module specification

This module draws upon on international best practice in both developing successful PPP programmes and delivering new public facilities and services. It addresses theory, policy, strategy and delivery. PPP professionals need to understand the key internal and external contexts that impact on PPP strategy. These include the rationale for PPP, the forms that it takes and the role of governments in its delivery. This module allows learners to explore theory and models to enable them to develop knowledge and a critical understanding of a number of contemporary issues affecting PPP in practice. The module will encourage learners to adopt critical perspectives on policy, project definition, legal and tax issues, risk, risk management and insurance, project funding and funding sources.

• To introduce the key factors that shape PPP strategies, examining PPP as both a policy and a procurement methodology.
• To critically evaluate the theory and models which underpin the nature of PPP.
• To enable students to apply their understanding of context, strategy and practice to produce focused solutions to PPP issues.

Policy
• Introduction to PPP - an introduction to PPP as both a policy and a procurement methodology; defining and distinguishing different types of PPP.

• Converting public sector capital expenditure into affordable operational cash flows.

• Philosophy of transforming government departments from being owners and operators of assets into knowledgeable purchasers of services from the private sector.

• The rationale for PPP - a more detailed examination of the case for introducing methods; the difficulties and criticisms. An explanation of the core principles of risk transfer, output-based specifications, value-based contracting and the importance and benefits of a transparent competitive process.

• The role of government: engaging with the public and private sectors, communications strategies, the PPP unit, tax and legal barriers, working at different levels of government (central, regional, municipal), training programmes. Identifying target sectors.

Risk, risk mitigation and insurance
• The risk matrix: Consideration of the major categories of risk inherent in most projects, how these are recorded, allocated and shared between the parties.

• Risk transfer, due diligence, leverage, inflation, political risk, insurance.

Legal
• Legal framework: Concession/PPP law, Common Law vs Civil Law environment, Public procurement law, vires etc.

• Contractual: The road map of PPP contractual relationships. The web of contracts that link the Public Sector client via a special purpose company (SPV) to the sub-contractors, insurers, equity and debt funders.

• The standard contractual terms and schedules. Key contractual terms, including default provisions and the consequences and liabilities arising at termination. The contents of the major schedules to a conventional contract including the payment mechanism and the contract management arrangements.

• Anti-corruption legislation, probity auditing and the Equator Principles (the framework whereby banks can manage environmental and social issues in project financing).

Tax issues

• VAT treatment, necessity for tax reform.

Project Funding

• Accounting for PPP projects on and off balance sheet issues. Eurostat guidelines (if appropriate).
• Perspective of the finance providers - issues of particular concern to funders, including public authority powers to contract, future budget commitments, land and property rights, planning, threats to the revenue stream, demand risk expectations, indexation, discount and cost of funds, the consequences of - and compensation payable on - early termination.
• The financial model - the impact of different debt terms/tails, cover ratios, the effect of sculpting and pricing at different points in the contract life, and the opportunities for refinancing. Alternatives such as Bond finance.
• Step-in rights and security package - The various forms of funder protection from initial due diligence, to the Direct (step-in) Agreement, collateral warranties, and guarantees and insurances.
• Finance structures - SPV debt and equity structures, the roles of senior and subordinated debt, fees and pricing considerations, credit guarantee and rate fixing, bonds etc.
• The role of banks, infrastructure funds, pension funds, etc.

Sources of Funding

• Equity, senior debt, syndication, bank guarantees, bond/capital markets financing, mezzanine debt, DBFO equity versus private equity. Also, financial dynamics, debt ratios, cash flow, short term financing and refinancing “cap and cover”.

This module is based on international best practice in both developing successful Public-Private Partnerships (PPP) programmes and delivering new public facilities and services to include theory, policy, strategy and delivery. The learning and teaching strategy will encompass a combination of lectures, seminars, workshops and online work. This will include tutor led lectures, student led class discussions and seminar sessions, case studies, individual and group exercises. Students will be asked to take part in problem solving activities where theory and models will need to be applied to specific context. They will also be encouraged to draw upon on their own experience of organisations and employment to support the development of relevant knowledge, skills and understanding. Sessions will be supported by web based resources on Weblearn and directed learning activities. Students will be issued with a module handbook, and guidance on readings, most of which will be available through the Learning Centre, others through Weblearn.  Students will be encouraged to think holistically both in class and via the assessment strategy, so that an integrated understanding of the syllabus components can be fully appreciated.

On completion of this unit, learners will be able:

• To define PPP, distinguish different PPP types, articulate its rationale and explain the role of government and of the private sector.
• To explain the core principles of risk transfer, output-based specifications, value-based contracting and the importance and benefits of a transparent competitive process.
• To analyse and explain the business case, define project scope, requirements and benchmarks, demonstrating understanding of the service model.
• To explain the risks inherent in most projects, how these are recorded, managed, allocated and shared between the parties.
• To report on the legal and tax frameworks underpinning PPP.
• To explain techniques for testing PPP transactions as affordable and economically advantageous.
• To demonstrate awareness of the perspectives of finance providers, report on finance structures and sources of funding.
• To understand the different characteristics of PPP and those of traditional public procurement.

