Public Private Partnerships: Principles for Sustainable Contracts

Preface
Contents
About the Authors
List of Figures
List of Boxes
List of Tables
Chapter 1: Public-Private Partnerships for Infrastructure and Service Delivery: An Introduction
	1.1 Public-Private Collaborations in General: A Comprehensive Framework
	1.2 PPP: Main Features and Applications
	1.3 Policy Goals Beyond PPP and the Challenges to Achieve Them
	1.4 From Traditional to Strategic Procurement: Lessons from Covid-19 to Create a Shared Culture to Foster Partnership Between Public and Private Sectors
	Bibliography
Chapter 2: Private Investments for Infrastructure
	2.1 Investing in Infrastructure
	2.2 Blended Finance: A Meso-Level Partnership to Attract Investors (also) in Infrastructure
	2.3 Specific Policy Measures to Attract Investors in PPP Transactions
	References
Chapter 3: PPP Legal Framework
	3.1 The Development of an EU Legal Framework on PPP
	3.2 Court Case Law on Concessions and the Concessions Directive: No More Ambiguities and False Myths
		3.2.1 The First Myth: “Operating Risk Must be Quantified So As to Reach a Certain Minimum Amount”
		3.2.2 The Second Myth: “Operating Risk may Only be Based on Demand”
		3.2.3 The Third Myth: “Concessions are Based on a Three-Party Relationship, Whereby the Concessionaire Recoups its Investments and Costs Through Tariffs (Actually or Virtually16) Paid by Users”
	3.3 The EPEC Guidance Note
	3.4 Normal Operating Conditions and Operating Risk Versus Other Contract Risks
	3.5 Operating Risk: Between the Concessions Directive and Eurostat Principles
	3.6 Brief Notes on Procedural Aspects
Chapter 4: PPP Contracts and Features
	4.1 Introduction
	4.2 User Fee-Based PPP
	4.3 Availability-based PPP
	4.4 Build, Lease, and Transfer
	4.5 How to Link PPP Payments to Inflation
	4.6 Modifications and Re-negotiation of PPP Contracts: A Legal Perspective
	References
Chapter 5: Project Risks and Optimal Allocation
	5.1 Risks Classification
	5.2 Estimating the Cost of Risks
	5.3 PPP Accounting in the European Union
	Appendix
Chapter 6: From Traditional to Outcome-based Public-Private Partnerships: Social Impact Bonds
	6.1 The Rise of SIBs
	6.2 SIBs’ Features Emerging from International Experiences
	6.3 Some Critical Reflections on SIBs
	6.4 Can SIBs’ Experience and Philosophy be Applied to Traditional PPP Contracts?
	References
Chapter 7: Principles of Capital Budgeting for Infrastructure Financing
	7.1 The Aim of Capital Budgeting for Infrastructure Financing
	7.2 Capital Budgeting Tools for Investment Appraisal
		7.2.1 Pro-forma Financial Plan
			7.2.1.1	 Cash Flow Calculation
		7.2.2 Profitability Metrics: NPV, IRR, and the Appropriate Discount Rates
			7.2.2.1	 The Time Distribution and Value of Cash Flows
			7.2.2.2	 NPV
			7.2.2.3	 IRR
			7.2.2.4	 The Appropriate Discount Rates
		7.2.3 Cover Ratios: DSCR
	7.3 Applying Capital Budgeting Tools to Infrastructure Financing
		7.3.1 Modelling of Key Input Data
			7.3.1.1	 The Timing of the Investment and the Appraisal Horizon
			7.3.1.2	 Investment Costs (capex)
			7.3.1.3	 Changes in Working Capital
			7.3.1.4	 Public Grants
			7.3.1.5	 The Financial Structure and the Mix of Funding Sources
			7.3.1.6	 Analysis of Operating Costs and Revenues During the Operating Life of the Project
			7.3.1.7	 Macroeconomic Variables
		7.3.2 Cost of Capital
		7.3.3 Sensitivities
	7.4 Appraising Infrastructure Investments: The Concept of Economic and Financial Equilibrium
	7.5 Contract Renegotiation Using Capital Budgeting Tools
	References
Chapter 8: Value for Money Analysis: Standard and Value-based Methodologies
	8.1 Evaluating Public Projects and Programs
	8.2 Value for Money Analysis
	8.3 How to Carry Out a Standard Value for Money Analysis
	8.4 The VfMA of a PPP Contract for a Large Hospital in North Africa
		8.4.1 The Evaluation Process
	8.5 Value for Money: How to Include the Social Dimension in the Analysis of Infrastructure PPP Projects
	8.6 Value for Money: How to Include the Social Dimension in the Analysis of PPP Projects Based on a Service Innovation
	References
Index