PPP Expertise

About Infrastructure and Public Utilities

Globally, economic development relies solely on the availability of sustainable infrastructure, capable of providing utilities services that are sufficient in quantity, quality and frequency; thereby, enabling economic activities, trade and social development. These infrastructures and utilities include: transportation, telecommunications, and energy, water and sanitation services; whose delivery and sustainability depend on the performance and serviceability of the underlying infrastructure.

Equally, this reality applies to all emerging markets economies, which are now seeking for ways to enhance their economic development, societal uplifting and trade and economic integration amongst themselves and other countries worldwide. However, these aspirations and their achievements are being severely hampered by an unprecedented shortage of key infrastructure stocks, both in absolute and relative terms.

Translated in capital cost, the infrastructure deficit stock requires a substantial amount of investment, which the various sources have estimated to be in the trillions of US dollar that are required worldwide for public infrastructure investment. These estimates include over USD 200 billion needed for PPP projects in the MENA region, and USD 360 billion in Africa, according to the recent estimates from the African Development Bank, which within the context of NEPAD, initiated a Programme for Infrastructure Development in Africa (PIDA), from 2012 to 2040.

The scale and size of infrastructure stock deficit, the volume of capital investment required for bridging the gap, the current and on-going global bearish economic landscape; are all posing considerable challenges to economic growth and sustainable development of emerging economies. Put together, these challenges are and represent now a matter of urgency for which strategic thinking, innovation and pragmatic acting cannot be overemphasized.

Addressing these challenges remains the focus of CDA Consulting practice, thus making the firm a dedicated strategic solutions provider of Infrastructure Finance and Public-Private Partnerships (PPP) Expertise in public infrastructure and utilities sectors.

Our Areas of Expertise and Focus

CDA Consulting works with a wide range of organizations worldwide, with a focus on the provision of multi-layered and cross – sectoral strategic solutions necessary for bringing forward the necessary changes and accelerating the tempo towards a sustainable economic development. We do by using our expertise to provide innovative thinking and pragmatic solutions related to policies, institutional reforms, operation and management, financing and investment and public –private partnerships (PPPs), in infrastructure and utilities sectors.

Our Infrastructure and PPP expertise spans the whole PPP Project life-cycle, covering:

• PPP Framework Development (Designing & developing PPP policy, institutional framework and PPP Law),
• PPP project Organization (including setting up the PPP Unit & PMUs),
• PPP Project identification, selection and appraisal,
• PPP Risk Assessment and Contract Structuring,
• PPP Procurement up to commercial and financial close,
• PPP Contract Management, Auditing, asset hand back & Ex-Post evaluation

Thus, our specialist expertise on Infrastructure & PPPs, focuses on:

Infrastructure policies & Institutional Reforms

Under infrastructure and institutional Reforms practice, We provide Consulting & Advisory Services, Technical Assistance and executive Capacity Building on:

• Public Infrastructure sector Policy concept & design,
• Sector diagnostic, reforms strategies & Institutional Framework Design
• Restructuring, liberalization and Public Private Partnerships (PPPs)
• Utilities pricing and subsidy policy and design
• Institutional Reforms , Regulation of Public Utilities & Services delivery
• Institutional Frameworks : Audits , Re-design and Recommendations

Infrastructure Finance & Public Private Partnerships (PPPs)

With the increasing demand for public infrastructure investments outstripping the fiscal capacity of sovereign states to finance such demand on public budgets, the recourse to the private sector to finance, build, operate and maintain public infrastructure is now a choice that no government can escape from.

Consequently, Public-Private Partnerships (PPPs) have now become an essential model of choice for public authorities, for implementing public infrastructure. Certainly, PPPs do offer a number of opportunities compared to public procurement.

However, because of the recent history of PPPs, specifically in the emerging economies; and considering the technical complexity that characterizes PPPs, public authorities find their ability to capitalize on PPPs opportunities being hampered to the degree relative to the maturity of their respective PPP markets. And this represents a challenge to public authorities, and needs to be addressed.

Addressing this challenge would require the necessary capacity for grasping the subtleties of PPP projects and their contractual agreements throughout their life cycle, from inception to asset hand back to government, where necessary.

