kogi state - ppp training

7/31/2019 Kogi State - PPP Training

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Michael Andersen

Public Private Partnership Proposal

October 2012

TRAINING - LONDON

Kogi State Government


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Michael Andersen

Public Private Partnership Proposal

October 2012

TRAINING - LONDON

Kogi State Government


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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.


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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


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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


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Outline


Who Are We?

What We Can Do

Why Michael Andersen?

Team Structure

Business Arrangements

Key Contacts


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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



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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.



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Outline


Who Are We?

What We Can Do


Team Structure


Key Contacts


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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.



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What We Can DoOur Proposed Services

Some of the topics, in addition to others, that will be discussed in theTraining include:


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


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Public Private Partnership (PPP)


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


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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


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Public Private Partnership (PPP)PPP vs. Traditional Procurement


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


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Public Private Partnership (PPP)PPP vs. Traditional Procurement


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


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Public Private Partnership (PPP)PPP vs. Privatisation/Divestiture


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


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Public Private Partnership (PPP)Range of PPP Options


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


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Public Private Partnership (PPP)Range of PPP Options (2)


Fully

Private

Operation &Maintenancecontract

DesignBuild

DesignBuildOperate

LeaseDevelopOperate

Buy BuildOperate

BuildTransferOperate

BuildOperateTransfer

Build OwnOperate

Roles, Skill Requirements, and Risks of Private Sector

Low High


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Public Private Partnership (PPP)Typical Deal Structure


Special purpose vehicle

Public sector partnerLenders Advisers

AdvisersPrivate sector partner

Design and constructionOperation and maintenance

Direct agreement

Equity agreement

Service contract

Sub-contracts

Loans


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Public Private Partnership (PPP)Parameters and Rationale


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


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Public Private Partnership (PPP)Parameters and Rationale (2)


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


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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


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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


( )


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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.


P bli P i t P t hi (PPP)


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Public Private Partnership (PPP)Benefits


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



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Public Private Partnership (PPP)Key Structures


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



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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



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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



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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



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Public Private Partnership (PPP)Success Factors


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Outline


Who Are We?

What We Can Do


Team Structure


Key Contacts

Wh Michael Andersen?


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Why Michael Andersen?Our Value Proposition


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



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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.


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Outline


Who Are We?

What We Can Do


Team Structure


Key Contacts


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Our Team Structure


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


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Our Service TeamMr Michael Olujitan


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


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Outline


Who Are We?

What We Can Do


Team Structure


Key Contacts


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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


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Outline


Who Are We?

What We Can Do


Team Structure


Key Contacts

Key Contact


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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

[email protected]

[email protected]

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]

kogi state - ppp training

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