Successful project delivery

Crispin Pettifer

Partner & LEAD CONTACT
  • Harrogate, Newcastle
  • Projects, Construction, Commercial
  • Harrogate/01423 724001 Newcastle/0191 230 0669
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Highly experienced in delivering successful projects

PPP projects share key features whether they follow the various standardised industry PFI routes or are highly bespoke. Successful project delivery requires an early focus on the critical success factors.

We identify the critical success factors of most successful PPP arrangements as follows:

Compliant procurement

Procure the project within a decisive and precise EU law–compliant procurement process. Whilst previously the negotiated procedure would have been the procurement route of choice, offering great flexibility, changes in EU Procurement Law now mean that for most complex projects the competitive dialogue procedure should be utilised.  This enables the alternative solutions to be explored in a dialogue phase. Care is required to ensure that this stage is navigated smoothly, not only to preserve project momentum, but also to ensure that bid costs for bidders do not pose a disincentive to bidder’s participation.

Effective contractual framework

Early commitment to a complex structure of contractual arrangements with a private sector provider (and its funders, sub-contractors and suppliers) for the design, construction, financing, operation and maintenance of a facility to deliver services or supplies under a long-term concession agreement.

Clear risk allocation

Achieve the right allocation of risk and opportunity to the private sector. On the one hand this means value for money for the public body, (including guaranteed energy cost savings, reliability and reductions in carbon emissions in the case of CHP projects) underpinned by carefully calibrated and easily monitored performance targets (KPIs) and a payment mechanism that operates to incentivise good provider performance. On the other hand it may mean that the private provider reserves the right to exploit the additional capability of the facility.  The negotiation of a contract outline and development of risk-sharing principles at the outset focuses the parties on the performance aspects of the project at an early stage.

Careful asset transfer

An underlying lease or licence of the site of the new purpose-built building for the duration of the service contract. This needs to be coupled with clear definition of the provider’s duties in respect of the public body’s site requirements and its own wider responsibilities. The ancillary responsibilities of each party to support and secure the facility should also be carefully considered – including possible environmental, employment and health and safety issues that may arise.

Making the legal fit the financials

Structuring the transaction to take advantage of any identified opportunities for additional shared benefits between the parties e.g. to maximise tax efficiencies and alternative funding streams and integration of structural approach with accountancy input on balance sheet treatment.

Case studiesView all

  • Biota! National Aquarium development

    National Aquarium development. This project is for the development of a £100 million new National Aquarium in London’s Docklands. A section 106 Agreement with Newham Borough Council requires the Aquarium to be the trigger for the wider development of Silvertown Quays.

    View Case study
  • Ryhurst Limited

    Bidding support to become Strategic Estates Partner for Cheshire & Wirral Partnerships NHS Foundation Trust and formation of Villicare LLP.

    View Case study

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