We are very pleased to be working in an international team to support the Ministry of Education in #Azerbaijan on a long term donor-funded assignment to explore opportunities to expand the use of public-private partnerships (#PPP) in the Education sector.
This country of around 10 million people is a place of great contrasts. In the capital Baku, a glitzy modern centre sits alongside ancient Silk Road caravanserais, while an easy drive on good roads crosses the arid coastal desert before rising into the Caucasus – a mountain range as high as the alps.
Azerbaijani, a language closely related to Turkish, is the main language, with most people also speaking Russian. English is not widely spoken, although this is changing rapidly as international links grow. Most of the country was part of the Russian empire in the 19th century then the USSR until independence in the early 1990s.
Education is secular and compulsory from years 1 to 9 plus a pre-school year, and a high proportion of pupils do an additional two years in school. Most then go on to college or university.
We are looking forward to identifying the most suitable PPP modalities for addressing challenges within the education system here, testing their feasibility, and helping develop capacity and capability within the country.
As financial transaction advisers to Scottish Borders Council on their Jedburgh Intergenerational Campus project, we are pleased to report that Financial Close was achieved on 25 October.
The new £32 million education campus will replace three existing schools in the town and will include #nursery, #primary, #secondary, and further educational facilities.
The project is being delivered in partnership with hub South East Scotland using the standard Scottish PPP/DBFM structure, and achieved financial close 13 months after the business case (known as the New Project Request) was approved.
This successful project continues our relationship with the Council, having previously advised them on the development of the new Kelso High School which achieved Financial Close in February 2016 and which opened on time and budget in November 2017.
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.
This week, on 21 and 22 May 2018, we attended the first Colombia Investment Roadshow in London, a joint event whose organisers included British & Colombian Chamber of Commerce; the British Embassy in Bogotá; the Department of International Trade teams in Colombia and London; The Foreign and Commonwealth Office Andean Desk and the Prosperity Fund Colombia; The Colombian Embassy in London and Procolombia.
The purposes of the event were to present the key infrastructure projects in Colombia, to explain the investment environment and to support joint initiatives to address some of the challenges that are still experienced in the sector and in the country.
A series of speakers explained the economic backdrop and investment outlook in the country, and provided personal perspectives on experiences of developing projects there. Key projects in rail, rolling stock, Smart Cities, schools, healthcare, waterways, airports and water treatment were described in detail, including explanations of the procurement process and the roles of the main protagonists.
The main points we took from the event were:
- the prospect of imminent accession to the OECD provides evidence of the rigorous process of reforms, policy and regulatory improvements that have been implemented. Between 2010 and 2017 the economy grew an average of 3.8% a year and it has one of the highest levels of foreign direct investment in the region;
- the final peace agreement concluded with FARC in December 2016 brought to an end half a century of armed conflict, and saw the start of a 15 year implementation period;
- improved connectivity and the development of Smart Cities are key to the successful implementation of the peace agreement. A large transport infrastructure initiative has been launched to tackle infrastructure bottlenecks that are holding back development, especially in rural, conflict-affected areas;
- in 2017 the Economist Intelligence Unit singled out Colombia as being well-prepared for infrastructure PPPs in the region. Forms of PPP are being used for the Bogotá Metro, renewal/operation of the Transmilenio BRT system, Cauca road network, El Dorado II Airport and to restore navigability of the Magdalena River. Pilot PPPs are being developed for schools and hospitals in Medellín, Barranquilla and Bogotá.
At Caledonian Economics we look forward to building on existing relationships in Colombia and developing new ones, so that we can play our part in the continuing success of this remarkable country and helping create, as one speaker put it, “a piece of the peace”.
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.
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 selected as preferred bidder, alongside partners in Istanbul, Ankara and Warsaw, to assist the Government of Turkey and the European Bank for Reconstruction and Development with the design and implementation of the Ministry of Health Monitoring Unit for the national Healthcare PPP programme.
This is the largest Healthcare PPP programme in the world and will deliver at least 14 new hospitals with over 26,000 beds.
Working with LPS, we delivered a half day seminar and web broadcast to around seventy representatives from Latvian municipalities and local government bodies. The Webinar described the Scottish experience of PPP, its evolution to meet the particular social aspirations of the nation, and its relevance to other states of similar size and latitude.