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By Michael Dembinski, head of policy, BPCC
The BPCC’s Public Projects Finance Forum, held at Warsaw’s Le Meridien Bristol hotel on 18 June, drew representatives of local authorities from across Poland as well as BPCC members from the construction, advisory and investment banking sectors.
The aim of the day was two-fold; firstly to meet local authorities and hear from them directly about the infrastructure projects they seek investors for, and secondly for BPCC members to present international best practice in public project finance.
Welcoming delegates to the forum, BPCC CEO Martin Oxley said that the issue of public infrastructure would stay on top of the national agenda for the new few years, and that while banks’ appetites for lending is currently diminished, the demand for infrastructure will not go away, and deadlines loom.
Alina Sarnacka, Manager, Transport, Infrastructure and Public Sector, at PricewaterhouseCoopers, set out all the options available to local authorities when looking to finance infrastructure projects, including bank loans, revenue bonds, EU funds and public-private partnerships and PPPs. After enumerating each one along with its advantages and disadvantages, Ms Sarnacka outlined how local authorities should choose the optimal form of structure for a given project. She also advised that while conducting financial analyses, to take an ‘optimism bias’ into account from the outset – projects do have a tendency to overrun budgets and deadlines.
Marcin Oszczuk, of CMS Cameron McKenna, described the current legal situation surrounding the laws on public purchasing, PPPs and concessions on public building and services. The key difference between a PPP and a concession, he said, was that in cases where the end user pays over half of the revenues from a given project (for example a multistory car park), the concession law applies, whereas if the bulk of the payment for making a given piece of infrastructure available comes directly from the public sector, then the PPP law applies.
Janusz Słobosz, Practice Director of Aon Global Risk Consulting, considered the topic of risk when applied to a PPP; how the risk is to be attributed between public and private partner, and how to insure against risk. He differentiated different types of risk as it could arise throughout the construction and operation phases, and the products available to insure real estate and revenue streams as well as professional indemnity.
Wadim Kurpias, Partner at CMS Cameron McKenna, offered advice as to how both private and public parties should prepare themselves for working together. Attitude is crucial, he said. Where one party tries to off-load all the risk on the other, there cannot be any chance of win-win, which is key to a successful PPP project. He outlined the issues that a public sector body such as a local authority needs to have clear before approaching potential public sector investors.
Following lunch, there was a two-hour period set aside for face-to-face meetings, where delegates could speak to local authorities about their projects, and where BPCC members could explain their products and services to one another.
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Presentations:
Aon Polska
Zarządzanie ryzykiem w projektach PPP
CMS Cammeron McKenna
Ustawa o PPP a Ustawa o koncesji na roboty budowlane lub usługi
CMS Cammeron McKenna
Na co zwracają uwagę inwestorzy?
CMS Cammeron McKenna
How to Present a Project To Potential Investors?
PricwaterhouseCoopers
Methods of financing public infrastructure projects
PricwaterhouseCoopers
Selecting the right form of financing
Projects:
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