kogi state - ppp training
TRANSCRIPT
-
7/31/2019 Kogi State - PPP Training
1/40
Michael Andersen
Public Private Partnership Proposal
October 2012
TRAINING - LONDON
Kogi State Government
-
7/31/2019 Kogi State - PPP Training
2/40
Michael Andersen
Public Private Partnership Proposal
October 2012
TRAINING - LONDON
Kogi State Government
-
7/31/2019 Kogi State - PPP Training
3/40
Disclaimer
9/10/2012 3Michael Andersen
This Proposal is made by Michael Andersen Advisory Services, a Nigerian Accounting and Audit practice,
is in all respects subject to the negotiation, agreement, and signing of a specific engagement letter or
contract.
This Proposal contains confidential material proprietary to Michael Andersen Advisory Services. The
materials, ideas, and concepts contained herein are to be used to assist Kogi State in conducting a Public
Private Partnership Training for some of its Commissioners, Permanent Secretaries, Directors and Special
Assistants.
This information and the ideas herein may not be disclosed to anyone outside the intended parties or be
used for any other purpose, except with the prior consent of Michael Andersen Advisory Services.
This proposal is subject to the satisfactory completion of Michael Andersens customary evaluation of
prospective clients and engagement.
Should you decide not to engage Michael Andersen Advisory Services, please return this Proposal along
with any photocopies, and ensure that this document is not distributed to, or shared with other parties.
-
7/31/2019 Kogi State - PPP Training
4/40
9/10/2012 Michael Andersen 4
His Excellency
Governor Idris Wada
The Executive Governor of Kogi State
Government House, Lokoja
Kogi State, Nigeria.
28th September 2012
Dear Sir,
On behalf of Michael Andersen Advisory Services (MichaelAndersen), we would like to thank you for the
opportunity to submit this proposal to provide training on the methodologies and Best Practices of establishingviable Private Public Partnerships (PPP) in the State.
Michael Andersen is delighted to submit this formal response which presents our scope of work, approach and
methodology, experience and capability with respect to assisting you in achieving your goals in these respects.
Michael Andersen Advisory Services
No 228B , Eti Osa Way
Ikoyi
Lagos
Nigeria.
Telephone : +44 7818366186, +234 7033420653;
+234 8056667569;
Email: [email protected]
Internet: www.michaelandersen.biz
-
7/31/2019 Kogi State - PPP Training
5/40
9/10/2012 Michael Andersen 5
We have carefully considered your requirements and believe that we are ideally placed to provide you with the services
you require. We are putting forward a team that comprises seasoned professionals with deep transaction experience.
These professionals understand the salient local market conditions and technical issues associated with the proposed
engagement and are expected to bring their expertise to bear towards a successful execution.
Accordingly, we would like to draw your attention to the following aspects of our business:
Michael Andersen is amongst the leading advisors in the Public and Private Sectors in Nigeria, offeringunrivalled experience in the areas of Audit and Accounting support services.
Michael Andersen is currently executing numerous related training and advisory services.
The team is ready to commence work when instructed and enthusiastic about the prospect of working with you. We
look forward to demonstrating our commitment for this engagement and we trust that this is reflected in our proposal.
Yours faithfully
Michael Olujitan
-
7/31/2019 Kogi State - PPP Training
6/40
Outline
9/10/2012 Michael Andersen 6
Who Are We?
What We Can Do
Why Michael Andersen?
Team Structure
Business Arrangements
Key Contacts
-
7/31/2019 Kogi State - PPP Training
7/40
Who Are We?
We are a leading Audit,
Accounting, Taxation and
Consulting group of firms located
in Abuja.
Our main focus is Training,
Business Consulting, Auditing,
Accounting, Financial Advisory
and Taxation for Public andPrivate Sector Organizations.
We are Accounting Solution
Providers with public and private
sector focus and we create valuefor our clients and maximize our
Audit
Tax
AccountingConsulting
FinancialAdvisory
9/10/2012 Michael Andersen 7
-
7/31/2019 Kogi State - PPP Training
8/40
Who Are We?
Our Competence
We are a team of diligent professionals with excellent track record
and drive for continual success. We have a global vision and our
principal activities include :
Training
Private - public partnership advisory;Providing advisory services on business re-engineering and
restructuring;
Crafting of business plans;
Audit and Assurance services;
Accounting Support services;
Rendering due diligence and financial modelling services;
Advisory services on enhancement of internally generated
revenue.
9/10/2012 Michael Andersen 8
-
7/31/2019 Kogi State - PPP Training
9/40
Outline
9/10/2012 Michael Andersen 9
Who Are We?
