Tag Archives: Social Infrastructure

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NHS Highland – New Hospitals in Skye and Badenoch/Strathspey

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.

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What can we learn from the best Smart Cities?

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OUR REPORT ON THE SMART CITIES EVENT, DEN HAAG, July 2018

In 1950, around 70% of the world lived in rural areas and 30% in cities.  By 2050 these percentages will have reversed (UN World Urbanisation Prospects, 2014). Much of this growth and shift will be in developing economies.  It is said that if everyone on earth lived a typical Western lifestyle, our ecological footprint would be so large that we would need four planets to live on!

As our world’s population grows and becomes more urban, we must become much more efficient and ‘smart’ about how our cities function.

Last week I took part in the 8th edition of the annual Smart City Event in the Hague, Netherlands. The use of smart technology and big data is already evident in the Netherland’s energy, waste and transport systems, health & social care provision and in its prison service.

Delegates and speakers from governments, business, academia and knowledge institutions shared and discussed their perspectives on what makes ‘Smart Cities’ and whether the term is meaningful.

One speaker, Oualid Ali, President of the Futures Cities Council asked a searching question: what is the alternative to being a ‘Smart City’? An ’Intellectually Challenged City’? Ali noted that digital technology and data are nothing without innovation and ideas from people.  His preferred term is “Future Cities” with the focus being on innovation, digital or otherwise.

When the jargon is stripped away we are left with the principles of sustainable development, within which ‘smart’ or digital solutions move cities toward our overarching goal of sustainability.  There are huge opportunities for cities to gather and use data to reveal patterns of use and behaviour in order to improve the efficiency and effectiveness of our buildings, transport and flows (waste, water, energy). Being ‘Smart’ is about making these flows more efficient and sustainable for the benefit of the City’s people.

City development is not a simple topic which can be easily labelled.  As we saw during the conference, the possibilities for innovation are endless.  However, here are the top five questions cities should ask as they strive to become ‘Smarter”:

  1. Do you really understand the needs of business and citizen? There is no single blueprint to make Smart Cities. Does your approach consider challenges facing your particular city (perhaps energy, waste management, mobility, or safety) and understand what your citizens consider to be a ‘good city’ to live? A top down ‘government knows best’ approach rarely works.
  1. Are interests aligned? Are you bringing your public sector, businesses, academia, consultants and civil society together with a goal of knowledge sharing and learning best practices from others? Ingenuity and a culture of openness is needed if you are to move toward a city that is fit for the future.  Organisations such as C40 Cities support this approach at an international level.
  1. Big data means big security – are you ready? The implications of gathering and storing vast quantities of data and the importance of cyber security cannot be an after-thought. Do you understand the levels of risk involved, are they at the fore, how good is your understanding of legal and regulatory frameworks?
  1. How will you get everyone over the digital divide? How will you cater for citizens who cannot access digital data and technology, perhaps because of health, status or poverty? Such citizens risk becoming marginalised, perpetuating urban inequalities.
  1. How will you pay for it? The public sector will be a key enabler, but what blend of public and private financing will be required? How will you structure the blend to fit your context and the initiatives you wish to pursue, minimising risk and maximising benefits?  An element of ‘’spend to save” will usually be needed to realise long term efficiencies and cost savings, and you should reflect appropriate timeframes in your upfront financial analysis.

Interest in ‘Smart Cities’ has grown rapidly and is now central to urban policy, planning and development.  But do ‘Smart’ or ‘Future’ cities’ offer a panacea to development and the challenges our cities face today?

Of course not, but these concepts reflect a direction of travel towards a world where we tackle the challenges of population growth, climate change and resource shortages.  More efficient, sustainable cities will better serve the people who live in them today and in the future.

Written by Lynne-Marie Thom who leads the Smart Cities, infrastructure and local economic development activities at Caledonian Economics.  She has a background in financing and implementing national infrastructure projects.  She worked with Scottish Government to develop the 2015 National Infrastructure Investment Plan including the Digital thematic component, and has helped deliver infrastructure at national, municipal and local levels, using a variety of innovative funding mechanisms to target development of growth-enabling infrastructure.

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Kosovo – Supporting the Development of the first Education PPP

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.

Colombia Investment Roadshow

Colombia Investment Roadshow

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”.

