Project+Management+UG

Infrastructure the main players these types of their

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Unformatted text preview: t flow management „ Lack of experience in long-term nature of the projects „ Lack of experience with management of PFI’s risks „ The design officers are inexperienced in translating demand for services se into design into Public Sector’s Role „ „ „ Protection of public funds Value for Money (VFM) criterion Ambiguity over risk assumption & risk allocation „ „ Lack of Experience & Expertise in Writing an “Output Specification” or “Service Provision Document” as against an “Asset Provision Document” Provision Lack of Experience with past projects; thus a need for comparison on the basis of “VFM” especially when public funding is being committed. How the public sector comparator (PSC) is used: Project involved public money? NO No comparator required NO No comparator required No VFM test Yes Is public sector main source of revenue? Test for VFM against alternative use of funds Yes Might have gone ahead if publicly funded NO No comparator required Yes NO Is a PSC available? No comparator required Use a PSC Yes Test for VFM through competition and external benchmarks Test for VFM through competition and external benchmarks vs. comparator Public – Private Responsibilities Public „ When the project cannot be financed by the private sector, then the public sector enters in a variety of forms in order to close the the gap between commercial financial analysis and social cost-benefit gap analysis. analysis. Means for making projects feasible: Means „ „ „ „ Public Sector assumes additional risk sharing, thus increasing the robustness of the project cash flow and, in turn, attracting robustness lenders with a better rate of interest. lenders If the problem cannot be resolved by risk sharing, then the public sector could take an additional equity stake in the project. public The public sector could generate additional revenue. (Case of Athens Airport. Government imposed additional tax on airline Athens tickets.) tickets.) Indirect Means Such as: „ „ „ Tax Holidays Grace Period Soft Loan(s) Infrastructure Project Global Lead Arrangers – Infrastructure Bank Loans (US $ Millions) 2005 and 2006 2006 2006 Rank Name 2005 Rank Number of Amount Percent of Facilities Underwritten Total 1. Royal Bank of Scotland 4 76 $12,029 7.1% 2. Calyon 3 69 8,745 5.1 3. Societe Generale 1 45 7,037 4.1 4. JBIC 7 7 5,935 3.7 5. BNP Paribas 2 54 5,854 3.4 6. HSBC 14 39 5,307 3.1 7. BBVA Grupo 22 35 5,213 3.1 8. West LB 6 42 4,094 2.5 9. Goldman Sachs 20 30 4,053 2.5 10. European Investment Bank 37 14 3,994 2.5 Other 1,006 98,705 62.9 Total 1,417 $160,966 100.0% Infrastructure Project Global Lead Managers – Infrastructure Bonds (US $ Millions) 2005 and 2006 2006 2006 Rank Name 2005 Rank Number of Amount Percent of Facilities Underwritten Total 1. Credit Suisse 8 7 $3,340 16.9% 2. ABN Amro 12 2 1,564 7.9 3. HSBC a 3 1,537 7.9 4. Citigroup 1 2 1,435 7.3 5. Deutsche Bank 6 4 1,393 7.1 6. Lehman Brothers 3 4 1,350 6.8 7. Royal Bank of Scotland 20 5 1,188 6.0 8. Morgan Stanley a 3 1,066 5.4 9. Goldman Sachs 2 6 997 5.0 10. Barclays 9 4 972 4.9 Other 26 4,862 24.9 Total 66 $19,704 100.0% *no deals arranged in 2005 Infrastructure Project Global Lead Arrangers, PPPs Infrastructure – Bank Loans (US$ Millions): 2005 & 2006 2006 2006 Rank 2005 Rank Name 1. European Investment Bank 6 12 $3,076 12.0% 2. Dexia Group 1 20 2,689 10.4 3. Royal Bank of Scotland 8 26 2,590 10.0 4. Epfa Bank 32 10 1,723 6.7 5. BBVA Grupo 28a 8 1,187 4.6 6. Grupo Santander 28a 6 1,143 4.5 7. Caja Madrid 5 7 1,009 3.9 8. Bank of Scotland 3 10 772 3.0 9. Calyon 14 4 761 3.0 10. BNP Paribas 43 4 758 3.0 110 9,772 38.9 217 $25,480 100.0% Other Total Market a: tied for 28th Number of Amount Percent of Facilities Underwritten Total Infrastructure Project Global Lead Managers, Infrastructure PPPs – Bonds (US$ Millions): 2005 and 2006 PPPs 2006 2006 Rank Name 2005 Rank Number of Facilities Amount Underwritten Percent of Total 1. ABN Amro 4 2 $1,564 15.1% 2. HSBC a 3 1,537 14.8 3. Deutsche Bank 2 4 1,393 13.4 4. Citigroup 7 1 1,281 12.4 5. Morgan Stanley a 3 1,066 10.3 6. Barclays a 2 733 7.1 7. Royal Bank of Scotland a 1 644 6.2 8. Merrill Lynch a 2 630 6.1 9. RBC Capital Markets 3 3 513 5.0 10. Bank of Scotland a 1 305 2.9 5 681 6.7 22 $10,347 100.0% Other Total Market Source: Adapted from Infrastructure Journal 2006 League Tables at http//www.ijonline.com and casewriter calculations. Note: Tables include infrastructure projects in which a significant part of the assets are project financed. Sectors reported include oil and gas, power, telecom, water and sewage, petrochemicals, mining, and other, excluding agriculture, aviation, real estate, manufacturing plants and shipping projects. a: No PPP deals arranged in 2005 Distribution of 620 Construction Contracts by Distribution Numbers of Years Numbers Number of Years < 1.0 1.1 to 2.0 2.1 to 3.0 3.1 to 4.0 4.1 to 5.0 Number 152 244 144 47 13 >5. 0 20 Percent 255 39% 23% 8% 2% 3% Note: The construction period is the number of years to construct the project. Mean Median 2.1 2.0 Distribution of Debt Instrument Matur...
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