What We Can Do
Why Michael Andersen?
Team Structure
Business Arrangements
Key Contacts
-
7/31/2019 Kogi State - PPP Training
10/40
What We Can DoOur Proposed Services
Our aim, at the end of the training, is to ensure that all participants: obtain a basic understanding of PPP;
understand the advantages of PPP procurement;
know the typical projects for which PPP financing is used;
gain appreciation of the contract options and deal structures used
for PPP procurement;
appreciate the key principles underpinning PPP, as well as the key
players and their roles in PPP procurement; and
know the critical factors necessary for successful PPP
implementation.
9/10/2012 Michael Andersen 10
-
7/31/2019 Kogi State - PPP Training
11/40
What We Can DoOur Proposed Services
Some of the topics, in addition to others, that will be discussed in theTraining include:
9/10/2012 Michael Andersen 11
Definition of PPP
Features of PPP
PPP vs Other Methods
Range of PPP Options
Benefits of PPP
Key Principles
Key Structures, Players and Roles
Types of PPP
Success Factors
-
7/31/2019 Kogi State - PPP Training
12/40
Public Private Partnership (PPP)
9/10/2012 Michael Andersen 12
Competencies and
Know-how of thePrivate Sector
Private
Capital
Roles and
Responsibilities
of the Public
Sector
Fiscal
Resources
Cooperation with thePrivate Sector
Contracting Public-Private
Partnership
Privatisation
Contractual
arrangements
-
7/31/2019 Kogi State - PPP Training
13/40
Public Private Partnership
What It Is
Long-term contractual
arrangement
Public sector retains strategic
control over service delivery
Private Sector contractor takes full
responsibility for design, delivery
and operations
Private Sector contractor accepts
the responsibilities and risks of
delivering the project
Payments are made by the public
sector partner (or the public) for
performance and availability and
in some cases usage
Whole life costs are minimised
What It Is Not
Simple outsourcing of
functions where substantial
financial, technical and
operational risk is retained by
the public sector
Donations by a private sector
institutions for a public good
Privatisation or divesture of
state assets and/or liabilities:
the public sector retains
ownership and shares
risk/reward
Commercialisation of a public
function by the creation of a
state owned enterprise9/10/2012 Michael Andersen 13
-
7/31/2019 Kogi State - PPP Training
14/40
Public Private Partnership (PPP)PPP vs. Traditional Procurement
9/10/2012 Michael Andersen 14
Traditional Procurement
The Public sector:
Writes project specifications
Manages construction ordevelopment contract
Pays capital over the
development period
Operates and manages the asset
The private sector:
Builds to specifications produced
by the public sector
In some cases, provides services
outsourced to it by the publicsector
PPP
The Public sector:
Specifies (with consultants and
advisors) its service requirements
Waits for specified services to be
provided through the PPP
contract
Monitors service delivery and
performance
Retains overall responsibility forservice provision
The private sector:
Manages the PPP contract
Funds the capital cost, which it
recoups through servicea ments
-
7/31/2019 Kogi State - PPP Training
15/40
Public Private Partnership (PPP)PPP vs. Traditional Procurement
9/10/2012 Michael Andersen 15
Why PPP may be better than
traditional procurement
Estimated
costs
Government
exposure
Time
Exposure to
construction time
overrunsExposure to
operating cost
overruns
Traditional Public Funding
Exposure to
construction costoverrunsN
Amount of the
service payments
locked-in prior to
commencement
PPP Funding Approach
Time
No payments until
facilities are available
for useN
-
7/31/2019 Kogi State - PPP Training
16/40
Public Private Partnership (PPP)PPP vs. Privatisation/Divestiture
9/10/2012 Michael Andersen 16
Privatisation
Publicly owned assets are not
sold off to the private sector
In many cases, assets initially
funded by the private sector are
eventually transferred to the
public sector
Public sector retains ownership
and ultimate responsibility for
service provision
Core services continue to beprovided by the public sector,
while ancillary service provision is
shared with the private sector
Public authorities responsible for
policy and levels of service
Private sector is paid according toperformance in reaching agreed
PPP
The Public sector:
Specifies (with consultants and
advisors) its service requirements
Waits for specified services to be
provided through the PPP
contract
Monitors service delivery and
performance
Retains overall responsibility forservice provision
The private sector:
Manages the PPP contract
Funds the capital cost, which it
recoups through servicea ments
-
7/31/2019 Kogi State - PPP Training
17/40
Public Private Partnership (PPP)Range of PPP Options
9/10/2012 Michael Andersen 17
Public SectorOwnership
2-3 yrcontracts
Typical Characteristics of PPP Options (contract length is indicative)
Risk Transfer to Private Sector
THE PPP SPECTRUM
Leasi
ng
Divestitu
re
Includes
arrangements such
as Concession,
BOT, BOO, PFI,
DBFO, PPI
Private SectorOwnership
3-5 yr
contracts contracts
permanent20-30 yr
Note: Different countries use different terminology to refer to essentially similar
arrangements.
