Strategy #1: Partnering with the Private Sector through PPP. EY Infrastructure Advisory. October 2017

Similar documents
Government of Newfoundland and Labrador. Central Region Long Term Care Project Value for Money Assessment

Financial Reporting Developments. Singapore Healthcare Management Congress 2012

Draft PPP Policy Outline

FRS 115 Revenue Recognition

Government of Newfoundland and Labrador. New Adult Mental Health Facility Project Value for Money Assessment

PPP Arrangement in WtE Plants

Singapore commodity trading quarterly Q4 I 2016

Pre-Budget Brief Singapore

Initial steps on the IPO journey. April 2016

Pre-Budget Brief Singapore

MINISTRY OF FINANCE AND ECONOMIC AFFAIRS

Barbados conducting review on OECD-designated preferential regimes

Selecting the Right Projects / Sectors for PPP Implementation

February 2018 Tax & Advisory Services Tax Update

Finding the capital you need to help your private business grow

EYGS UK tax strategy. Financial year ending 30 June 2017

Port Development and Growth Trends. In the ASEAN region. 13 th ASEAN Ports and Shipping, Indonesia June 2015 maritime & transport business solutions

IFRS 12. Disclosure of Interests in Other Entities

Project Development Under PPPs

MINISTRY OF PLANNING AND INVESMENT PUBLIC PROCUREMENT AGENCY OVERVIEW OF PPP IN VIET NAM

Developing a PPP market: Getting the fundamentals right

Headline Verdana Bold. Uganda PPP Act - Implications for Public Sector Accounting Kenneth LEGESI Deloitte (Uganda) Limited

Financing Infrastructure in Asia and the Pacific

Pre-Budget Brief Singapore

Record to report. Are you audit ready?

Flash update: Decree 119/2018/ND-CP on E-invoice

Role of Private Equity in Urban

Intro Public-Private Partnership (P3) Finance Course

Singapore commodity trading quarterly Q1 I 2017

Tax Alert July 2018 The Draft Decree on Electronic Invoice

Study on Private-Initiative Infrastructure Projects. in Developing Countries in FY2009. Project in Socialist Republic of Viet Nam SUMMARY.

World Bank Group Risk Mitigation Solutions for Myanmar s Infrastructure Projects. Workshop Program

PPP IN THE FIELD OF ICT IN VIET NAM A PRACTICAL VIEW. The 5 th ASEAN Connectivity Forum Seoul, November 2017

Prepare for success. 5Insights for executives. Operational transfer pricing: Failure to implement can hinder performance

Understanding ASPE. Section 1506, Accounting Changes

Global Insurance CFO Survey Asia supplement

Improving public investment efficiency for infrastructure development

Are you ready to go public?

Tax Alert. Vietnam Customs and Global Trade Alert. A fresh perspective. November Deloitte Vietnam Tax Advisory Company Ltd

IPP TRANSACTION ADVISOR TERMS OF REFERENCE

IFRS adopted by the European Union. Based on International Financial Reporting Standards in issue at 22 December 2015

FACILITATING ACCESS TO FINANCE FOR INFRASTRUCTURE PROJECTS: ESTABLISHING DEDICATED INSTITUTIONS

Tax Alert. Circular No. 25/2018/TT-BTC dated 16/3/2018 guiding a number of new regulations regarding VAT, CIT and PIT. March 2018

March 2018 Tax & Advisory Services Tax Update

Overview of the transfer pricing landscape in Singapore

Understanding ASPE. Section 3840, Related Party Transactions

SECTOR ASSESSMENT (SUMMARY): ROAD TRANSPORT

Boosting Infrastructure Financing through Risk Mitigation Instruments

Managing Potential Fiscal Liabilities of PPP Projects

Why Legal Entity Management matters Webcast 2014

The new revenue recognition standard - life sciences

ORSA reports: gaps and opportunities

Public Private Partnerships (PPPs) Projects

Recent experience of establishing a PPP framework to mitigate fiscal risks in Bangladesh

Overview of the framework

Delivering Public Private Partnerships in PNG

Equitable Financial Evaluation Method for Public-Private Partnership Projects *

Scaling up investment in Infrastructure: The Indian experience

Renewable Energy Industry in Argentina

Global mining and metals tax survey. From backroom to boardroom. The CFO perspective at a glance

Accounting update. A new approach to grantor accounting for public private partnerships

