Tag Archives: Financial Close

Lessons from a New School

Yesterday I had the pleasure of attending the opening ceremony of Oban High School, a PPP school on the west coast of Scotland.  The building is a superb example of a modern learning environment, but the stars of the day were the pupils whose excitement and enthusiasm was a joy.

My team at Caledonian Economics were financial transaction advisers on the project, which reached financial close in 2016. The new building opened for pupils in 2018, with demolition of the old school buildings and sports pitches completed this year.

Oban High School Pipe Band - World Champions

Oban High School Pipe Band – World Champions

Reflecting on this in the light of my recent projects in #Azerbaijan, #Uzbekistan and #Kosovo, I wondered what lessons we can apply, as we tackle the challenges of crumbling buildings and dynamic populations in these former Soviet countries.

Lesson 1) – school estate regeneration is a long term business.  My involvement with redevelopment of schools in the region goes back to the feasibility study we wrote in 2000.  This led to a series of developments using both direct capital investment and PPP modalities.  The approach I recommend in developing countries is to:

  1. start by making the most efficient use of the classroom space that already exists;
  2. next, tackle areas of greatest need – buildings in bad condition, or mismatch between forecast population and classroom spaces;
  3. then, choose the procurement method that is best suited to the task at hand. Our large new high schools are #DBFM -type #PPPs, small primary schools are financed using government capital, and refurbishments use budgeted revenues.

Lesson 2) – listen to the pupils.  The range of facilities in the new school are striking: gymnasium, dance and music studios, workshops for vocational skills, and all weather sport pitches.  Yet, when I asked pupils what they would recommend for as priorities to maximise the impact on pupils of new school buildings in developing countries, they told me about the simple things, such as:

  1. bright, airy, uncluttered classrooms and informal ‘break-out’ spaces;
  2. avoid projectors and screens – large bright backlit monitors are much easier to read;
  3. plenty of whiteboard space, to capture important points;
  4. good school meals.

Lesson 3) – create networks of institutions.  Oban High School works closely with the small (30 pupils) High School on the remote island of Tiree.  Video links and screen sharing, backed up with in-person visits, tackle the curriculum constraints and provide developmental experiences for staff and pupils.

The Oban-Tiree link generally involves connecting classes, as compared to the one-to-one approach being followed by e-sgoil in the Western Isles.  These techniques are relevant for remote, rural and mobile communities in developing countries.  Reliability, I have been told, is more important than bandwidth: good audio matters more than high resolution video.

The network also includes the local further education (#VET) college who deliver training on construction, marine and mechanic skills.

Lesson 4) – In Oban I saw how extra-curricular after-school arts, sport and music activities build social and team-working skills, and strengthen the core curriculum.

Many schools in developing countries operate with two or three shifts of pupils – sometimes a response to population growth, but sometimes also a consequence of demand for popular schools while nearby schools have spare capacity.  Multiple shifts make extra curricular activities virtually impossible, depriving pupils of opportunities to increase the quality and value of their school days.  This is a primary determinant of ‘need’ described in Lesson 1).

Finally I would like to thank the Head Teacher Mr Bain, the staff at the school, the team at Argyll & Bute Council, and especially the pupils of Oban High School for a memorable, instructive and very enjoyable day.

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.

alford

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.

 

Dumfries and Galloway Schools PPP – Operational Support

We have been reappointed to provide financial advisory support to Dumfries and Galloway Council for the operational phase of the Smarter Schools PPP project.

DCIM100MEDIADJI_0081.JPG

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.

NHS Orkney New Hospital – Financial Close

building

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 Rank Calecon 1st global for PPP social deals.

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. 

Calec Global PPP Social Infra ranking

 

New West Calder High School Reaches Financial Close

West Lothian Council’s procurement of the new West Calder High School from hub South East reached Financial Close today, 14 December 2016.

This is the eleventh such Financial Close using the Scottish hub/DBFM PPP financing model that Caledonian Economics has advised on this year.

The new high school building has been designed to meet modern access requirements and support inclusion of pupils with additional learning needs in line with the ‘presumption of mainstream’.

The new location  will enable greater community access to the very high standard of facilities, particularly physical education facilities for community use outwith core school hours.

 

Aberdeen City – New South of the River Secondary School

Contracts were exchanged yesterday between Aberdeen City Council and hub North Scotland for the construction of a  new £45 million 1400 pupil school to service the south of the city.  This is being delivered under the Scottish hub/DBFM/PPP commercial structure.

We have supported the council throughout the project’s development, first in 2013 by helping develop the Educational Benefit Statement which underpinned the decision to create a new school by closing and merging Torry Academy and Kincorth Academy, and more recently as the Council’s financial advisers.

In this latter role we advised the Council throughout the procurement, testing and analysing the financial model, checking it was consistent with the technical solution and the central government funding offer, and ensuring it was fully optimised and delivering value for money across a range of inflation scenarios.

This continues a long relationship with the Council. We advised on the procurement of the ‘3Rs’ schools PPP from 2004 onwards, and in 2011 we assessed options for educational provision in the north western part of the city.

 

 

Our Lady and St Patrick’s School – Financial Close

West Dunbartonshire Council’s new 1000 pupil Our Lady and St Patrick’s High School reached financial close on Thursday 31 March 2016.  The new school will be built and serviced by Hub West Scotland under a 25 year hub/DBFM/PPP contract.

We were West Dunbartonshire Council’s financial advisers on the project, advising on contract negotiations, financial model analysis and payment mechanism calibration.

New Barrhead High School reaches Financial Close

East Renfrewshire Council’s new 850 pupil £25 million Barrhead High School reached financial close in March 2016.  The new school will be built and serviced by Hub West Scotland under a 25 year hub/DBFM/PPP contract.

We were East Renfrewshire Council’s financial advisers. Our role included analysis of the bidder’s financial model and funding structure, negotiation and calibration of the payment mechanism and liaison with the legal team to ensure a robust commercial solution.

Scottish Borders Council – Kelso High School

Scottish Borders Council’s replacement for Kelso High School reached financial close on 19 February 2016.  The new school for 850 pupils will be built and serviced by Hub South East Scotland under a 25 year hub/DBFM/PPP contract.

We supported the Council’s internal team throughout the process.   Our services included liaison with central government to confirm the financial support package, testing and interrogation of the commercial financial model, and liaison with the technical and legal team to ensure that the model, payment mechanism and contract were consistent and reflected the position agreed between the parties during the contract negotiations.