The assessment for this module will consist of one formal submission but there will also be regular opportunities for informal assessment via tutor feedback. The assessment will focus on students preparing a consultancy report (5,000 words) on the opportunities and risks involved in conducting a PPP project. This will allow the student to address all the learning outcomes to a suitable depth.

Essential texts
DAVIE J.D.M. (2015). The PPP Book: Public-Private Partnerships Unbundled. London, Inspire Publishing.
GEDDES, M. (2005). Making public private partnerships work: building relationships and understanding cultures. Aldershot, Hants, Gower.

Other texts and e-resources
AKINTOYE, A., BECK, M. & RICS RESEARCH (2009). Policy, finance and management for public-private partnership. Oxford, Wiley-Blackwell.
BEXELL, M., & MÖRTH, U. (2010). Democracy and public-private partnerships in global governance. New York, Palgrave Macmillan.
COMMISSION ON PUBLIC-PRIVATE SECTOR PARTNERSHIPS (2001). Building better partnerships: the final report of the Commission on Public Private Partnerships. London, Institute for Public Policy Research.
CORRY, D., LE GRAND, J. & RADCLIFFE, R. (1997). Public/private partnerships: a marriage of convenience or a permanent commitment? London, Institute for Public Policy Research.
DUBBEN, N. & WILLIAMS, B. (2009). Partnerships in urban property development. Chichester, Wiley-Blackwell.
GHOBADIAN, A. (2004). Public-private partnerships: policy and experience. Basingstoke, Hampshire, Palgrave Macmillan.
GLAISTER, S., SCANION, R. & TRAVERS, T. (2000).  Getting partnership going: PPPs in transport. London, Institute for Public Policy Research.
HODGE, G.A., & GREVE, C. (2005). The challenge of public-private partnerships: learning from international experience. Cheltenham, UK, Edward Elgar.
JOSEPH, E. & KELLY, G. (2000). Finding the right partner: diversity in local public private partnerships. London, Institute for Public Policy Research.
INTERNATIONAL FINANCIAL SERVICES LONDON (2001). Public-private partnerships: UK expertise for international markets. London, International Financial Services London.
KELLY, G. (2000). The new partnership agenda. London, Institute for Public Policy Research.
KELLY, G. & ROBINSON, P. (2000). A healthy partnership: the future of public private partnerships in the health sector. London, IPPR.
LINK, A. N. (2006). Public/private partnerships: innovation strategies and policy alternatives. New York, Springer.
LISSAUER, R. & ROBINSON, P. (2000). A learning process: public private partnerships in education. London, Institute for Public Policy Research.
MORRISON, R. (2012). The principles of project finance. Burlington, Vermont, Gower.
OSBORNE, S.P. (2000). Public-private partnerships in international perspective. London, Routledge.
ROBINSON, H. (2010). Governance & knowledge management for public-private partnerships. Chichester, Wiley-Blackwell.
SAVAS, E.S. (2000). Privatization and public-private partnerships. New York, Chatham House.
SILLETT, J. (2001). Public private partnerships: opening the public private debate. London, Local Government Information Unit.
VAILLANCOURT ROSENAU, P. (2000). Public-private policy partnerships. Cambridge, Mass, MIT Press.

Recommended Journals
Accounting, Auditing & Accountability Journal
Business & Society
Facilities
Innovation Journal
International Journal of Project Management
International Journal of Public Sector Management
Journal of Business Ethics
Journal of Economic Policy Reform
Journal of Economics and Business
Journal of Financial Management of Property and Construction
Journal of Public Procurement
Political Science Quarterly
The American Journal of International Law
The American Political Science Review
The Economic Journal
The Journal of Politics
The Quarterly Journal of Economics
Society and Business Review

Web Resources
https://www.cips.org/Documents/Knowledge/Procurement-Topics-and-Skills/5-Strategy-and-Policy/Procurement-Policy-Development/POP-Private_Finance_Initiatives.pdf
http://www.cips.org/documents/Beyond%20Project%20Management.pdf
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/187569/engage_with_private_sector.pdf
https://www.gov.uk/government/consultations/a-new-approach-to-public-private-partnerships-consultation-on-the-terms-of-public-sector-equity-participation-in-pf2-projects
https://www.gov.uk/government/publications/procurement-and-contract-management
https://www.gov.uk/government/publications?keywords=PPP&publication_filter_option=all&topics%5B%5D=all&departments%5B%5D=all&official_document_status=all&world_locations%5B%5D=all&from_date=&to_date=
TUC Library
You will also find a number of useful publications on PPP in the TUC collections. Copies are not loanable but are available to view by students at the TUC Collections on Holloway Road. You are advised to check to see if an appointment is necessary to view particular items.