A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW...

ABU DHABI BRUSSELS DUBAI FRANKFURT HONG KONG LONDON MADRID MILAN MUNICH NEW DELHI NEW YORK PARIS SINGAPORE STOCKHOLM TOKYO

Credit crunch and projects: the providers' view

Philip Vernon Partner; Energy, Transport and Infrastructure DepartmentAshurst LLP, [email protected]


Introduction

• basis of procurement • project structure• credit crunch scenarios• questions for panel


Basis of procurement

• procurement by central government/local authority• public works/services contract• subject to EU procurement regulations• now normally competitive dialogue procedure• legacy deals using negotiated procedure


Procuring Authority

EquityInvestor

Project CoFunders

Services Contractor

BuildingContractor

EquityInvestor

Project structure – spider diagram

Different sectors e.g.

• waste

• schools

• hospitals

• prisons

• transport


Procuring Authority

EquityInvestor

Project CoFunders

Services Contractor

BuildingContractor

EquityInvestor

ParentCompany

ParentCompany

Project structure – common ownership


Credit crunch scenarios

• examples of scenarios– non availability of finance– change in finance terms/requirements– change in consortium member

• timing within procurement– pre close of dialogue– post close of dialogue


Procuring Authority

EquityInvestor

Project CoFunders

Services Contractor

BuildingContractor

EquityInvestor

ParentCompany

ParentCompany

Non-availability of finance:authority funding

Loan/Capital Contribution


Procuring Authority

EquityInvestor

Project CoFunders

Services Contractor

BuildingContractor

EquityInvestor

ParentCompany

ParentCompany

Change in finance terms/requirements:change to finance terms

Increased funding costs

Increased unitary charge


Procuring Authority

EquityInvestor

Project CoFunders

Services Contractor

BuildingContractor

EquityInvestor

ParentCompany

ParentCompany

Change in finance terms/requirements:change to project agreement terms

Increased risk/ unitary charge


Procuring Authority

EquityInvestor

Project CoFunders

Services Contractor

BuildingContractor

EquityInvestor

ParentCompany

ParentCompany

Change in finance terms/requirements:change to supply chain terms



Procuring Authority

EquityInvestor

Project CoFunders

Services Contractor

BuildingContractor

EquityInvestor

ParentCompany

ParentCompany

Change in finance terms/requirements:change to equity terms



Procuring Authority

EquityInvestor

Project CoFunders

Services Contractor

BuildingContractor

EquityInvestor

ParentCompany

ParentCompany

Change in consortium member:change to equity investor


Procuring Authority

EquityInvestor

Project CoFunders

Services Contractor

BuildingContractor

EquityInvestor

ParentCompany

ParentCompany

Change in consortium member:change to supply chain


Panel discussion

Scenarios

Non-availability of finance

- authority funding

Change to finance terms/requirements

- finance terms

- change to project agreement terms

- change to supply chain terms

- change to equity terms

Change to consortium member

- change to equity investor

- change to supply chain

Questions

Effect on prequalification?

Depends on basis of procurement?

- negotiated procedure

- competitive dialogue

Depends on timing within procedure?

- pre close of dialogue

- post close of dialogue

Credit crunch – market wide issue?

Mitigants for new procurements?

State aid?


Credit crunch and projects: the providers' view

Philip Vernon Partner; Energy, Transport and Infrastructure DepartmentAshurst LLP, [email protected]

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A BU D HABI B RUSSELS D UBAI F RANKFURT H ONG K ONG L ONDON M ADRID M ILAN M UNICH N EW D ELHI N EW...

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