Managem
ent
Contract
-
7/31/2019 Kogi State - PPP Training
18/40
Public Private Partnership (PPP)Range of PPP Options (2)
9/10/2012 Michael Andersen 18
Fully
Private
Operation &Maintenancecontract
DesignBuild
DesignBuildOperate
LeaseDevelopOperate
Buy BuildOperate
BuildTransferOperate
BuildOperateTransfer
Build OwnOperate
Roles, Skill Requirements, and Risks of Private Sector
Low High
-
7/31/2019 Kogi State - PPP Training
19/40
Public Private Partnership (PPP)Typical Deal Structure
9/10/2012 Michael Andersen 19
Special purpose vehicle
Public sector partnerLenders Advisers
AdvisersPrivate sector partner
Design and constructionOperation and maintenance
Direct agreement
Equity agreement
Service contract
Sub-contracts
Loans
-
7/31/2019 Kogi State - PPP Training
20/40
Public Private Partnership (PPP)Parameters and Rationale
9/10/2012 Michael Andersen 20
Serious (i) service delivery and (ii) infrastructure backlogs
Internationally a new approach to service delivery whereby
Governments should ensure delivery, and not necessarily deliver it
themselves
Expenditure demand is outstripping income (almost all over the
world)
PPP is clearly and unambiguously seen by Governments to be
part of the solution to these backlogs
-
7/31/2019 Kogi State - PPP Training
21/40
Public Private Partnership (PPP)Parameters and Rationale (2)
9/10/2012 Michael Andersen 21
Fiscal
Quality of service
Financial
Political
Ideological
Management
Technological
To provide better value for money and give government expenditure
(capital and recurrent) more impact
To provide more effective, efficient, reliable and responsive
services to clients
To mobilise capital markets to provide long-term funding at competitive rates
To enhance community, client or pressure group involvement in the
provision of services
To increase private sector involvement in government operations
To empower and motivate employees and make operations more
businesslike
To apply new information technology, innovative design, new construction and
materials technology
Specific goals
-
7/31/2019 Kogi State - PPP Training
22/40
Public Private Partnership (PPP)Key Principles of PPP
Value for MoneyThis is achieved when the required quality of service is delivered at
a cost that is cheaper than the cost of conventional public sector
delivery of the same services. It means that the provision of a public
sector function by a private party results in a net benefit to the
institution, defined in terms of cost, price, quality, quantity, or risktransfer, or a combination of these.
Risk and Responsibility Transfer
A PPP contract transfers many of the risks of ownership of theproject to the private sector, which puts its capital behind the
successful delivery of the facilities and service.
The payment structure (or mechanism) is the principal means of
defining the risk allocation within the project.9/10/2012 Michael Andersen 22
-
7/31/2019 Kogi State - PPP Training
23/40
Public Private Partnership (PPP)Key Principles of PPP (2)
CompetitionBids should be compared for:
Value
Contractors ability to accept risk
Benefits compared to a conventional solution
Innovation
Suitability as a long-term supply partner
The Specification of Service Outputs
The public sector partner should concentrate on stipulating therequired service outputs, allowing the PPP Contractor as much
latitude as possible as to how these output requirements are met
9/10/2012 Michael Andersen 23
( )
-
7/31/2019 Kogi State - PPP Training
24/40
Public Private Partnership (PPP)Key Principles of PPP (3)
Affordability
Particular PPP projects must be affordable to the public sector
partner. Affordability is whether the cost of the project over the whole
project term can be accommodated within budgetary limits, given
existing commitments. It involves considerations such as the extentof any capital contribution by the public sector partner to the PPP
project, the annual limits of the unitary payment, and the costs of
managing the PPP agreement.
