Project Finance

Question 1

Who is a Stakeholder

Answer 1

• Person with interest or concern
• Client & Contractor
• Government & Investors
• Unions

Question 2

Give some examples of variations

Answer 2

• Anything which is a change to the Employer’s Requirements.
• Any change from employer on obligations or restrictions.

Question 3

Value Engineering

Answer 3

• Adding value to the scheme
• Lowering costs
• Improving buildability

Question 4

What checks should be completed on a contractor’s cash flow

Answer 4

• Front loading to help with their internal cash flow
• General inaccuracy vs the Contract Programme

Question 5

How would you cost evolving design options after you have just issued a Cost Plan update?

Answer 5

I would use a Live Cost Tracker exercise, picking up changes and capturing all of them to amend the cost plan number.

Question 6

Who is the GLA?

Answer 6

The Greater London Authority (GLA) and is the democratically elected strategic authority for London.

Question 7

How to advise client in Brexit / high fluctuating market?

Answer 7

• Rebalance supply chain to more UK focussed
• Set aside contingency
• Have contingency plan
• Brexit clause in contract
• Use of MMC

Question 8

How does a typical s curve work?

Answer 8

Splitting project into quarters in terms of expected expenditure.
1/4 in front third
2/4 in middle third
1/4 in final third

Assumed highest spend is in the middle of the programme

Question 9

Why would a cash flow ever be high at the front?

Answer 9

• contractor front loading
• items such as advanced payments in the contract which have been agreed

Question 10

What is a notional final account?

Answer 10

Interim updates with the contractor to discuss notional final account to assist discussions towards final account agreement. A consultant should keep track of this to ensure final discussions are easier

Question 11

What is a contra charge?

Answer 11

Costs which the employer recovers from the contractor, which the contractor has caused the employer to incur. A pay less notice would be issued for the amount being withheld.

Question 12

What does a statement of final account include?

Answer 12

• adjustment of provisional sums
• adjustment of prime cost sums
• adjustment of provisional quantities
• contract instructions
• fluctuations
• loss and expense