K-infra launches a webinar series on PPP best practice
1st Master class: good practice and approaches to Value for Money analysis
Andrés will review different approaches worldwide, from countries that focus the analysis for approval of the project in qualitative aspects, using the quantitative assessment against the PSC to evaluate proposals, to others -the most common approach in emerging markets- which focus or even base the assessment for approval of the project solely on a quantitative assessment.
We will learn different approaches to risk adjustment (how sophisticated are the countries in quantifying the risks?) and tax neutrality adjustments, rate of discounts, incorporation of third party revenues (could they be different in the cost projections of the two models?), the risk of missing renewals in the PSC or the incorporation of non-financial benefits (should we quantify the higher reliability of the PPP?). Other issues that will be discussed where there is no universal consensus, include the monitoring and contract management costs or the structuring/transaction costs, as well as the incorporation of uncertainty through sensitivities.
The last topic that will be covered deals with the timing of the VFM assessment: when should we do and report for approval the quantitative VFM? Should we update the assessment during the contract life?
Each topic will comprise Andrés’ favorite approach through a step-by-step summarized description of the VFM calculation process.