9/10/2012 Michael Andersen 24
P bli P i t P t hi (PPP)
-
7/31/2019 Kogi State - PPP Training
25/40
Public Private Partnership (PPP)Benefits
9/10/2012 Michael Andersen 25
Government
Reduces borrowing
Capital freed for otherexpenditures
Encourages public sectorreform new ways of working
and new approaches toservice delivery
Improves project deliverytime, cost and quality
Defers payments over thecontract period
Improves cost estimatesgiven robust analysis
Strategic control of the projector service delivery remainswith the public sector
Risk transfer to the privatesector
Private Sector
Greater scope for doingpublic sector business
Expertise can be used andfurther developed
Goes to profitability
Growth and job creation Leverage
Increased debt capacity
Lower financing costs
Public
Earlier access to improvedfacilities or services
Tax rates remain unaffected
Higher finish standards
Ability to maintain desired
service standardsAny savings equal more
efficient use of public money
Operators incentivised todeliver service standards forwhole-life of the asset
Develops long-term outlooksand better understanding of
total project costs
P bli P i t P t hi (PPP)
-
7/31/2019 Kogi State - PPP Training
26/40
Public Private Partnership (PPP)Key Structures
9/10/2012 Michael Andersen 26
PPP
IMPLEMENTATION
PLAN
Ministry
PPP Units
Infrastructure
Development Plan
Inter-cabinet
PPP Group
Public/Private
PPP Panel
Local government
PPP Units
Central PPP Taskforce
Cabinet
Sub-Committee
Budgetary, Legal &
Regulatory
Framework
P bli P i t P t hi (PPP)
-
7/31/2019 Kogi State - PPP Training
27/40
PPP units/ taskforces at various levels of government comprisingprocurement, finance and legal experts from the private sector,
working alongside civil servants. The taskforce is responsible for:
promoting a wider understanding of the principles of the PPP
within the public sector; setting a framework for identifying projects that are suitable/not
suitable for PPP (including selection of pilot projects);
acting as a one-stop advice centre for potential private sector
bidders/investors;
developing templates (such as standard contractual terms) for
addressing problems that arise on PPP projects;
identifying ways in which the public sector can use PPP to
provide more and better services; etc.
Public/ Private PPP panel comprising representatives from the publicand rivate sectors. This consultation rou should onl meet about
Key structures, players and roles [2]
Public Private Partnership (PPP)Key Players and Roles
P bli P i t P t hi (PPP)
-
7/31/2019 Kogi State - PPP Training
28/40
External advisers and consultants comprising a a team ofspecialists who will bring financial, legal, technical and
project management experience to the analysis,
negotiations and implementation of PPP projects on behalf
of the public.
Inter-cabinet (ministerial) PPP group comprising
representatives from all the PPP units. The group will meet
regularly to:
report on a regular basis to the Cabinet Sub-Committee;
debate common policy issues and agree a public sectorposition; and
initiate the development of policy guidance.
Private sector participants who need to be actively cultivated
for successful execution of a PPP scheme.
Public Private Partnership (PPP)Key Players and Roles
P bli P i t P t hi (PPP)
-
7/31/2019 Kogi State - PPP Training
29/40
Public Private Partnership (PPP)Types of PPP Projects
PPPs may be used for a wide variety of projects, provided that they arejustified by a demand or existing need for which a business case can bemade, and the proposed partnership does not compromise governmentsfinancial targets.
The project may involve the delivery of physical infrastructure or ancillary
services.
Transport - roads; light rail; ports; airports; water & sewerage treatment
plants; schools; hospitals; defence; residential housing; governmentoffices; conference centres; sports stadia and leisure facilities; prisons,
etc.Services which complement physical infrastructure may also provide
opportunities for PPPs, either in conjunction with an agreement to
provide the physical infrastructure or through an independent
arrangement, e.g. revenue cycle management in water or wastemanagement.
Physical
Infrastructure
Ancillary services
P bli P i t P t hi (PPP)
-
7/31/2019 Kogi State - PPP Training
30/40
Public Private Partnership (PPP)Success Factors
-
7/31/2019 Kogi State - PPP Training
31/40
Outline
9/10/2012 Michael Andersen 31
Who Are We?
What We Can Do
Why Michael Andersen?
Team Structure
Business Arrangements
Key Contacts
Wh Michael Andersen?
-
7/31/2019 Kogi State - PPP Training
32/40
Why Michael Andersen?Our Value Proposition
9/10/2012 Michael Andersen 32
Helps
increasecomplianc
e to
relevant
statutory
requireme
nts
Identifying key business issues,risks and mitigating factors up-
front
Being properly prepared
Capitalising on our significant audit
experienceHaving access to additional
resources
Prompt
identificationand
communication
of key
business
issues and
risks
Helps
minimisedisruption to
the
Commission
s operations
Helps
increasethe speed
of
execution
Helps
maintaincontrol of
the
process
our previous collaborative experience results in value maximization
Why Michael Andersen?
-
7/31/2019 Kogi State - PPP Training
33/40
Why Michael Andersen?
9/10/2012 Michael Andersen 33
Experienced Team
Market Leading
Adviser
Value Focused
Scope &
Efficient Approach
Our multi-disciplinary team has very deep public and private sectors experienceacross business re-engineering, strategy, audit, accounting and human resources.
