus on OBJECTIVES and OUTCOMES. • Set the OBJECTIVE, let the private sector RESPOND and they will INNOVATE.
  14. 14. One Size Fits All • To be successful, the P3 needs to be tailored, not off-the-rack. • Each public body and institution has specific needs. • Think ‘calibration’ when it comes to defining the terms of the project. Almost all aspects of the deal may affect another, so be purposeful in what levers you pull.
  15. 15. Preparation is key •Without a robust and structured process, embarking on a P3 is like gassing up the car, starting to drive and not knowing where you’ll end up.
  16. 16. Process, Process, Process • P3 procurements are expensive for both the public and private sector. • Embarking upon such a process must be done with due consideration of all factors. • The process must be defensible to the general public and the private market. • Failure to adopt an appropriate methodology runs the risk of a failed procurement, or worst still – a failed project.
  17. 17. Success Factors INITIATION DEFINITION TRANSACTION IMPLEMENTATION CLOSE-OUT Clear Mission Guiding Project Principles HONEST Expert Advice through every phase Senior Concept Champion Engagement & communications Realistic Expectations Resilience to Change Success will not be measured by cost, schedule or completion of the contract documents. In order to position a P3 for success, there must be a continued focus on the Guiding Principles of ‘why change?’, ‘what are we trying to achieve?’, ‘what will the future state look like for our [mission]?’ This can only be achieved through leadership, consistency and continued reference to why the approach is being taken throughout the cadence of the development cycle.
  18. 18. If yougetit right, theresults canbestunning.
  19. 19. If yougetit right, theresults canbestunning.
  20. 20. If yougetit right, theresults canbestunning.
  21. 21. If yougetit right, theresults canbestunning.
  22. 22. If yougetit right, theresults canbestunning.
  23. 23. • Highways, Roads, Transit (BRT) & Tunnels • Transit Oriented Developments (TODs) • Light Rail (LRT), Rail, rolling stock and infrastructure • Airports, Aviation Infrastructure • Affordable Housing • Mixed Use Higher Education • Sports Stadia • Convention and Entertainment Centers • Hospitals and primary health care facilities • Research facilities • Mission Critical Infrastructure (Defense / IT / Border Control) • Public Safety (Jails, Prisons, Courthouses, Police Stations) • Public Assembly / Civic Assets • Utility Infrastructure (WWTP, desalination, waste to energy, street lighting)
  24. 24. It’s time for some myth-busting
  25. 25. 1. Public Private Partnerships are privatization.
  26. 26. 1. Public Private Partnerships are privatization. [PLAUSIBLE]
  27. 27. 2. Public Private Partnerships are always off-balance sheet.
  28. 28. 2. Public Private Partnerships are always off-balance sheet. [BUSTED]
  29. 29. 3. Government could do it cheaper.
  30. 30. 3. Government could do it cheaper. [BUSTED]
  31. 31. 4. P3s are only suitable for large projects (say over $200m)
  32. 32. 4. P3s are only suitable for large projects (say over $200m) [BUSTED]
  33. 33. Market Overview
  34. 34. Sector Split (USA) SOURCE: INFRAMATION NEWS
  35. 35. Activity Trend SOURCE:INFRAMATIONNEWS
  36. 36. Further Reading www.wtpartnership.com/p3 www.wtpartnership.com/p3roadmap Contact adam.shaw@wtpnorthamerica.com Twitter @wtpnorthamerica

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