However, there exist tools and techniques that are specific to PPPs, and which are being used by private investors and lenders; and the knowledge of such tools by public authorities remains critical to their ability to achieve win-win public-private partnerships.

Otherwise, the risks of entering into unbalanced PPP agreements remain very high, specifically because such unbalanced agreements would, at a later stage over the PPP agreement term, require to be either revised and/or at worst terminated altogether. Revising or terminating a PPP Agreement at a later stage, by Government because it realizes that the agreement was unbalanced would in turn, impact negatively both on the sovereign credit rating and on the business environment which every government is however thriving to improve in the place.

Our Expertise on infrastructure finance & Public-Private Partnerships (PPPs) helps public authorities to minimize the risks of reaching these negative outcomes such as: the need to revise or to terminate a PPP agreement at a later stage of its implementation.
Thus, spanning the whole PPP Project life – cycle, our PPP expertise is delivered through Consulting & Advisory, Technical Assistance and executive Capacity Building services, covering amongst others :

• PPP Framework Development: PPP Policy, Institutional framework & Law
• PPP Projet Identification, Selection & PPP Programmatic Landscape Development
• Infrastructure Investment Analysis & Feasibility Assessment for PPP
• Project Finance & PPP Financial Modelling
• PPP Project Risk Assessment, Valuation, Allocation and Structuring
• PPP Project Value for Money Assessment, Affordability and Cost Benefit Analysis
• Project Finance & BOT Projects Structuring & Advisory for PPPs
• PPP Project Revenue Bonds Advisory, Structuring and Issuance
• PPP Terms of Reference Development, Concessions Drafting and Review
• PPP Procurement Advisory: Process Design, Advisory, Bids Evaluation and Negotiations
• PPP Agreement Monitoring, Auditing, Mid-Term Reviews & Renegotiations
• PPP Project Asset Hand Back & Ex-Post Evaluation

Infrastructure/Utilities Operations, Enterprise and Asset Management

With growing constraints on the capacity of infrastructure and utilities supply systems to deliver safe and reliable services to their customers, the pressure is greater than ever on public utilities to improve their productive efficiencies, so to effectively respond to growing demand for public utilities services.

However, most of the times, the majority of utilities supply systems in emerging economies are often characterized by a vicious cycle of low efficiency, high costs, aging and poorly maintained infrastructure, leading to low service quality, and low customer esteem and support.

Whilst welcoming the ongoing efforts that are being made by public utilities’ managers to improve the overall functioning of their utilities, including the implementation of government reforms; public utilities in emerging economies are yet confronted with a number of other challenges inherent to the very nature of public utilities supply business model. These challenges include, amongst others: the unreliability of input supply – such as power supply-, low level of service with intermittent service delivery, low serviceability of assets, insufficient funding, which in turn implies in part, the application of non-cost reflective and inadequate tariffs levels and structures.

As with all infrastructure services, the sustainability of a public utility supply services can only be achieved when the utility’ managers are able to strike and maintain a balance between: Their utility’s – Income – it’s Assets & – the Levels of Service it aims at delivering.

Notwithstanding the inadequacy of income, often in the form of low and non-cost reflective tariffs; managing public utilities’ infrastructure network assets through better operation coupled with the latest Enterprise an Asset Management practices, remains a key determinant of the levels of service to be expected from such utilities’ assets.

Hence, our expertise is aimed at enabling public infrastructure and utilities’ managers to address the challenges related to the operations and management of utilities’ systems amid reduced income, and more importantly, how to optimize the efficiency of such systems through better operations, enterprise and asset management practices, amid the available resources at their disposal.

We provide Consulting & Advisory Services, Technical Assistance and executive Capacity Building on infrastructure/utilities Operations, Enterprise and Asset Management, covering amongst others:

• Utilities Due diligence and Turnaround strategies
• Operational and Enterprise Management  Strategies
• Utilities pricing, Tariffs Review and Re-design
• Utilities Cost Recovery Strategies & Best Practices
• Setting Standards and Performance Targets,
• Benchmarking and Performance Improvement Planning,
• Enterprise Management Systems
• Developing public utilities’ Asset Register and Asset Management Plan
• Asset management, Maintenance and Capital investment planning.