Globally, Public-Private Partnership (PPP or P3) transactions have become an immensely attractive method of delivering, operating and maintaining infrastructure and other assets and services which provide a "public good". There are many different types and applications for PPP/P3s in many different markets. DCS focuses on providing transaction advisory services related to PPP/P3 applications within the sectors that we focus on, including the infrastructure, energy & utilities, industrials, oil & gas and real estate sectors. PPP/P3 methods of project and/or service delivery are pursued for many different purposes.
In many cases, PPP/P3 forms of contracting may be pursued in order to attract private sector capital, innovation, expertise, management discipline and allocation of risk and responsibilities, with respect to public sector assets and services. Irrespective of the specific rationale for using PPP/P3 delivery methods, the public sector should always be able to demonstrate that PPP/P3 method of delivery provides "value-for-money" and a positive "benefit-to-cost" relationship in comparison to all other methods of project delivery (including public sector delivery, privatization or other method(s) which may be legislatively and politically acceptable). Conducting an independent cost-benefit analysis and an independent value-for-money (VfM) analysis should be typically amongst the first steps for any government or public sector entity considering a PPP/P3 (or a private sector company or consortium proposing a PPP/P3 transaction). On behalf of our public sector clients, we recommend that they undertake a detailed comparative alternative transaction structures analysis in order to determine what type of PPP/P3 is most appropriate and provides optimal value, or alternatively whether a different privatization, lease, monetization/securitization structure may be more appropriate, given the specific situation at hand. All PPP/P3 transactions should be evaluated in terms of a whole "life-cycle" cost basis. In some cases, certain cost elements of a PPP/P3 transaction such as (for example) up-front capital costs, debt and equity costs, and or operations and maintenance costs may be higher relative to a "public sector comparator". However, on a net present value (NPV), life-cycle basis the overall costs may be lower and the benefits may be higher than any other available project or service delivery method (if not, then a PPP/P3 should not be pursued). DCS experts are well-positioned and experienced in providing cost-benefit analyses and VfM analyses on behalf of our public and private sector clients.
Once a public sector client has determined that a PPP/P3 method of delivery is the preferred method for delivery of a public asset and/or service, then the next critical step is to decide the specific type of PPP/P3 transaction structure and the procurement method that will be most appropriate (competitive tender, negotiated/sole-sourced or hybrid). DCS advisory services help our clients align the capabilities of private sector capital, innovation, "know-how", efficiencies, life-cycle operational and maintenance discipline, and management resources and allocation of risks with the public sector objectives of most efficiently providing and ensuring adequate public access to safe, modern, well-maintained, efficient and affordable public facilities and services.
Often, the key interest and focus of our government/public sector clients is with respect to provision of a high-level of public services to constituents. In this case turning over the role of development, financing, constructing, operating and maintaining infrastructure assets and/or providing public services to a private sector contractor (through a PPP/P3 arrangement) can provide significant value. Our experts also have significant experience and competence in delivering projects and services under various development, financing, operating and ownership models, including Design-Build (D-B), Engineering Procurement and Construction (EPC), Engineering Procurement Construction Management (EPCM), Design-Build-Finance (DBF), Operations & Maintenance (O&M), Design-Build-Transfer (DBT), Design-Build-Operate-Transfer (DBOT), Design-Build-Operate-Maintain (DBOM), Design-Build-Finance-Operate-Maintain (DBFOM), Design-Build-Own-Operate (DBOO), Design-Build-Own-Operate-Transfer (DBOOT), and numerous similar variations. Our broad and global experience also includes all forms of PPP/P3 models, under a regulated or deregulated user fee regimes, long-term availability payment, user-fee and hybrid concession and/or lease transactions as well as stock/share, trade and asset sales/acquisitions, joint-ventures (JVs) and Initial Public Offerings (IPOs) with respect to infrastructure, utilities and service companies and assets. The following chart illustrates a spectrum of potential PPP models related to various forms public infrastructure projects.
Under any PPP/P3 transaction advisory mandate, DCS will draw from our global network of veteran industry expert advisor affiliates and our relationship consultants in order to assemble the most appropriate team to match the specific needs of the transaction at hand. This will always include leadership of DCS affiliate experts who possess decades of global transactional experience related to the specific sector and transaction type. In any PPP/P3 transaction advisory service mandate, our preferred role is always to serve as the lead project/program manager. Within this role we are also able to assist in the selection and procurement (or subcontracting) and management of other advisors, including local and international legal, technical, tax, commercial and due diligence advisors or other specialized advisors, as the specific transaction may require. To the extent that other third-party advisors are required, there are many value added advantages of allowing DCS to assist in the procurement of these advisors. First, DCS expert affiliates themselves possess many of the legal, technical, commercial and managerial skill sets and we are best positioned to determine which additional outside third-party skill sets are required and which firms or individuals should be hired in these roles. Secondly, public-private partnership transactions are often very complex undertakings, requiring the management and coordination of many simultaneous workstreams. DCS advisors are experts inproject and program management services and are ideally suited to manage and coordinate a multi-dimensional advisory team most efficiently and effectively.
Complementing our PPP/P3 transactional advisory services, DCS advisors offer the following complementary advisory services that may be applicable, dependent on the specific PPP/P3 transaction situation.
DCS experts provide comprehensive PPP/P3 transaction advisory services in the following sectors that we specialize in. Please click on the below links to learn more about the sectors that we cover:
DCS experts provide comprehensive PPP/P3 transaction advisory services to the following categories of clients: