Week 6

Question 1

What is a Public Private Partnership?

Answer 1

Question 2

Definition of a PPP for the course

Answer 2

Question 3

Conventional procurement vs. PPP

Answer 3

Question 4

Some features that are unique to PPPs

Answer 4

Question 5

Key Parties in a typical PPP

Answer 5

• Public sector
• Project company (SPV)
• Financiers

Question 6

Public sector (Key Parties in a typical PPP)

Answer 6

A PPP project will be promoted by a central government department, a local government body or another type of public sector body or agency. The public sector entity is responsible for drawing up the terms of the tender (including for example output specifications), selecting bidders and finally awarding the PPP contract to the successful private sector bidder.

Question 7

Project company (SPV) (Key Parties in a typical PPP)

Answer 7

• The private sector will participate in PPP projects by forming a consortium that will usually establish an SPV (the “project company”) to undertake the project.
• The respective rights and obligations of these sponsors as shareholders of the project company will be set out in a shareholders’ agreement.
• The sponsors provide equity funding (either as equity or as subordinated debt) and their shareholdings will be in proportion to their participation in the deal.

Question 8

Common challenges of a PPP

Answer 8

Question 9

The Public Accounting of PPP - key principle

Answer 9

deconsolidation for the public sector of the PPP debt is possible only if there is a substantial transfer of the project risks to the private sector, which is evaluated by Eurostat on the basis of a thorough analysis of the PPP agreement