PPP arrangements promise much. The best projects have delivered better public Infrastructure sooner and more cheaply. But there have also been unsuccessful projects which show that a sophisticated decision-making process is required.
The key message is that PPP proposals require systematic, case-by-case assessment. There are no general rules except to master the detail of each project and to organise that detail using appropriate analytical tools. This webinar describes the state-of-the-art method to do so and explains the tools used in making a PPP decision.
By attending the webinar on how to make the Private Public Partnership decision, you will learn how Value for Money may be assessed. It focuses on the elements of the so-called Public Sector Comparator. The presentation proceeds sequentially through
The Net Present Value calculations
The selection of an appropriate discount rate
The Competitive Neutrality adjustment
The valuation of risk and the concept of risk transfer.
At each point the lecture considers some of the difficulties in making estimates. There are problems, often better recognized among researchers than practitioners, and Dr. Chapman clarifies the issues involved.
In particular, decision makers must understand the concepts of systematic and non-systematic risk and be aware of the so-called PPP Paradox. These issues are relevant to the risk premium used in valuations, using what is known as the project’s beta value. They also affect the process of risk transfer.
While the difficulties must be understood, the purpose of the webinar is to be useful. There are practical solutions to these problems and these are also clarified.
The lecture concludes by emphasizing the missing elements of the PSC analysis. These missing elements include the interactions among infrastructure assets. It makes the final point, that the PPP decision cannot be made based on measurement. The decision also requires judgement.