Yesterday, 20 December 2018, the latest NHS Greater Glasgow and Clyde healthcare PPP reached financial close. The DBFM healthcare project will procure two new facilities (the new Greenock Health Centre and Mental Health In-patient facilities at the Stobhill Hospital) from hub West Scotland under a single hub/DBFM contract. Under current plans, a third facility will be added to the contract under a pre-agreed change procedure during 2019.
We supported the NHS in-house team and were responsible for a range a financial transaction support activities including assessing financial submissions from the private sector partner, confirming that returns, margins and fees are consistent with benchmarks and confirming that the financial model is consistent with technical project details. On the day of financial close we supported rate benchmarking, financial model optimisation and completion activities.
We are helping NHS Highland procure two new DBFM/PPP hospitals from hub North Scotland. The new hospital in Broadford on the Isle of Skye will replace the ageing Dr MacKinnon Memorial Hospital, and the new hospital in Badenoch and Strathspey will centralise services currently delivered through several dispersed inpatient units that are not fit for purpose.
Within a wider redesign of health and social care services, the new hospitals will deliver a range of benefits including:
- greater numbers of people being cared for at home;
- reduced length of stay in hospital;
- co-location of specialisms and related services;
- equality of access to services;
- dementia-friendly inpatient facilities;
- more dignity and privacy for patients – 100% single rooms with en suite.
The two new hospitals will be developed under a single DBFM/PPP contract using the Scottish hub ‘compact PPP’ modality.
We will support the NHS in-house team and are responsible to assessing financial submissions from the private sector partner, confirming that returns, margins and fees are value for money and consistent with pre-agreed levels. We will liaise with technical specialists to calibrate the payment mechanism and Key Performance Indicators (KPIs), and will contribute to commercial negotiations.
We have been appointed by the International Finance Corporation (IFC) to support them and the Municipality of Prishtina with the preparation and implementation of the first Education PPP project in Kosovo. The project will see two schools rehabilitated and four new ones built. Our role will be to help address various technical and commercial issues as part of IFC’s due diligence and transaction structuring.
This will be the first Education PPP in Kosovo, and continues our leading role in structuring Education PPPs worldwide. It adds IFC (part of the World Bank Group) to the list of Multilateral Development Bank partners with whom we have worked on Education PPP assignments, a list that also includes the Asian Development Bank, Inter-American Development Bank, Development Bank of Latin America and the European Investment Bank.
Our appointment as Transaction Financial Advisers by Aberdeenshire Council on the procurement of a replacement for Inverurie Academy and Community Campus came to a successful conclusion when financial close was achieved on 19 April 2018.
This is our second such appointment by the Council, having previously supported the procurement of Alford Community Campus which opened its doors to pupils for the first time in October 2015.
Photograph credit hub North Scotland
Both new schools were procured with our support from hub North Scotland under the hub/DBFM/PPP structure. They will variously serve pupils in early years (#kindergarten), primary and secondary education and include a range of community facilities such as theatre, sports hall, swimming pool, community library and dance studio, with all-weather and grass playing fields.
The procurement of the new Bertha Park High School by Perth & Kinross Council reached financial close on 27 September 2017 . Built to accommodate pupil generated by the rapid expansion of the city, the new school will be developed under a single compact PPP contract between the Council and hub East Central Scotland.
As the public sector Financial Transaction Adviser on this PPP we supported the Council’s in-house team and were responsible for assessing financial submissions from the private sector partner. This included confirming that returns, margins and fees are in line with the market and consistent with pre-agreed levels. We worked closed with technical specialists to calibrate the payment mechanism, and supported commercial negotiations.
Caledonian Economics helps Local Authorities, Health Agencies and National Government develop and deliver excellent PPP projects. We work at all stages of the PPP process: PPP strategy development, business cases, financial modelling, transaction support, Operational PPP performance improvement, rescue of distressed projects, and Public Sector training and capacity building.
Many of the projects we have supported have been open and operating successfully for ten years or more. The senior public sector officials who have been responsible for these projects are uniquely experienced to comment on the most effective approaches to long term management of PPP projects.
We spoke to ten of these public sector professionals, asked about their experiences, and discussed what advice they would give to new projects, now and in the future.
In our new report on Operational PPP projects, we ask seven key questions about the effectiveness of PPP Management, and identify important lessons. You can read what we found out in our new report by downloading it here: Caledonian Economics Report on Operational Projects.
Senior public sector officials from central government departments in Beijing and several Chinese provinces including Jinan, Guangzhou and Hebei have taken part in our PPP Masterclasses this month. This follows events we have run previously for government officials in Latvia and Uruguay and of course many training and development events in Scotland.
Our bespoke events draw from a menu of knowledge areas that covers all financial and commercial aspects of Public Private Partnerships. They provide an ideal opportunity to learn and share expertise that equip participants will skills to develop robust projects which deliver real social and economic benefits.
Our Event Leaders include some of the most experienced PPP practitioners in the world. This professional team has worked at every stage in the PPP development process including sectoral strategy development, feasibility and planning, transaction support, operational performance improvement, and rescue of distressed PPP projects.
Please contact us if you would like to know more about how we can help you shape better projects.
We have been reappointed to provide financial advisory support to Dumfries and Galloway Council for the operational phase of the Smarter Schools PPP project.
Stranraer Academy, refurbished and extended
This project was signed in 2008 and all eleven schools were operational by 2010. The project was financed by a £127 million facility provided by HSBC and the European Investment Bank.
This reappointment continues our long relationship with the Council which spanned the project business case, tender preparation and evaluation, financial close, and project effectiveness assignments during the operational phase.
Caledonian Economics would like to congratulate NHS Orkney, Robertson Capital Projects and the project team on reaching financial close and signing the contracts for the New Orkney Hospital and Healthcare Facility.
With colleagues from QMPF we have been working with NHS Orkney for several years to support the business case and subsequent procurement under a variant of the Scottish PPP/NPD model.
The new Rural General Hospital will have 49 inpatient beds covering acute, cancer & palliative care, maternity and rehabilitation and will host a variety of services including two GP Practices, Dental and support services. When it opens in 2019 it will provide a state of the art modern building which will enhance the services staff can offer, utilising technology and the improved facilities.
More details here: http://www.ohb.scot.nhs.uk/new-hospital-and-healthcare-facilities
This continues Caledonian Economics’ long association with Orkney, having previously supported Orkney Islands Council on the procurement of the new Kirkwall Grammar School and Theatre, Pickaquoy Leisure Pool and Stromness Primary School, using a unique variant of the PPP structure.
Infradeals published their 2016 and Global PPP and Infrastructure advisor league tables in January.
With 11 signed deals at a value of $453 million, Caledonian Economics ranked first Financial Advisers to the public sector side of social infrastructure deals.