Project+Management+UG

E providing a certain level of service the product

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Unformatted text preview: es the lowest There qualified supplier wins the contract Forms of Privatization: Forms Alternative Service Delivery Alternative Denationalization Denationalization Public-Private Partnership Public Denationalization: Denationalization: Government Sells its Assets to Private Sector: Sell Assets/Firms to Private Individuals Sell Sell Assets/Firms to Private Companies Sell Sell Assets/Firms to Management and Employees Sell Sell Assets/Firms to the Public with Equity Issue Sell Public-Private Partnerships: Public Sharing the Risks and Responsibilities of a Project Sharing Degree of Risk and Responsibilities Taken by Each Degree Party Determines the Type of Partnership Nature of Risk: Nature Construction Risk: Normally Taken by Private Sector Construction Operational Risk: Public Sector, Transferable to Private Operational Sector Conditionally Government’s Role: Government Shift from Production to Regulation Shift Effective Contract, Monitor Performance, Enforce Effective Contract Standards Payment Based on Outcome or Goals Rather than on Payment Inputs and Costs Example: Weapon Procurement A Typology of Goods Typology Exclusion Possible Joint Toll Goods Consumption Individual Private Goods Not Possible Collective Goods CommonPool Goods Service Delivery Alternatives Service Service Delivery Arranges Service Supplier Pays Supplier Gov Production Gov Gov N/A Contracting Gov Private Gov Franchise Gov Private Consumer Grant or Subsidy Gov & Consumer Private Gov & Consumer Voucher Consumer Private Gov & Consumer Market Consumer Private Consumer Effectiveness of Service Delivery Methods Effectiveness Nature of Industry Gov Supply Contract Franchise Grant of Subsidy Voucher Market Service Quality/ Quantity not Easily Specified Most Least Least Somewhat Somewhat Somewhat Competition Among Producers Least Most Least Somewhat Most Most Economies of Scale Somewhat Most Most Somewhat Somewhat Somewhat Consumer Comparison Shopping Least Least Least Somewhat Most Most Somewhat Some-what Most Somewhat Least Somewhat Few Producers Privatization Goals and Service Delivery Methods Privatization Goals Gov. Supply Contract Franchise Grant or Subsidy Voucher Market Reduce Gov Costs No Yes Yes Maybe Maybe Greatly Reduce Consumer Costs No Maybe Maybe Yes Yes Yes Increase Consumer Choice No No No Maybe Yes Yes Increase Competition No Maybe No Maybe Yes Yes Improve Quality No Maybe Maybe Maybe Yes Yes Limit Size of Gov No Somewhat Somewhat Somewhat Somewhat Greatly Distribution goals Yes No No Yes Yes No Other Policy Goals Yes No No Somewhat Yes No Direct Contact Between Consumers and Suppliers No No Yes Yes Yes Yes Decrease Potential for Service Disruption No Yes Yes Maybe Maybe Maybe Delivery Systems and Government Costs Delivery Type of Good Toll Arrangement Govt. Service Contract 5 Franchise CommonPool Collective 4 Private 2 3 1 2 Grant 2 3 1 Voucher 2 3 1 Market 1 1 Framework for Facilitating Private Framework Participation: Response in Four Complementary Areas Response Conducive Policy, Legal and Regulatory Framework Unbundling mitigation and management of risks Government Decision-Making & Project Facilitation Capital Markets Development and Term Financing Funding Structure of BOT Projects Funding Equity Funding Equity Loan (Limited Recourse Finance) Loan Credit Facilities Credit Eventual Flotation of Shares Eventual Legal Framework of BOT Projects Legal Enabling Legislation Usually Stipulates Enabling Franchise (rights to design, finance, construct & operate) Franchise Concession period Concession Capital Structure Capital Directorship Directorship Royalty to Government Royalty Completion Period Completion Approval of design, method of construction & conditions of Approval contract Power to make by-laws for traffic regulation Power Power to collect tolls Power Level of tolls/mechanisms for adjustment Level Risks of BOT Projects Risks Sponsor Risks Sponsor Sovereign Risks Sovereign Political Risks Political Technical Risks Technical Income Risks Income A Typical Build-Operate-Transfer Structure Construction Company After Agreed Period Equity Dividends Contract Interests Design & Build Promoter = Concession Company Equity Lenders Hand Over Loans Concession To Operate Franchise Government Other Investors Lenders Credit Agreements Independent Checking Engineer Consultants Agreements Engineer Lenders Consultants Agreements MTRC Rail Operating Agreements EHCC Rail Franchising Assignments Credit Agreements Road Operating Agreements NHKTC H.K. Gov’t Road & Rail Franchises Design & Contract Agreements Shareholders Agreements Shareholders Agreements Shareholders Project Management Company Shareholders Main Contractor Design Agreements Design Engineers Construction Agreements Named Contractor Independent Checking Engineer Consultants Agreements Lenders Engineer Consultants Agreements Tunnel Operation & Management Organization Operation Function Credit Agreements Tate’s Cairn Tunnel Company Tunnel Franchise H.K. Gov’t Design & Contract Agreements Shareholders Agreements Shareholders Project Management Team Main Contractor (A joint venture Co.) Design Agreements Designers Sub Contracts Subcontractors Relationship of parties to the Tate’s Cairn Tunnel, Hong Kong Example: Example: Specific Case of Highway Specific Privatization Privatization Cost of Bad Roads in Vehicle Wear and Tear Cost Pavement C...
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