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.
The Glasgow City Council procurement of the new Blairdardie and Carntyne primary schools reached financial close on 23 October 2017, and the first of the schools, Carntyne, was handed over on time and budget on 19th October 2018, with Blairdardie on target for hand over on time in February 2019.
The new primary schools have been 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.
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.
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.
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.
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.
Scotland has a great record of evolving PPP models to suit particular geographic, social and political conditions going back almost two decades. Meanwhile, recent developments in Wales are breaking new ground.
In two articles recently published on the FOMIN/Inter-American Development Bank and World Bank blogs, Martin Finnigan and Michael Walker explain some of the nuances and make the case for applying such models more widely.
Education PPP seminar
This October with Maria Jimena Cordoba from Castalia we provided a Education PPP training workshop for Uruguayan government agencies including Corporación Nacional de Desarollo (CND), Administración Nacional de Educación Pública (ANEP) and the Institute for Children and Adolescents (INAU) in Montevideo. The workshop covered international experience with Education PPP and management of PPP contracts.
We also delivered a presentation on best practice in Education PPPs at a breakfast briefing event in Montevideo organised by the Inter-American Development Bank, the Development Bank of Latin America (CAF) and the World Bank to promote the forthcoming Uruguay Kindergarten PPP project.
Approximately 100 delegates from across the Uruguayan PPP industry heard our presentation which described the Scottish experience of Education PPP over the last twenty years.