Relevant
Experience
Members of Michael Andersen team have recent experience of advising in
many states of the federation in a wide variety of geographies with diverse
market, socio-economic and regulatory regimes.
Members of our team have advised on similar requests in the past, both in Nigeria and
abroad, and are currently in talks with several Corporations and Government Agencies.
Within Michael Andersen we have a range of market, financial and regulatory reporting
specialist with relevant experience.
We have adequate local resources, sector specialists within the Michael Andersen
network to deploy. We have tested competence to ensure efficient delivery on this
transaction.
-
7/31/2019 Kogi State - PPP Training
34/40
Outline
9/10/2012 Michael Andersen 34
Who Are We?
What We Can Do
Why Michael Andersen?
Team Structure
Business Arrangements
Key Contacts
-
7/31/2019 Kogi State - PPP Training
35/40
Our Team Structure
9/10/2012 Michael Andersen 35
Our Approach to Client Service
The experience to anticipate risks
The confidence to provide honest advice
Thinking outside the box to develop alternatives
Vision
Experienced and committed teams
Focused on putting the client first
A depth of additional expert resource available
Flexibility
Building long-term relationships with clients
Frequent informal interaction
Regular formal progress reports
Communication
Focused on timely completion of tasks
Proactive in driving processes forward
A reputation for never compromising quality
Delivery
Michael Olujitan
Engagement Partner
Our Team
Our team draws together specialists from our
Abuja office to provide you with the full range of
skills and experience to help ensure the success
and the timely completion of this assignment.
...Our team is constituted based on
experience and qualifications
Engagement Director
Associates
Our Service Team
-
7/31/2019 Kogi State - PPP Training
36/40
Our Service TeamMr Michael Olujitan
9/10/2012 Michael Andersen 36
Name Michael Olujitan
PositionChief Executive Officer, Michael Andersen Advisory Services
Education andQualifications
B.Sc. Petroleum Engineering, University of Ibadan, Ibadan, Nigeria Fellow, Association of Chartered Certified Accountants, UK Associate, Institute of Chartered Accountants of Nigeria
Area ofexpertise
Financial Services; Telecommunications, Public Sector and Energy (Oil, Gas &
Years ofexperience
and trackrecord
23 years
Michael specialises in value for money reviews, capital projects, Audit Tests of
Financial Systems using Rex and IDEA 5.0 Audit software, preparation of Audit
Reports including recommendations for improving existing systems,
Accounting and Taxation , Banking, Corporate Finance , Project Appraisals andFunding.
He is experienced in International Project Finance, review of viability of
mergers and takeovers, involving the review of Balance sheets and Accounts
of merging organisations and making recommendations for improvements.
Michael is the CEO of Michael Andersen Advisory services & Head of our
Accounting Advisory Services.
He has overall responsibility for our Accounting Support Services and
function. In this role he has been involved in rovidin accountin services
-
7/31/2019 Kogi State - PPP Training
37/40
Outline
9/10/2012 Michael Andersen 37
Who Are We?
What We Can Do
Why Michael Andersen?
Team Structure
Business Arrangements
Key Contacts
-
7/31/2019 Kogi State - PPP Training
38/40
Business Arrangements
Our fees are competitive, negotiable and are based on
the time spent on your assignment. However, in view of
our intention to build a relationship with the Kogi State,
we are willing to offer a discount, which is negotiable.
Kogi State will be responsible for the transportation and
accommodation of the participants.
The fees are exclusive of VAT9/10/2012 Michael Andersen 38
Number of Participants
Number of Training
Days
Cost per Participant
() Total Cost ()
10 5 5000 50000
Training Location: London, UK
-
7/31/2019 Kogi State - PPP Training
39/40
Outline
9/10/2012 Michael Andersen 39
Who Are We?
What We Can Do
Why Michael Andersen?
Team Structure
Business Arrangements
Key Contacts
Key Contact
-
7/31/2019 Kogi State - PPP Training
40/40
40
We welcome enquiries and will be happy to discuss your specific needs with you. Please feel free to contact any of
the individuals listed below:
i h l d
y
Michael Olujitan
CEO, Michael Andersen
Andersen Consulting Company
Company Ltd
+44 7818366186, + 234 7033420653 or
7033420653 or +234 8056667569
8056667569
Muyiwa Olufemi Johnson
Johnson Head, Client Services
Client Services Department
Department
+234 (0) 7030066660 [email protected]
Tope Ogbonyomi
Head, Business Development
Development
+234 (0) 8098930402 [email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]