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Asian Development Bank – Learning from Scottish Education PPP models

The Asian Development Bank has published our article on Scottish Education PPP models and how they could be applied in the bank’s sphere of operations. In this blog we:

  • look at reasons why PPP is less widely adopted as a development model for education infrastructure compared to other sectors such as energy, transport and utilities;
  • consider the benefits that wider adoption of PPP could bring;
  • describe innovative structured that have been developed in Scotland; and,
  • suggest how they might be structured and deployed in the region.

The full article can be accessed on Asian Development Bank Blog.

Lynne-Marie Thom

Lynne-Marie Thom joins our team at Caledonian Economics

It is a great pleasure to welcome Lynne-Marie Thom to our team here at  Caledonian Economics.

Lynne-Marie is an infrastructure and local economic development specialist with a background in financing and advising on national infrastructure projects with experience in the UK and New Zealand.   She worked with Scottish Government to develop the 2015 National Infrastructure Investment Plan and was subsequently involved in the delivery of many aspects of the infrastructure plan at both a national and local level, using a variety of funding mechanisms.

Whilst working for Argyll & Bute Council Lynne-Marie worked on the development of the Argyll Rural Deal business case.  Argyll & Bute is a geographically complex area with a long, rugged coastline, many inhabited islands, and few major centres of population. 

In Argyll many ‘Smart Cities’ digital concepts are being considered in town and rural areas.  Examples include the roll out of public Wi-Fi in Oban, installation of ultrafast broadband at key business and innovation hubs throughout Argyll, facilities to enable remote studying for pupils and individuals in rural areas and a digital tourism strategy.   Lynne-Marie also undertook a car parking and traffic flow options appraisal for Oban town centre.  This considered the use of Smart Cities technology to collect and utilise data to ease congestion and improve the car parking experience in the busy tourist town, which would result in time savings, operational efficiencies, reduced congestion and air pollution, and an improved tourist experience.    Together, these initiatives have the potential to bring transformational change to the area, particularly for fragile rural communities.

Her experience of funding mechanisms includes Tax Incremental Financing (TIF), the Growth Accelerator, Regional Deals and PPP models, and spans the full development process from national programme development, business cases, project implementation through to delivery.

Lynne-Marie is also studying toward a BA Environmental Science (Hons) qualification and has a particular interest in how Smart Cities can drive resource management efficiency and environmental benefits in towns and cities around the world.

Aberdeenshire

Our second Aberdeenshire Schools DBFM/PPP has reached financial close

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.

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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, 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.

 

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Angus Council – transaction adviser for two new primary schools

We are very pleased to have supported Angus Council on the procurement of replacements for Muirfield and Ladyloan Primary Schools in the coastal town of Arbroath, which reached financial close on 24 November 2017.  The new schools are being developed under a single Design-Build-Finance-Maintain contract with hub East Central.

Each school will have a capacity of approximately 335 primary pupils and 72 pre-school pupils.

We supported the Council’s in-house team in confirming that financial submissions from the private sector partner are within the various limits set by the Territory Partnering Agreement and we worked closely with the financing partners to achieve a successful financial close to the project. 

This continues our long relationship with Angus Council which including supporting the initial feasibility study, and subsequently acting as transaction advisor, for the Forfar and Carnoustie schools PPP.

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Glasgow City – new Primary Schools Financial Close

The Glasgow City Council procurement of the new Blairdardie and Carntyne primary schools reached financial close on 23 October 2017 . The new primary schools will be developed under a single compact PPP contract between the Council and  hub West 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.

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Uruguay – Management of Operational PPPs

On October 9 and 10 2017, Martin Finnigan participated an inter-institutional seminar on Control and Monitoring of PPP Contracts, at the invitation of Ministry of Economics and Finance of the Government of Uruguay and the British Embassy.

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Presenting alongside Dr. Patricia Benavente (Peru) and Inspector of the Contract of UPPL No. 1 Bernardo Vidal (Uruguay), I delivered two sessions that explained the relevance of the Scottish PPP experience to Uruguay.

The event was attended by over 50 professionals with an interest in PPP in Uruguay including central government agencies, service delivery bodies, investors and funders.

I developed a theory of the forces the drive the evolution and development of PPP in an economy, and noted how managing a PPP pipeline demands the ability to adapt to foreseeable changes in the external environment, and cope with unexpected ones.

I also identified lessons we have learned in Scotland over 20 years of PPP, and interpreted these in the Latin American context.  Finally, I presented our report on the management of operational PPPs in the social infrastructure sector.