2018 Homebuilder Tax Director Roundtable. Wynn Las Vegas 7-8 May 2018

People s Republic of China TA 8940: Municipality-Level Public Private Partnership (PPP) Operational Framework for Chongqing

Undertaking Successful PPPs in Kazakhstan

Bracknell Forest Council

Getting up to speed with IFRS 17 for insurance contracts. Implications for Malaysian insurers. Volume 5 - Issue 3-19 June 2017

Tax Alert Canada. Manitoba budget Business tax measures. Corporate tax rates

August 2018 Tax & Advisory Services Tax Update

India releases Annual Report covering transfer pricing and international tax developments

Key issues considered in the dialogue: - what financing measures will best ensure bankable projects. Specifically, the dialogue focused on:

TTC/EY Tax Reform Business Barometer

1. Published International Financial Reporting Standards

Managing operational tax risk through technology

Enterprise risk management in Japan

Public Private Partnerships in NZ. What Does the Future Hold?

The Benefits of P3s. Why do P3s work?

Global Regulation Solvency II & Equivalence. September 16, 2013

Overview of the framework

ORISSA PUBLIC PRIVATE PARTNERSHIP POLICY-2007

Public Private Partnerships. Gautrain Rapid Rail Link. in St Petersburg. World Bank Institute. CEO: Gautrain Management Agency

Enabling the prospects. EY s 2014 attractiveness survey India

Decree No.15/2015/ND-CP dated 14/02/2015 on Public Private Partnership Investment (PPP) (Effective from 10/4/2015)

Keynote Address: Legal Issues for PPP Transactions

Sumant Chak MAKING PPP ATTRACTIVE FOR PRIVATE FINANCE IN INFRASTRUCTURE THE INDIA STORY. Asian Institute of Transport Development

Implementation of VAT across the GCC

Doing business in Chad

Global Tax Alert. OECD issues updated guidance under BEPS Action 8 on transfer pricing aspects of intangibles. Executive summary

Ninth Annual International Tax Reporting Conference. Boston 7 May 2014

Mandatory transfer pricing documentation and penalty regime to be introduced in Singapore

Meeting the challenges of the changing actuarial role. Actuarial Transformation in property-casualty insurers

State income tax exposure for fund managers

Global Tax Alert. Italy launches pilot project for tax Co-operative Compliance Program, applications required by 31 July 2013.

Income Tax (Amendment) Bill 2017

Four key capabilities for the future of underwriting. Findings from the EY-CPCU Society underwriting survey

Investing in Asian Education: Opportunities and Challenges

Hong Kong releases new practice note on concessionary tax regime for qualifying aircraft leasing activities

Transaction Advisory Services. Managing capital and transactions for your private business

International Financial Reporting Standards (IFRS) update seminar

CARE ADVISORY RESEARCH AND TRAINING LTD. Project Finance: Infrastructure and Manufacturing Sectors

IP income definition is out, what should you do?

Transcription:

Strategy #1: Partnering with the Private Sector through PPP EY Infrastructure Advisory October 2017

EY Infrastructure Advisory Page 2

EY s Infrastructure Advisory and Project Finance Advisory Capabilities EY s Infrastructure Advisory Group is recognised as a global leader advising Governments in the infrastructure sector. Our ASEAN team is based in Singapore. Globally we number more than 1,000 people worldwide and have advised on nearly 800 transactions, with industry teams in key sectors eg Transport Power & Utilities Health Education Regeneration/Property Water / Waste Our range of services include: Value for Money Guidance Feasibility Study, Project Delivery Strategy and Business Case Development PPP Capacity Building Financing Options and Financial Management Economic Analysis & Financial Modelling Commercial and Financial Advisory Project Development and Tender Support Development of Business Case to Project Tendering Recent AsiaPac Projects: Malaysia Singapore High Speed Rail PPP, Philippines (NAIA) Airport PPP, BRT Iskandar Malaysia, Sydney Metro PPP, HK West Kowloon Development PPP Page 3

EY Vietnam EY Vietnam (EYV) was the first international accounting, auditing and consulting firm to establish a legally recognised 100% foreign owned company in Vietnam with over 900 professionals across offices in Hanoi and Ho Chi Minh City. EYV has the experience and expertise to local and international client and has accompanied the Government of Vietnam since 2001 in the reform and transformation of the SOEs in Vietnam Additionally, EY is also advising the Ministry of Transport in developing the transport sector PPP framework for the country, which includes development of standard bidding documents and PPP manual. Page 4

