Market for PF

Question 1

Describe the market for PF.

Answer 1

• PF techniques enable projects to be built in markets using private capital to scale back government financing
• equity investors and banks or other loan lending institutions provide huge amounts of money

Question 2

Typical sectors PF

Answer 2

1) Energy: energy infrastructure, local as well as foreign markets
2) Mining: Exploitation of natural resources
3) Telecommunications
4) Public infrastructure & others

Question 3

Popular projects in distress

Answer 3

• EuroDisney
• EuroTunnel
• Iridium
• Canary Wharf
• Elbphilharmonie
• World Islands (Dubai)
• Desertec (political and social framework lack)
• Nabucco pipeline
• BBI- Berlin Brandenburg International (operational planning mistakes)

Question 4

Causes for project failure

Answer 4

• capital cost overrun
• delay in completion, with consequential increase in the interest expense on construction financing and delay in the contemplated revenue flow
• technical failure
• financial failure of the contractor
• government interference
• uninsured capital loss
• increased price/ shortages of raw materials
• technical obsolescence of the plant
• expropriation
• poor management
• financial insolvency of the host government

Question 5

Key trends driving infrastructure projects

Answer 5

• macroeconomic growth
• budgetary constraints
• expanding investors’ appetite