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Infrastructure > PPP's > Flashcards

PPP's Flashcards

1
Q

Name the transaction:
Development of 3,015 permanent rooms across 14 Defence bases in all mainland States and Territories (estimated project cost is around
$1 billion). The project fi rst came to market in 2006 but was delayed as a result of the GFC. Following a recent re-launch, BAFOs are now under evaluation.

A

Single Leap 2

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2
Q

Which Infrastructure deals reached financial close in 2010

A

Penninsula Link, Arrarat Prison and refinancing of newcastle coal terminal

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3
Q

Name a PPP in South Australia

A

Royal Adelaide Hospital

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4
Q

Name some PPP’s in Victoria

A

Victorian Comprehensive Cancer Centre,

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5
Q

What PPP’s reached financial close in 2012?

A

Midland Public Hospital (WA), Eastern Goldfields Regional Prison (WA)

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6
Q

What PPP’s reached financial close in 2011?

A 
Victorian Comprehensive Cancer Centre
New Darwin Prison
Mundaring Water Treatment Plant
Queen Elizabeth Hospital Carpark
Single Living and Environment Accommodation Precinct (Phase 2)
Gold Coast Rapid Transit Phase 1
New Royal Adelaide Hospital
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7
Q

What PPP’s closed in 2010?

A

M2 Motorway Widening (NSW)
Ararat Prison Project (
Gold Coast University Hospital Car Park
Peninsula Link

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8
Q

Why do governments use PPP’s?

A

1) To attract capital

2) To increase efficiency

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9
Q

Name 3 characteristics that all PPP’s incorporate?

A

1) A contractual agreement defining the roles and responsibilities of the parties
2) sensible risk sharing among the public and private sector partners
3) financial rewards to the private party tied with the achievement of prespecified outputs

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10
Q

Which private sector party is delivering Penninsula Link?

A

Southern Way consisting of
Abigroup
Lend Lease
Bilfinger Project Investments

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11
Q

What is Penninsula Link?

A

A 27km four lane connection between Frankston and the Mornington Penninsula

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12
Q

How long is the Penninsula Link concession period

A

25 years

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13
Q

Which debt financiers were involved in the funding of Penninsula link

A

RBS, ANZ, NAB, BBVA, Santander, Bank of Ireland, SMBC, WestLB and BOTM

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14
Q

Who is the construction contractor for Penninsula Link?

A

Abigroup

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15
Q

who provided the equity for Penninsula Link?

A

Bilfinger Berger Project Investments and Access Capital Clients.

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16
Q

What are soft services? Are they reviewable?

A

For the majority of projects, only “soft services” (such as catering, cleaning, security and IT
services which do not involve a large capital investment) are appropriate for review. This is
because lifecycle maintenance costs are inextricably linked to the design and construction
costs of the project.

17
Q

What are relief events?

A

Relief Events are specified events which prevent performance by the private party of its
obligations at any time. Relief Events will not include events within the private party’s control
or which, although outside the control of the private party, are best managed by the private
party (including where the private party should have put in place appropriate contingency
plans).
Provided that certain conditions are met, the occurrence of a Relief Event will entitle the
private party to relief from default/termination. However, the private party will bear any
additional costs or losses incurred as a consequence of a Relief Event unless that event is
also a Compensation Event.

Includes:

  • Limited FM events (fire, flood, explosion)
  • Act/omissions of the government
  • industrial action that directly affects the project
  • Compensation Events
18
Q

How are modifications dealt with in PPPS?

A

Government may initiate Modifications to the facility and the Services Specifications at any
time during the contract term. The cost of government-initiated Modifications will be borne by
government.
The private party may initiate Modifications to the facility at any time during the contract term.
Government will have complete discretion as to whether and on what basis it accepts a
Modification initiated by the private party. If accepted, the Modification will be funded by the
private party. Where Modifications result in net savings due to overall improvements,
innovations, time or cost savings, those net savings will be shared with government.

19
Q

What are the 4 steps Moody’s follows when rating a PPP?

A
  1. Project Risk Assessment
  2. Capital Structure
  3. Recovery on Concession Termination
  4. Project Deed Counterparty Quality
20
Q

What are the 3 key factors that drive the credit quality of a PPP Issuer?

A
  1. Volatility of Revenue
  2. Cost Structure
  3. Force Majeure and Termination
21
Q

What sub-factors are examined when assessing the volatility of revenue for a PPP?

A
  1. Complexity of Project Operations
  2. Nature of Performance Regime
  3. Inflation Exposure & change of Law and Modification regime
22
Q

What sub-factors are examined when assessing the cost structure of a PPP?

A
  1. Market Efficiency
  2. Sub-Contractor Efficacy
  3. Sub-Contractor Liability Caps
  4. Base Case Costs Vs Benchmark
23
Q

What sub-factors are considered when assessing Force Majeure and Issuer Defaulted Termation

A
  1. Force Majeure regime
  2. Issuer Default Termination regime
  3. Concession / Sub-Contract Interface
24
Q

What factors are considered when assessing the capital structure of a PPP?

A
  1. Financial Leverage (Min DSCR, Avg DSCR and Cash Break Even)
  2. Structural Features (Step In, Lock Up, Reserve Accounts, third party support such as performance bonds from contractors etc
  3. Refinancing Risk (level of amortisation, interest and fx risk)
25
Q

What factors are considered when assessing the termination regime

A
  1. Payout should cover outstanding debt if termination for convenience by the govt
26
Q

What are the compensation principles for PPP’s if Project Co defaults

A
  1. Contract is retendered
  2. Fair market value determined by expert
  3. Fair market value determined by NPV formula
  4. No complensation

Infrastructure (4 decks)

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