Partnering Private Sector through PPPs Page 5

Private Sector Participation brings Governments are increasingly aware of the benefits which private sector can bring to assist to To facilitate immediate investments in infrastructure To improve the quality of services (key infrastructure for external trade). To ensure efficient, cost-based provision of critical infrastructure and related services, improved budget certainty To transfer commercial 1. risks related to operation and investment, where appropriate

Different Models for Private Sector Participation Page 7

Typical Characteristics of a PPP Contract Long term contract between public and private sector for private sector to deliver specified services, including infrastructure development and management Typically requires upfront capital investment by private sector Contractor plays an important role in the design, completion, operation and funding and take responsibility for assets performance Distribution of risks between the public and private sector. Payments are typically output based for available service or infrastructure and can involve both user charges (demand risk) and government payments Public sector able to spread payments for large projects over useful life - improved budget certainty Appropriate allocation of risk and responsibilities- - better service and cost outcomes

Attracting Private Investment Page 9

A well structured project attracts investors and financiers Factors that influence the financial viability of a Project Risk Allocation Access to Financing Key areas of focus for financiers and investors Legal, regulatory frameworks Viable Projects / Transaction Structure Transparent Bidding, Evaluation and Decision Making Cost Allocation and Assessment Value for Money and Optimism Bias - realistic assessment Appropriate budget, contingency and risk plans Capacity of Procuring Authorities

Partnering with private sector through PPPs Investment Laws to facilitate private sector investment PPP Enabling Legal and Institutional Framework (Decree 15) Centralised PPP Unit to enable government support, decision and approval process - project level and ministry level - supporting different procuring agencies (ASAs) Capacity Building of government procurement teams (ASAs) Template Model Contracts to standardise risk allocation and contract terms - by sector and by procurement modality Establishment of a Project Development Fund Vietnam has made substantial progress to facilitate PPP investments

Partnering with private sector through PPPs Realistic Project Selection and Pipeline and risk allocation - sufficient time and resources for project preparation Transparent bidding, evaluation process and selection criteria / process Appropriate transaction structures Development of long term financial markets / long term financing mechanisms Capacity Building of ASA to procure and manage PPP Contracts Political Will / Support (eg Streamlined Decision Making / Appropriate Contingent / Budget Management and Support / VGF Management) Continued development is required to enable long term Private Sector Investment

Appropriate Project Selection and Contract Structure to achieve the objectives Availability / Service Payment Contracts Projects are developed based on specified output and service levels and private sector is paid an agreed fixed payment / tariff. Government bears demand risk and reward. Concessions Private sector receives the concession to develop and operates the project. Bears market (demand) risk and revenues are typically derived directly from the users of the infrastructure rather than government. Viability Gap Funding (Concession) The difference between the forecast revenues and the whole of life expenses including debt and equity costs Can be stated in the RFP as a bid parameter How best to apply PUBLI C

Appropriate Project Selection and Contract Structure to achieve the objectives Build Then Tender (Finance) / Sell The project is built by the procuring agency under a conventional design and construct project then financed once the constructions phase (risks) is complete and an operational track record established Separating the Project Components Projects are split into their constituent elements and separately funded When consider: Large and complex projects Integration and other risks remain and to date has been used for projects where such risks are known PUBLIC

Attracting Private Sector Investment.. Realistic Project Pipeline and Selection Formation of Core and Stakeholder (inter-ministry) Project Team (plus external advisors) Assess technical and financial feasibility of the Project to be developed as a PPP, including PSC, key pricing / return indicators Determine an appropriate contract arrangements eg BOT, BT, BTO and risk allocation and financing options including proposed payment mechanism Transparent evaluation criteria, streamlined decision making and timing of project tender Internal Stakeholder Support Political Will and Stability, Government Support Early engagement with industry (foreign and local investors / firms / lenders) There is significant private sector liquidity and interest to invest and manage infrastructure services. Successful long term partnerships require a sustainable investment environment and equitable allocation of risk and reward

Thank You Lynn Tho Partner, EY Asean Infrastructure / Project Finance Advisory Leader

EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. 2013 Ernst & Young Solutions LLP. All Rights Reserved. Ernst & Young Solutions LLP (UEN T08LL0784H) is a limited liability partnership registered in Singapore under the Limited Liability Partnerships Act (Chapter 163A). This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. www.ey.com