Public Private Partnership (PPP) is a partnership between the
public and private sector for the purpose of delivering a project
or service traditionally provided by the public sector.
Most countries in Asia have embarked on reforms of their infrastructure
sectors during the past few years. But despite the active wooing
of private investors by Asian governments and their efforts
to reform this sector, the number of infrastructure projects
with private participation has been limited. For example, relatively
few independent power provider (IPP) projects have been commissioned,
and very few build-operate-transfer (BOT) projects in water,
transport, or ports have reached financial closure. The reasons
for this slow progress have been well documented in the proceedings
of various power industry seminars and in other industry publications.
Private developers, however, need to recognize that the environment
for private investment in Asia has been changing rapidly over
the past few years and that attractive opportunities are becoming
available to private investors.
Under PPP arrangements, risks are transferred to the private
sector on the basis of a monetary return for accepting those
risks. There is a balance to be struck between minimizing the
cost to the taxpayer, while at the same time providing the returns
required by the private sector, under the bidding process, for
undertaking the project and its associated risks. A well managed
competitive process is essential to achieving this balance.
Strategy
planning, project structuring, development and the management
structure.
An
independent view of the financial feasibility of the project
and its bank ability.
The
Cash Flow Model
Bringing
the Project to Financial Close